What Are the Advantages of Using Middlemen?
Post 1 of 15
Buyers always want to buy directly from manufacturers. So what is the value of middleman / trading company? Under what circumstances will buyer want to deal with middleman? Are there any differences for different products?
04 Jul 2007 22:39
Post 2 of 15
In my opinion much of the value of middlemen depends upon the buyer.
If you are an expert at what you are buying and you have a good deal of experience with the quality issues etc involved with the products that you buy then a middle man is going to be of less value to you.
If you know the prices for the products that you are buying well such suppliers know that they are dealing with an expert in that field then again a middle man is going to be of less use to you.
If you are buying in volume and/or have your own forwarder to assist with the shipping then again you dont need a middle man as badly as some others may.
If you speak the language that the suppliers use then that is also a reason that you may not need a middle man. Yes most suppliers on Alibaba do have English speaking staff but in many cases their English ability is lacking. Speaking with the girl or guy in the sales office is one thing, but how do you deal with a claim through the boss if you dont speak his language.
If you regularly visit suppliers and make it a point to verify all new suppliers by at least making an initial visit then you can probably do without a middle man.
If you are able to do a pre-shipment inspection or have the money to pay an expert inspection company to do this for you then you probably could do without a middle man.
However if you cant meet all of the above criteria then perhaps a middle man is worth consideration.
Why not use a middle man? I guess that there are two common reasons. One is the belief that you can get a better price by dealing with the factory direct. The other is the belief that by dealing with the factory directly you will get more precise information as it will be first hand rather than third hand. Personally though I dont believe that either of these two situations are necessarily true by cutting out the middle man. Yes it is possible that things could go better but it is also possible that they could go a lot worse. You only have a little to gain but a lot to lose. I think that you only have to look at the fact that a lot of the big retailers actually choose to only deal with middle men that you get an appreciation of there being a reason. Any of these retailers could contact factories direct and probably get the very best possible attention from the factory. Many of them have tried this over the years, but they nearly always end up back with middle men.
In the interests of transparency I am the chief representative of a foreign buying group here in China, and while we are not really a trading company, we could certainly be classified as middle men so perhaps I am biased on this issue. I really do believe however that the advantages of going it alone are far outweighed by having on the ground assistance.
If you are an expert at what you are buying and you have a good deal of experience with the quality issues etc involved with the products that you buy then a middle man is going to be of less value to you.
If you know the prices for the products that you are buying well such suppliers know that they are dealing with an expert in that field then again a middle man is going to be of less use to you.
If you are buying in volume and/or have your own forwarder to assist with the shipping then again you dont need a middle man as badly as some others may.
If you speak the language that the suppliers use then that is also a reason that you may not need a middle man. Yes most suppliers on Alibaba do have English speaking staff but in many cases their English ability is lacking. Speaking with the girl or guy in the sales office is one thing, but how do you deal with a claim through the boss if you dont speak his language.
If you regularly visit suppliers and make it a point to verify all new suppliers by at least making an initial visit then you can probably do without a middle man.
If you are able to do a pre-shipment inspection or have the money to pay an expert inspection company to do this for you then you probably could do without a middle man.
However if you cant meet all of the above criteria then perhaps a middle man is worth consideration.
Why not use a middle man? I guess that there are two common reasons. One is the belief that you can get a better price by dealing with the factory direct. The other is the belief that by dealing with the factory directly you will get more precise information as it will be first hand rather than third hand. Personally though I dont believe that either of these two situations are necessarily true by cutting out the middle man. Yes it is possible that things could go better but it is also possible that they could go a lot worse. You only have a little to gain but a lot to lose. I think that you only have to look at the fact that a lot of the big retailers actually choose to only deal with middle men that you get an appreciation of there being a reason. Any of these retailers could contact factories direct and probably get the very best possible attention from the factory. Many of them have tried this over the years, but they nearly always end up back with middle men.
In the interests of transparency I am the chief representative of a foreign buying group here in China, and while we are not really a trading company, we could certainly be classified as middle men so perhaps I am biased on this issue. I really do believe however that the advantages of going it alone are far outweighed by having on the ground assistance.
05 Jul 2007 00:17
Post 3 of 15
Replying to [Egernia]: Excellent reply and I have saved it for reference. It has got a lot of clarity.
05 Jul 2007 01:58
Post 4 of 15
Replying to [Egernia]:
Thanks for your clear and excellent answer.
Thanks for your clear and excellent answer.
05 Jul 2007 02:09
Post 5 of 15
Replying to [tomorrowneverknow]:If you don't have enough resources such as time, knowledge...etc you can give that responsibility to the middlemen
05 Jul 2007 03:32
Post 6 of 15
Replying to [Egernia]:Great Essay ! I will keep it & learn it!
05 Jul 2007 03:52
Post 7 of 15
we are trading company and specilize in textile business.With our smooth communication and good experience in textile, we have set up long good business with our customer. On the other hand, we have advantage in doing after-finish product. You see, the product can not been completed in one factory and sometimes the product need to be finished in three or four factory. so customer need supplier (trading company)which can arrange fabric and contact factory. If so , the customer will receive product with good quality and good price. In fact, here we can think trading company as organizer.
05 Jul 2007 19:36
Post 8 of 15
Replying to [tomorrowneverknow]:
There are many people like middelman in China some are Chinese and some from other countries like us.
Once you get over the trust issue with the middleman you then have someone that works for you and with your intrests at heart only, and not thinking of the supplier.
Chinese communication would play a big part in some deals, nice to talk to the sale person on msn, but in business we need more, visits to the supplier checking production and sorting issues when they come up, they sales person may not be there all the time, we know if they dont do well with sales after chinese new year they would leave the supplier, i see too many times.
Most real factories would off their products but may not like to help you find other items and send to your container, but the middleman can arrange your sourcing and pricing and get the all in one container for you, this can be done at the factory or supplier or at the port of sending, in any case the Customs papers must be right.
When dealing with new suppliers i find direct verification is the best and the middelman can help you here, they can arrange to visit the supplier for you and get all info for your data, face to face business in the best.
Many time contracts need to be signed and the middleman can be your choice again, they can arrange the contracts, like moulds and complete them in Chinese and English.
So the wide range of products in the main format of any middleman or trade co, as they can deal with lots of suppliers, so the shop window can be large.
Prices can be lower in some cases for the middleman, like us we deal with many suppliers and when we re-order we would get the est deals, i don't need to ask, so this can be past on to the buyers.
The production time can be effected, and i have seen where a single buyers order would be set in the back of the production time frame and move the middlemans order forward, it's normal to make sure that your best customers are more happy, that's real life.
The middleman can give real life information to you about the supplier, the quality, types of products, and costs, checking the certifications, so the need for someone on the ground you can trust would only do well for your business.
Not all factories can export their products from China and so the trade company can help so many little factories with their business, and most large buyers from multi stores would use trade companies first and not the factory.
Small factories can give better prices for products but your will have to bear in mind the quality checks and the lack of employees in the factory, quality managers, quality systems and sales people not speaking English, so the middleman again would be the choice.
Product background is another key, we cannot know about all products, so some area's would be better for us than others, so the choice of the right person to help you is paramount, if we deal in clothes than thats the first for us, so i need to do some research, so the buyer must deside to use me or someone that deals in this market, if they want a wide range of products again base your requirements on the whole deal.
It's is always best to have someone in China on your side, and this would show in many deals later.
When you are living in China and you do lots of business here you would have many contacts and these contacts can help not just you but your buyers too, having friends in China you get to know and understand the systems much faster.
There are many people like middelman in China some are Chinese and some from other countries like us.
Once you get over the trust issue with the middleman you then have someone that works for you and with your intrests at heart only, and not thinking of the supplier.
Chinese communication would play a big part in some deals, nice to talk to the sale person on msn, but in business we need more, visits to the supplier checking production and sorting issues when they come up, they sales person may not be there all the time, we know if they dont do well with sales after chinese new year they would leave the supplier, i see too many times.
Most real factories would off their products but may not like to help you find other items and send to your container, but the middleman can arrange your sourcing and pricing and get the all in one container for you, this can be done at the factory or supplier or at the port of sending, in any case the Customs papers must be right.
When dealing with new suppliers i find direct verification is the best and the middelman can help you here, they can arrange to visit the supplier for you and get all info for your data, face to face business in the best.
Many time contracts need to be signed and the middleman can be your choice again, they can arrange the contracts, like moulds and complete them in Chinese and English.
So the wide range of products in the main format of any middleman or trade co, as they can deal with lots of suppliers, so the shop window can be large.
Prices can be lower in some cases for the middleman, like us we deal with many suppliers and when we re-order we would get the est deals, i don't need to ask, so this can be past on to the buyers.
The production time can be effected, and i have seen where a single buyers order would be set in the back of the production time frame and move the middlemans order forward, it's normal to make sure that your best customers are more happy, that's real life.
The middleman can give real life information to you about the supplier, the quality, types of products, and costs, checking the certifications, so the need for someone on the ground you can trust would only do well for your business.
Not all factories can export their products from China and so the trade company can help so many little factories with their business, and most large buyers from multi stores would use trade companies first and not the factory.
Small factories can give better prices for products but your will have to bear in mind the quality checks and the lack of employees in the factory, quality managers, quality systems and sales people not speaking English, so the middleman again would be the choice.
Product background is another key, we cannot know about all products, so some area's would be better for us than others, so the choice of the right person to help you is paramount, if we deal in clothes than thats the first for us, so i need to do some research, so the buyer must deside to use me or someone that deals in this market, if they want a wide range of products again base your requirements on the whole deal.
It's is always best to have someone in China on your side, and this would show in many deals later.
When you are living in China and you do lots of business here you would have many contacts and these contacts can help not just you but your buyers too, having friends in China you get to know and understand the systems much faster.
05 Jul 2007 22:32
Post 9 of 15
Like many agents i am married to a Chinese girl, and we have been together 3 years now, so you can understand more about the Chinese life too, well i am in UK now on business and she is back in China, she is a great girl ![[em19]](http://img.alibaba.com/images/eng/style/icon/emoticons_great.gif)
At the end of the day just see what the middleman can offer you, sure they are not all the same, some would start to help you from day one, others like us like to have a contract made first and get a small start up payment from the buyers first.
Like suppliers, you need to trust the middleman so get ref from them, who they deal with and the clients, i am seeing a client now in UK, they contacted me at my office in China, but they could not trust us at first to send money, we understand this and we give them other contacts of clients in UK that had goods sent to them and have re-ordered, so later they come back and signed up.
Maybe not all agents are like us, we sourced products for our UK client in China, the we bought them and sent to our office in China, had to order again as the manuals was worng and they forgot the cases, we checked the products and tested, then i come back to UK and met the clients and gave the samples for them to test, they just paid me the sample cost, as i have other clients in UK this works for us well.
We have been to other countries too to see clients, but only would do this after they re-order other 3 times.
I hope this information can help others, every situation is not the same, so please get the right help for your business, good luck![[em17]](http://img.alibaba.com/images/eng/style/icon/emoticons_shake_hands.gif)
At the end of the day just see what the middleman can offer you, sure they are not all the same, some would start to help you from day one, others like us like to have a contract made first and get a small start up payment from the buyers first.
Like suppliers, you need to trust the middleman so get ref from them, who they deal with and the clients, i am seeing a client now in UK, they contacted me at my office in China, but they could not trust us at first to send money, we understand this and we give them other contacts of clients in UK that had goods sent to them and have re-ordered, so later they come back and signed up.
Maybe not all agents are like us, we sourced products for our UK client in China, the we bought them and sent to our office in China, had to order again as the manuals was worng and they forgot the cases, we checked the products and tested, then i come back to UK and met the clients and gave the samples for them to test, they just paid me the sample cost, as i have other clients in UK this works for us well.
We have been to other countries too to see clients, but only would do this after they re-order other 3 times.
I hope this information can help others, every situation is not the same, so please get the right help for your business, good luck
05 Jul 2007 22:33
Post 10 of 15
Replying to [tomorrowneverknow]:
Good topic! There is an old saying" the things exist mean the things are reasonable".
Good topic!
There is an old saying" the things exist mean the things are reasonable".
05 Jul 2007 23:33
Post 11 of 15
Replying to [tomorrowneverknow]:
To use a middlemen or trade company ,there are some advantages that we can not neglect ,
1) To save time .I am sure every buyer would know the difficulties to find a right factory .
2) To gurantee a good quality ,as far as I know,the middleman have a lists of factory who is good at what kind of products .
To use a middlemen or trade company ,there are some advantages that we can not neglect ,
1) To save time .I am sure every buyer would know the difficulties to find a right factory .
2) To gurantee a good quality ,as far as I know,the middleman have a lists of factory who is good at what kind of products .
06 Jul 2007 02:32