Today, Adrian and Renaud dig into a topic that makes a lot of buyers uncomfortable: hidden commissions and kickbacks in China/Asia sourcing.
Many importers work with agents or trading companies because they don’t speak Chinese, don’t want to manage day-to-day communication with factories, and hope someone on the ground will “take care of everything”. That can make sense… as long as you clearly understand how those intermediaries make their money.
In reality, a lot of agents and trading companies are rewarded in ways that are not disclosed, not aligned with your interests, and often quietly erode your margin – sometimes for years.
This article summarises the episode and adds some examples and practical steps you can take to “health-check” your own sourcing setup.
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What We Cover
- 00:00 — The uncomfortable truth about hidden commissions
Adrian and Renaud set the scene by explaining why kickbacks and undisclosed commissions are still so common in China sourcing, and why many buyers prefer not to look too closely at how their intermediaries are really paid. - 01:32 — Agents vs trading companies: who are you actually buying from?
They clarify the difference between a buyer-side agent and a trading company acting as the seller, and show how both can either add real value or simply sit in the middle, taking a margin. - 07:48 — When middlemen genuinely help (and when they don’t)
The discussion turns to legitimate cases where a trader is effectively the factory’s sales office, versus opaque setups where you’re blocked from seeing the factory, auditing it, or understanding costs. - 12:44 — Double-dipping and supplier-side commissions explained
Renaud breaks down how “hidden” supplier-side commissions and rebates work in practice, including situations where an agent is paid by both the buyer and the factory, giving them zero incentive to push your prices down. - 18:01 — Opaque workshops, “circles of trust,” and margin erosion
The conversation explores how some traders place orders into small, low-visibility workshops inside their trusted circle, quietly boosting their own margin while increasing your quality, compliance, and continuity risks. - 24:44 — Red flags your agent or trader is misaligned
They list practical warning signs: you don’t know who the real manufacturer is, factory visits and audits are discouraged, pricing behaviour doesn’t make sense, and any talk of benchmarking other suppliers is shut down. - 26:56 — What a transparent sourcing model looks like
Adrian and Renaud outline a healthier model where roles and fees are explicit, factories are visible and auditable, and service providers are paid transparently by the buyer instead of relying on hidden commissions. - 31:42 — Simple sourcing health-check and next steps
The episode closes with a set of self-check questions to assess how well you really know your supply chain, and guidance on when it may be time to rebuild relationships on firmer, more transparent ground.
