Long awaited Part II of previous post.
Lots of noise in these modern times.
This noise says that if you import and if it’s not factory direct, then…you’re simply doing it WRONG.
Regardless of your success.
Your orders may arrive on time.
You’re keen on the price.
But if you’re not doing this directly from the facility that’s “putting hand-to-plough”, then you’re doing it wrong.
That sounds weird, right?
I mean if it’s working, then…why is it not working?
Like I said, that’s just noise.
If it works, it works.
Here’s more on why distributors in the promotional product industry shouldn’t always work factory direct.
They necessarily don’t WANT to work factory direct.
The factory doesn’t want to work with YOU.
Quantity & price advantage:
Trade companies, because they bring frequent work to the factories…
…because they frequently work in said industry (promotional product industry).
…since they have experience in working with overseas buyers on a more direct basis.
…offer favorable quantities that factories don’t offer.
If a factory offers the same minimum quantity that the trade company offers, the factory has to consider the risks involved.
- Handling fussy clients (factories view overseas clients as demanding. Promotional product importers by nature are demanding and lack understanding of manufacturing processes).
- Communication issues with foreigners. Misunderstandings that the buyers help rig up because they assume the factory would “understand”.
- Customization requirements, sampling, input from 3rd party vendors. The factory simply doesn’t want to get involved. That’s not to say they don’t want to do it…they simply don’t want to do it FOR YOU. Perhaps down the road, but you’ll have to show your sincerity and “grow” as a customer. Many customers don’t have the time to “grow” with a factory and show they’re a 5-star customer. Thus further proving the need for a trade company.
The capable trade company offers lower minimums, because they know what they are getting in to.
The factory offers lower minimums to the trade company, because they feel more comfortable working with the trade company.
The same thing applies to price.
Factories add on money to the project, to cover the unknowns.
It’s a large misconception that you’re always going to get a cheaper price when working factory direct.
I said it.
This kills the narrative of many companies.
Many companies tout your desperate need to work factory direct.
They do this so you’ll see what a complex web of complications you find yourself in.
And then, badda bing badda boom, you’ll need their quality control, sourcing or managing services to get out of the fire.
Trade companies do a better job of cataloguing information.
They have a better database of previous products.
Trade companies frequently quote at a faster rate.
Experience in or connectedness to the industry:
An capable trade company has experience in working with the promo industry.
Experience in working with YOUR country.
Let’s do a hypothetical.
Say you’re bringing in serving trays branded with an alcohol brand logo.
The trade company may have a catalog of all alcohol promotional products.
They have prices at-the-ready.
There’s some understanding of the end-user industry.
How about going factory direct?
The factory, although they make that serving tray, that’s about where the knowledge ends.
They may make items for many industries in many countries.
Therefore they’re less “on top” of the intricacies you need them to understand. In explaining these things to your factory, there will be a bit of “reinvention of the wheel”.
If you’re only planning to order a custom project 1-time.
- is it worth training the factory in all the necessary understanding?
- Or sticking with the trade company that understands nuances of the promo game?
More solutions / options:
If you’re not a large customer to the factory, they’re going to be rigid in solutions.
A trade company is more flexible on packaging options.
If the project needs input from third party vendors, the trade company is nimble in tying all of this together.
Trade companies are good at connecting 3rd party vendors…critical for the promotional product industry
A good trade company has an established supply chain.
A factory is more likely to say “sorry, we don’t do that.”
And it’s true.
They don’t “do that.”
If you’re not a vip customer (ie buying the most), a factory is likely to string together supply options on your behalf.
Importers in the promotional product industry tend to order on the smaller side.
Orders may be frequent.
But the orders are highly customized and diverse. Meaning that 1 factory, 2 factories, aren’t enough to service a promotional product importer.
A promotional products buyer may quote from and use many factories throughout the year.
A vast range of products require many different styles of production facilities.
Thus the trade company shines in servicing this type of buyer.
Many factories like it this way, especially when supplying to the promotional product industry.
Factories have relationships with the trade companies.
They are pleased to let this continue to play out.
It’s almost to the point of presumptuousness.
Or worst case, arrogance, to assume all factories want to work directly with the foreign buyer.
Places, regions, and people have structure.
Why is it, when buying from abroad, people think these structures are suddenly outdated?
Yes the internet and globalization shrunk the world.
But not entirely…at least not yet.