Manufacturing and Quality Control blog

Why would anyone want to buy through a trading company when they can cut out the middleman? Can’t I save money by going factory direct?

Importers often insist on working directly with the factories that manufacture their products. There are many reasons why: factory-direct pricing, having a direct line of communication to the factory itself, and other benefits generally associated with “cutting out the middleman.”

Bangladesh continues to make headlines as new revelations about the tragic Rana Plaza factory collapse come to light. This publicity is causing importers and international analysts to wonder about the pros and cons of sourcing products from a center for ultra-cheap labor such as Bangladesh in comparison to other options, notably China.

Even with the advent of websites like Alibaba.com and MadeInChina.com, sourcing products from China can be a daunting task. This is a major reason why many buyers forgo sourcing altogether and rely on agents or trading companies to do the legwork.

Have you ever struggled with the question of when to buy factory direct and when to go through a vendor or trading company? Importers are often highly motivated to secure the lowest per-unit cost possible for the items they purchase from China. The old maxim of “cutting out the middleman” leads many buyers to reason that purchasing factory-direct is the only way to get the lowest cost of goods sold, and is thus the only smart option for buying from China.

The Canton Fair is held twice every year, once in the spring and once in the fall. The fair takes place at the (aptly named) China Import and Export Fair Complex in the Haizhu district of Guangzhou. April 15^th marked the opening of this year’s spring fair, the 113^th session of the Canton Fair since it began in 1957.