Middlemen versus direct buy

2009-10-29T00:45:43Z

Over the course of a few years, my experience has been that while it is possible to work directly with parts suppliers of all business sizes in China, in general, the "hassle" factor of dealing with small businesses is quite high and large companies in China are not interested in selling parts unless the volume of the order is high or the order has high dollar value. By example, it is possible to source $100,000 worh of parts at a cost of $60,000 from smaller companies in China, but you will spend $20,000 supporting the effort. Larger companies are easier to deal with but want $80,000 for the parts as do the middle men who will manage the buy from a group of smaller companies on your behalf. It has also been my experience that companies who provide the service of buying from a number of companies in order to receive favorable pricing for you, have great problems themselves in managing the activity and often eventually establish their own manufacturing facilities. Is my experience familiar?

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2009-09-20T04:49:37Z

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