Why do some companies purchase goods from a trading company or agent rather than direct from manufacturers?


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Possible Duplicate: What factors will you consider when choosing a purchasing agent in China?

I am a purchasing agent and work for some American and British trading companies. They get orders from their customers and then they purchase the products from manufacturers in China. I am wondering why their customers do not purchase products direct from manufacturers in China?

Company Trade Trading

asked May 7 '11 at 19:23
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Steven
1 point
  • Voting to close - Steven should know how to be a purchasing agent by now. – Brandon King 8 years ago

2 Answers


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Mostly, it has to do with volume of purchase and logistics.

Most manufactures don't want to waste their time on low volume customers and the logistics of small volume orders is really not profitable for them.

Companies also get an advantage since they don't have to worry about any import/export laws or local customs -- the trading company takes care of it.

answered May 7 '11 at 23:28
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Jarie Bolander
11,421 points

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Marketing and branding... are a couple of reasons why primary manufacturers don't succeed in selling direct to customers. Particularly if they are based in China and the customers are in the west. Like Jarie said, they perhaps don't have the capability or motivation to put the effort into marketing the products to customers. They rely on the existing network of distributors and importers to take their product to market. The manufacturer can then focus on what they do best which is to make the product.

But you're asking from a customers' point of view... Same applies really. If you are the customer and looking for the product the chances are the first company you find that sell it will be the one that puts the most into marketing/advertising and branding. Often these are the companies at the retail end of the supply chain, not the manufacturing end. If the customer tries really hard to find the primary manufacturer, in some cases they will be able to buy it from them if they wanted to, but often the manufacturer won't be set up well to sell to individual customers in low volumes and they will just refer the customer onto a distributor.

answered May 7 '11 at 23:38
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Edralph
2,333 points

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