Buy without middlemen from China
Buy from China without intermediaries
Flip through almost any product these days and you're likely to find a "Made in China" label. At
While it is easy to find a "supplier" in China, this article aims to help buyers avoid the middlemen in China and go directly to the factory
Definition of intermediary
An intermediary is someone who provides little value in the supply chain, perhaps just rolling and making a margin. On the face of it, they may claim to have a close relationship with the factory for added value, but if they don't allow you to communicate directly with the factory, then you're dealing with a middleman. If intermediaries provide legitimate value (e.g. logistics, project management or quality inspection), there may be a place for them in the supply chain. But if the intermediary isn't transparent about where their margin lies, it's likely that the actual value of their inspection or project management services is greatly inflated. Before you sign up with a broker, simply ask them to separate their "service" fees from their "production fees." If they do not deal with this issue, you will realize that their role in the transaction has no value
Why go directly to the factory?
There are four reasons why a buyer should avoid intermediaries as much as possible
Costs: Additional layers increase costs
Quality: If the Chinese middleman makes his profit margin by adding a mark to the product, then he has an incentive to push the buyer to the supplier, where he can make the highest margin, which is often the cheapest and lowest quality option. He is, add. The interest of the intermediary is not aligned with the interest of the buyer to find the best price/quality ratio
Security (intellectual property rights): If the intermediary does not disclose the actual location of production, the buyer has no way of knowing who has access to the sensitive design and branding. The use of middlemen is the #1 reason that counterfeits are so common in China, as many buyers don't know who actually makes their product. If you don't know who makes it, you can't control your product. Furthermore, unlike a factory with actual workers, equipment, and facilities, intermediaries have few physical assets and can disappear into the dust of Zhejiang or Dongguan if something goes wrong, such as an intellectual property infringement lawsuit or quality recall.
Communication: In order to prevent the buyer from removing the intermediary, the intermediary will make every effort to prevent the buyer from identifying the true identity of the manufacturer. This extra layer increases communication time and prevents the buyer from speaking directly to the people who have the most knowledge about the product - the production line engineers. This muddy line of communication becomes particularly troublesome when technical problems arise in production and the factory engineering team and the buyer must communicate through a Chinese intermediary who may not have the technical understanding to properly explain the issues.
How to recognize an intermediary
Assume all potential suppliers are intermediaries until proven otherwise! The most common thing you'll hear from middlemen is that "they use their overall buying power to help you get the best price with the factories they've already set." 99% of the time this is not true and is just a soft sell message to make the buyer feel safe and keep you away from the factory. Chinese middlemen may even say that they "own the factory", but when it comes to visiting the factory, you will hear excuses like "the power is out" or "let's just meet at the sales office". The hope that you'd never see production was at least ethical if the middlemen above simply claimed to be foreign sales representatives.
China has a vast manufacturing base and in most cases there is no need to use an intermediary because there is a factory there that has the right combination of price, quality, service and time for your specific sourcing program. It is my strong belief that the vast majority of China supplier intermediaries provide little or no value to your supply chain.
Avoid factories that refuse to mention the name or location of their manufacturing facility
Focus on those factories that can clearly demonstrate manufacturing experience with your particular product or manufacturing method. If they are a real factory, they should have quality samples and documentation readily available
If you can arrange a factory visit
Does your contact's business card match the factory staff's information? If the cards don't match in name, color, and address, your contact is probably a Chinese middleman
Do the factory people clearly know your target audience, or do they give you business cards to the factory workers when you visit "your factory"? At worst, it might be his first time working with the factory and you can build your relationship without him.
Note that polished English skills do not indicate production skills. Often the most polished websites are run by commercial companies. Look for clear information about operation size, equipment and staff. If they offer a wide range of products, be careful. Ask for factory ownership documents. Be clear that the place of production may be inspected by you personally and that this place cannot be changed without the approval of the buyer. (You'd be surprised how many middlemen take a buyer to visit a factory, only to switch to a cheaper, lower-quality option after the buyer leaves