| Ensuring that you are getting the best price possible | | | | broker. Either way, they will either choose to |
| for inventory is a vital process that should be equally | | | | mark-up the price or charge a commission rate for |
| as important to a company as ensuring quality is | | | | the transaction. Contacting the manufacturer directly |
| consistent and delivered on-time to customers. | | | | will cut out the middle man, allowing your company to |
| With many global brands opting for to directly | | | | save money on purchasing inventory. |
| outsource manufacturing to China, other businesses | | | | Outsource versus In-House Manufacturing |
| are attempting to follow by both taking advantage | | | | In business we are always told that we should focus |
| of Asian markets and also ensuring they do not have | | | | on our core competencies. What does that mean? |
| the profit margins of a broker to contend with as | | | | You should consider what your business has that is |
| well. Being able to locate and build relationships with | | | | unique over its competitors. Is it an idea for a |
| direct manufacturers is becoming increasingly difficult | | | | product, an ability to offer cost-effective solutions or |
| with the rise in brokers in the marketplace, however | | | | even an intricate understanding of a certain sector? |
| when you do indeed manage to locate one; the | | | | Whatever it is that your business has core |
| advantages of building a partnership with them can | | | | competencies in, it is important that your business |
| be beneficial for both retailers, wholesalers and brand | | | | highlights them in what it does in-house and |
| holders. | | | | out-sources the other aspects to companies that |
| China versus Other Developing Economies | | | | have special skills. |
| China has advantages when it comes to | | | | For example, if your company has spotted a potential |
| manufacturing over other Asian countries. One reason | | | | market for a product, then they should take |
| for this is the experience and education the country | | | | advantage of the opportunity that they have |
| has in delivering products that adhere to the rigorous | | | | identified. However that does not mean they should |
| standards that are required by both western | | | | manufacturer the product themselves. Ultimately, |
| legislation and consumers. Chinese labor is also | | | | they should follow the path that will allow them to |
| significantly cheaper than Indian markets for example, | | | | deliver quality at the best price; allowing them to |
| where rapid inflation is making it harder for Indian | | | | focus on their core competencies. |
| companies to compete on price alone. | | | | Therefore, if you are manufacturing in a western |
| Direct Outsourcing versus Brokers | | | | economy then you should ask yourself why. Why |
| When it comes to purchasing inventory, there are | | | | are you using an in-house workforce that may be 10 |
| certainly more brokers in the marketplace than there | | | | times more costly than what a Chinese company |
| are manufacturers. Some brokers will effectively | | | | may be able to pay? Why are you focusing on |
| manipulate companies into thinking they operate as a | | | | manufacturing when time could be better spent on |
| manufacturer, where as others will act as a legitimate | | | | sales, marketing and business development? |