Product Sourcing Services: What's Included and What They Cost
Quick answer: A product sourcing service finds the factory for the product you want to sell, negotiates price and minimum order, manages samples, follows production and checks goods before they ship. Services charge in one of four ways: a percentage of product cost, a flat fee per product, a retainer, or a margin hidden inside the unit price. A published percentage is the easiest to check. At PackQuay it is 10% of product cost for purchases up to $5,000, falling step by step to 4% above $200,000, with 2.5% added for private label.
What a sourcing service should cover
"Sourcing" gets used for anything from sending you three supplier links to running a whole product launch. Before comparing prices, compare scope. Here is the work a full service does, and the question that tells you whether a quote really covers it:
| Stage | What the service does | Ask |
|---|---|---|
| Supplier search | Finds factories and wholesalers, not just marketplace listings | Is this quote from the maker or a reseller? |
| Quotes and negotiation | Gets comparable quotes and negotiates price, minimum order and lead time | What did you negotiate, and what moved? |
| Samples | Orders, checks and photographs samples before they reach you | Who pays for samples and sample freight? |
| Production follow-up | Tracks the order and chases delays | How will I hear about a delay? |
| Quality check | Inspects goods before they ship to you or your customers | What share is checked, and what does a full check cost? |
| Branding | Logos, custom packaging, inserts, product changes | Is this in the base fee or extra? |
| Shipping | Books freight or ships each order | Is shipping at cost or marked up? |
For a closer look at how the search, negotiation and sampling work day to day, see our guide to sourcing agents for dropshipping.
Four ways sourcing services charge
1. A percentage of product cost
The most common model for agents who keep working on your account. It scales with the size of each order and usually falls as orders grow. It's easy to audit if you can see the product cost the percentage is applied to.
2. A flat fee per product or per request
Predictable for one-off searches. The catch: the fee pays for finding a supplier, not for the restocks, quality checks and supplier changes that follow, so ask how repeat orders are billed.
3. A retainer or hourly rate
Suits brands with constant development work, such as new products every month. It's expensive in quiet months when nothing is being sourced.
4. A margin built into the unit price
Often marketed as "free sourcing". There's no visible fee, but you can't see what the factory charges, and the margin can drift up over time without anyone telling you. If the price looks low on day one, check it again on the third restock.
No model is wrong in itself. What matters is that you can see the product cost, the service fee and shipping as separate numbers.
PackQuay's sourcing fee, worked through
We charge a percentage of the total product cost in each purchase. The size of the purchase sets the tier, and that rate applies to the whole amount. Private label and branding add 2.5%.
| Tier | Product cost per purchase | Sourcing fee |
|---|---|---|
| 1 | Up to $5,000 | 10% |
| 2 | $5,001 – $10,000 | 9% |
| 3 | $10,001 – $20,000 | 8% |
| 4 | $20,001 – $50,000 | 7% |
| 5 | $50,001 – $100,000 | 6% |
| 6 | $100,001 – $200,000 | 5% |
| 7 | Over $200,000 | 4% |
Here's what that looks like on real-world order sizes:
| Purchase | Product cost | Rate | Sourcing fee |
|---|---|---|---|
| First test batch | $1,500 | 10% | $150 |
| Restock of a proven product | $8,000 | 9% | $720 |
| The same restock with your logo and box | $8,000 | 9% + 2.5% | $920 |
| Seasonal bulk order | $25,000 | 7% | $1,750 |
| Large production run | $120,000 | 5% | $6,000 |
A tip that follows from the tiers: because the rate is set per purchase, combining orders can drop you a tier. Two separate $4,500 restocks cost $450 each in fees, $900 in total. Bought together as one $9,000 purchase, they fall into tier 2 at 9%, which is $810. If you have the cash flow and the storage, plan restocks together.
What the sourcing fee doesn't include
A fair comparison needs the whole bill, so here is everything else, all published on our pricing page:
- Shipping: charged at cost, on 30+ lines.
- Pick and pack: per order, $2.00 for your first 19 paid orders of the day, stepping down to $1.00 from the 149th.
- Inspection: 20% of each batch free; extra inspection at $7 per hour per person.
- Labelling, kitting and assembly: $7 per hour per person.
- Packaging: mailers, padded mailers and custom boxes, quoted per design and volume.
- Photos, video and new product development: quoted per project.
- Storage: free for the first 2 months and while you have orders to process; long-term storage priced per CBM.
- Payment fees: PayPal, wire/ACH and card processor fees passed through at cost.
There's no subscription and no monthly fee. If you don't buy anything in a month, you don't pay anything for sourcing.
How to compare two sourcing quotes fairly
- Same quantity. A quote for 1,000 units isn't comparable with one for 200.
- Same product spec. Material, size, finish and accessories written down, not "same as the link".
- Same packaging. A plain polybag and a printed retail box can differ more than the product does.
- Same delivery point. Delivered to a warehouse in China, or delivered to your customer with duties paid?
- Fee shown separately. If one quote has no visible fee, assume it's inside the unit price.
- Same quality step. Does either quote include inspection, and how much of the batch?
Once both quotes are on the same basis, the cheaper one is usually obvious. If they are close, pick the service that explains its numbers best; you'll be working with them on every restock.
When paying for sourcing is worth it
It usually pays off when you don't read Chinese, buy from several suppliers, need goods checked and combined before they ship, or are launching your first branded product, where a bad batch costs more than the fee. It's harder to justify when you already have a long-standing factory, your own inspector and your own freight forwarder for a single high-volume SKU. Even then, the fee falls to 5% or 4% at that size. If you're exploring products to brand, our guide on finding white label products is a good next step.
How sourcing works with PackQuay
Send a product link (1688, Alibaba, AliExpress, Amazon) or a photo on WhatsApp. Our buyers in China find the maker, negotiate, check samples and buy, and the goods arrive at our own warehouse in Xinxiang, Henan, for inspection, storage and shipping. For dropshipping there's no fixed minimum order; we buy to match your orders. Message us on WhatsApp for a quote, and see product sourcing for the full service.
FAQ
How much do product sourcing services cost?
It depends on the model. A common one is a percentage of product cost; at PackQuay that is 10% for purchases up to $5,000, falling to 4% above $200,000, plus 2.5% for private label. Others charge flat fees, retainers or a margin inside the unit price.
What does a product sourcing service do?
It finds suitable factories, gets and negotiates quotes, manages samples, follows production and checks goods before they ship. Many services also handle branding, storage and shipping.
Is a "free" sourcing service really free?
Usually not. When there is no visible fee, the service is normally paid through a margin added to the unit price, which you can't see or compare.
Is there a minimum order for sourcing?
At PackQuay there is no fixed minimum for dropshipping; we buy to match your orders. For private label and custom products the factory's minimum applies, and we negotiate it for you.
How long does sourcing take?
For dropshipping orders, our average is 4–5 days after payment. Bulk and custom products depend on the factory's production time.