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