Four ways brands cover their China production — compared on scope, incentives, fixed cost and exit cost, by someone who has run and carved out a China office.
Own office if China volume is large, stable and strategic enough to justify a permanent team. Outsourced department if you need the office's full scope without its fixed overhead or exit cost. Sourcing agent if your main problem is finding new suppliers. QC firm if your only gap is shipment inspection.
| Own China office | Outsourced manufacturing department | Sourcing agent | QC / inspection firm | |
|---|---|---|---|---|
| Who it works for | You (employees) | You, on a monthly contract | Often paid by commission on orders | You, per inspection |
| Fixed overhead | Staff, lease, entity, equipment | Monthly retainer; scales with your volume | Low, built into price or commission | None between jobs |
| Supplier management and scoring | Yes, if staffed | Yes, continuous, quarterly scorecard | Usually focused on finding suppliers | No |
| Pre-shipment quality gate | Yes, if staffed | Yes, release-or-hold call before the container closes | Varies | Yes — its core job |
| Cost and price-increase defence | Yes, if staffed | Yes, negotiated in Chinese | Conflict if paid on order value | No |
| Tooling asset register | Yes, if someone owns it | Yes, verified on site | Rarely | No |
| NPI, DFM and tooling development | Needs engineers on staff | Project fee, only when you develop | Limited | No |
| Exit cost | Severance, lease, wind-down | Contract notice | Low | None |
Full control and people who know your products. The cost is fixed — staff, lease, entity, equipment — whether volume rises or falls, and the hardest cost is the exit: severance, the remaining lease, and supplier knowledge that was never written down and leaves with the people. Why most underused offices stay open →
The office's recurring work — supplier scoring, quality release, complaint traceability, price-increase defence, audits, tooling register, monthly report — run on a monthly retainer, with new-product work billed per project. The trade-off: you rely on a contract partner, so conflict of interest and continuity must be answered in writing. How the department model works →
Useful for finding and introducing suppliers quickly. Where the agent is paid a percentage of order value, its incentive on price increases and supplier switches is not the same as yours. Check what happens after the first order.
Good at one job: checking a shipment against a standard before it leaves. It does not manage suppliers, cost, tooling or development — so it complements the other three rather than replacing an office.
I have sat on both sides of this decision. In 2005 Termozeta, an Italian appliance brand, needed people on the ground in China. I was the first person they hired, and built the office to forty to fifty people across engineering, quality, purchasing and logistics. Twelve years later the brand closed the representative office; I wound it down and, with their own chief engineer as partner, set up the company that took the same work over. The full carve-out story →