The relationship between manufacturers, wholesalers, retailers, and consumers is evolving. Wholesalers were the major connection between manufacturers and end-users. Manufacturers selling products directly to consumers were a veto instead of a rule. It was the wholesalers, who served as brokers. They purchased bulk items from China manufacturers and resold them. This led to end-users purchasing the products at high rates.
Digitalization has triggered to shift towards customers buying goods directly from manufacturers. The mediator was the financially workable way to promote products towards target customers. Wholesalers were the connection with the human resources. The introduction of the World Wide Web evolved the e-commerce reach. Online retailing changed the end-users perception of the trading chain including the bond between the product manufacturers and wholesalers.
The shift towards a customer-centric approach has eliminated the role of distributors. For example, retailers from around the world can directly buy from China factories or even in their nation. Manufacturers are keen to adopt the B2C business model as it lowers their costs, enhances margins, and improves customer satisfaction. This approach has led to expansive development and more buying options with different benefits to clients. This nurtures strong relationships and roots brand loyalty.
Today, Chinese products are most in-demand and have become omnipresent. You will never fail to see a couple of products manufactured in China. There are some good reasons that China is turned into a worldwide manufacturing hub.
The reputation that the Chinese products are of inferior quality is wrong. Remember, Apple has its products manufactured in China. So, the myth about low-quality Chinese products is all wrong. Apple perceived something special in the manufacturing sector, so switched to China for producing its products. The infrastructure of China is eligible to produce high-quality products efficiently.
Bulk buyers have to pay extra to have a quality product manufactured but the product profits are consumed. If the cost is passed on to their consumers, then the rates go high. So, to save some money and keep rates low for end users, corners are cut while product manufacturing. The bulk buyer is in control of the product quality but even ensures to partner with an experienced Chinese manufacturer.
• Low wages & human resources - China has a huge population. The worker supply is greater than demand, so the wages are low. The locals are willing to work in multiple shifts at low wages. The massive labor pool helps in mass production, accommodates seasonal industrial needs, and caters to a sudden increase in the demand schedule.
• High-level productivity & skills – Chinese workers have high-level productivity & skills needed to work efficiently. It is crucial for handling product complexity and lead time. Experience in bulk production has offered the workers practice and experience to figure out how things can be completed more efficiently. It helps to ramp up manufacturing quantities and qualities.
• Superior infrastructure & manufacturing capacity – China has a well-developed train and road network that offers quick raw material delivery thus reducing the lead time. The energy grid dimension is vast, so there are vast numbers of high-tech factories. For export, the port network capacity is unmatched in the manufacturing sector.
• Material supply chain – The manufacturing process is supported by a comprehensive supply chain inside the production country. For textile production, they have natural resources, garment factories, and yarn production. For electronics, most of the components are sourced within China.
• Trusted suppliers – The local manufacturers have a strong relationship with suppliers around China as well as detailed knowledge about the ecosystem and networks.
China is progressing towards growth, so outsourcing your procurement projects directly to the manufacturer in China is a good move.
• Retail purchase means buying merchandise from retailers or/and wholesalers.
• Direct purchase means direct trading with the manufacturer in China.
In retail purchases, the products can pass more than one mediator before reaching end-users. It is a supply chain based on links between wholesalers and distributors. Each one adds to the initially low-base cost. Simultaneously, retailers offer consumers broad product options to choose from based on features like style, quality, and price.
Customers get a chance to search for alternatives and compare products before they make a decision. It is a personalized buying experience. The shipping cost is also eliminated when consumers buy products from retailers or wholesalers.
When consumers directly buy from China factories, it means averting the entire supply chain. Thus, the extra cost that compiles between mediators is eliminated. It is a budget-friendly option, but customers have few choices. Traditionally, manufacturers' profit was a fraction in comparison to wholesalers’ margin.
The manufacturers wanted confirmation of established retailers for creating awareness and driving sales. The elimination of mediators carried a crucial direct buying advantage and that is initial price decreased. However, there are other aspects customers need to consider ranging from shipping to packaging to warehousing to retailing and marketing.
Buying from wholesalers offers an array of advantages, but in certain circumstances, it is more sensible to use a wholesaler.
• When neither the buyer nor the manufacturer has sufficient infrastructure or/and management expertise. The challenges can be overcome with the benefits of lower initial rates of buying.
• When the trade model of the manufacturer comprises of high-volume bulk, which the buyer is unable to sell within a reasonable timeframe as well as has to store in external warehouses and incur high storage costs.
• When the price of the wholesaler is significantly lower than directly buying from Chinese manufacturers because high volume discounts are offered.
• When delivery of goods takes longer and accompanies high costs against duties and customs.
Buying directly is beneficial to manufacturers and buyers. Besides an increase in profit margins, the manufacturer can build a strong connection, build brand awareness, and even obtain the chance of offering an excellent customer experience. The buyers can enjoy access to specific products, which are unavailable in the stores.
They gain access to different inventories made instantly available. Buyers get the chance to compete for a broad market including the products that wholesalers are not interested in including within their generic & mainstream offerings. Using regional sources is at times expensive so many businesses are dealing directly with the Chinese manufacturers.
For example, the purchase of detergent powder or chemicals directly or via a wholesaler is convenient for consumers in Kenya. However, buying it directly from manufacturers in China is a cost-effective option instead of its branches in Ghana. The reason is that the local traffic and infrastructure can increase the inland shipping cost and so is less economical than buying from overseas.
The online retail opportunities have considerably simplified the direct purchase from manufacturer process right from locating a reliable manufacturer suitable to your project needs.
China is the world’s biggest manufacturer and exporter of manufactured goods. It has the infrastructure and several manufacturing industries that keep the country on top. There are several reasons to buy merchandise directly from the manufacturers in China. Even if wholesalers offer better prices sometimes, direct trade takes higher priority in terms of reliability, control, and support.
Savings are possible on transport, warehouse, and wholesaler fees without the external supply chain. Infrastructure costs, transportation, and warehouse can be shared between both parties involved in a contract. It benefits them both. The manufacturer can offer extra-large batches or even small quantities depending on your needs.
In China, the infrastructure is great and well-developed making the whole production business easier. The transportation facilities have immensely escalated within the last two decades. This vast infrastructure ensures to deliver products with high quality faster and safer.
In China, you will find trading companies and manufacturers. Work directly with manufacturers to lock better prices. If you order in bulk, then you get the products at much lower rates than expected.
Manufacturers offer good shipping options because they are knowledgeable about the local export requirements. You can obtain better control over the transit and handle the customs.
When you buy products from trading companies then there is a higher risk of less consistent product quality. There are some less ethical trading companies, who share misleading information via their websites or Alibaba or post fake videos and pictures on social media. They try to appear as manufacturers and display as if they are aware of what international consumers are looking for.
Directly buying from China factories ensures high authenticity levels. The manufacturers are unable to hold the same control levels with or without intermediaries. When distributors are involved, there is a potential quality dilemma and even delays in shipping. The lead times are more reliable when consumers directly buy from China factories. It means receiving the appropriate merchandise in good condition within a preset timeframe.
If you buy merchandise directly from the producers, it means you have a reliable and accountable person at the source. It ensures proper attention and care is taken in manufacturing the merchandise.
Direct communication offers transparency and clarity. The manufacturer can work on your products without confusion leading to a few mistakes. The information is flown faster and accurately. Direct communication allows nurturing a long-term relationship. This is beneficial to both the parties in agreement.
As you bond, you can contact the manufacturers in China and negotiate better rates, new product ideas, and other payment terms. You can even learn about the manufacturing process. Because of direct communication and good relationship, you get direct access to the product designing staff and engineers. You get a chance to chip in your ideas for product development. If the products delivered are not according to specifications, you have a better chance to resolve the issue or get a refund.
• Clear doubts, discuss issues, as well as obtain recommendations and guidance.
• Helps to address and resolve product changes and customization to increase your sales to end-users.
• As you are buying directly from a verified manufacturer, the inventory management is in control as you gain merchandise as and when needed with regular deals.
The directly buy from China factories approach is beneficial as it comprises high-level control from raw material to production phase to warehousing and shipping. However, you will need to make sure to partner with a reliable manufacturer in China for direct purchase.
• Make sure to do your research before committing in money and time. Make a list of factories with a well-established repute for reliability and quality.
• Check their previous companies and talk with them to know about their experience in working with the potential manufacturer in China.
• Check the manufacturer billing address because the account and the company name have to be the same.
• Visit the facilities of the potential manufacturers you listed after thorough research.
• Never hesitate to ask for licenses and registrations, ISO certification, and insurance proof.
• If the facility appears too clean, well-equipped, and well-organized ask if the manufacturing process is performed in this place or elsewhere.
• Ask about employee certification and training. If the manufacturer boasts ISO compliance then insist to see the original documentation and see if employees really understand and follow the standards.
• Raw materials quality varies extensively in China, so find out the material source. Be diligent to confirm the raw material standard.
• Is the equipment used for quality inspection property calibrated? Ensure that proper records are maintained about testing procedures and their results.
• Ask about the main contact you can reach out for project discussions.
Due diligence is essential to find a trustworthy manufacturer in China for direct purchase because assumptions are horrible at times.