Adv. and Disadv. of Dealing with Trading Company or Manufacturers

(20 Years of Experience in a Few Words)

As for my 21 years of experience in foreign trade, I would like to share some Advantages and Disadvantages of dealing with trade companies and Manufacturers with you.

  The following are some of the advantages of working with a Trading Company:

1.  Ability to consolidate a variety of items with various alternatives available.
2. High efficiency in communication. Fewer mistakes and misunderstandings due to no barrier in language. The staff of a trading company is more likely to work in an office, with greater language skills than factory workers who work in the plant. Of course, some big factories would have foreign trade departments as well.
3. Quick responses. Office staff will be responding faster than workers in the plant.

  The following are some of the disadvantages of working with a Trading Company:

• Some prices would be a little bit higher than the factory.
• Production lead time is sophisticated to control

  The advantages of working with a factory:

• In a factory, you’d have superior control over the production lead time. If the major operations and production take place in-house.
•  Prices are better compared to a trade company and Suppliers

  The disadvantage of working with a factory:

1. limited item categories per factory. Customers with varied needs and requirements would have to interact with many factories, resulting in time waste.
2. The price will be changed for the same item in various factories due to different factory sizes, management costs, production processes with various equipment, and detailed treatment On the other hand, a trading company would select the most suitable manufacturer according to the customer’s essential requirements.

Know who you are dealing with

Some customers think it’s better to share their ideas with the factory. Still, not many factories in China employ English speakers, which may cause a high risk of getting a product they aren’t happy with due to misunderstanding.

It is, however, difficult to build a trusting relationship in business. (It takes time)

The manufacturer’s price would be higher for a new customer or inquirer than for long-term and consistent old customers.

The factory will prioritize existing clients and larger order quantities when the quantity you place is small.

Trade companies would have multiple stable orders with their partners and consolidate small orders with current other customers’ orders.

So according to the order quantity and product types, we have to consider who will be the most suitable supplier.

You are welcome to contact us if you think our suggestions were helpful to you.

If you want to know more about how to judge a qualified supplier, pls continue to follow my next post. This was Trudy, the president of Yoho Outdoor Furniture.

I wish you all what’s good, better, and best as always! Thank you!

– CEO, Trudy