This article discusses the benefits and drawbacks of purchasing directly from manufacturers online. By collaborating with a supplier in the most reputable marketplaces like global sources, you can improve your business, increase your product line and foster the growth of your business organically.
It doesn’t matter if you’re a wholesaler looking to boost sales overseas, a manufacturer searching for new customers or a retailer looking for a trustworthy online supplier; we’ll look at the advantages and disadvantages of buy direct from manufacturer.
The benefits and drawbacks of purchasing directly from the manufacturer
Supplier relationships can be incredibly beneficial for retailers. Let’s examine the advantages and disadvantages when working with manufacturers.
Benefits
- One of the most significant advantages of buying directly from manufacturers is the access to wholesale costs. This eliminates the middleman, so there will be no additional costs. Working now with retailers, manufacturers can offer wholesale prices that allow the company to enjoy an edge in the marketplace. The lower costs of production may also be extended to smaller-volume orders. Instead of purchasing an order minimum (MOQ) or forming an alliance with a manufacturer, you can avoid this requirement and instead purchase in smaller amounts.
- When you develop a lasting collaboration with a local or international manufacturer, you’ll be able to become more flexible and can make adjustments to the products you are purchasing. You can ask the manufacturer to integrate your brand, request modifications to the design of the product, or even design a brand-new and unique product. It also gives you an advantage over your competition and creates a new effect for the market.
- Many manufacturers also offer lower production time overall. This means that retailers can benefit from a shorter period of lead time as well as quicker shipping times. Not only will this quick manufacturing process save you an enormous amount of time, but it can also save money since the more time it takes to create an item, the more it is likely to cost.
Drawbacks
- Many buyers are worried that eliminating the intermediaries and collaborating directly with the wholesale manufacturer may have their concepts and ideas taken over. To ensure this doesn’t occur, request for outside companies working on new product ideas for them to sign a non-disclosure agreement.
- Working with a single supplier instead of multiple manufacturers can cause problems with the supply chain shortly. If a manufacturer experiences issues that cause an enormous delay in production, you might need more finished goods to offer. By spreading the risk among several suppliers, you can prevent problems with one supplier from placing your business in limbo.
- Instead of working directly with the manufacturer, use an existing online marketplace. This kind of platform allows entrepreneurs, start-ups and small companies to evaluate potential suppliers all in one location without the need of with each on a personal level.
Reasons to Buy Directly
- Suppose the aim is to cut out the middleman, be more in direct contact with the product’s makers, obtain more competitive pricing, or gain access to the highest inventory quantities or high inventory levels. In that case, the “buying direct” trend will likely persist in the electronic procurement sector. The reasons are:
- In the case of many companies, partnering with wholesalers and distributors was the traditional way to get their goods before customers. With the advent of online, the distribution model is evolving. Manufacturing companies should refrain from wholesalers and distributing their products directly. This means that the inventory that you “see” is what you are getting since no middleman manages the inventory and ordering.
- Whether you’re buying unfinished construction products directly from a manufacturing facility or offering your customers the option to buy directly from your company or a third party, the primary benefit of buying direct is the lower prices,” according to ThomasNet.
