Chapter 4 – Buying Factory Direct or Through a Middleman

Let me give you some help for your decision with the pros and cons of buying from a middleman. Buying factory direct or through a middleman both have their merits and you have to ask yourself what is more important for you. 

Pros and Cons of Working With Middlemen


  • Easier communication for you with a single contact for several factories
  • They usually have a better showroom for product selection
  • They are experienced in dealing with customers from different countries
  • They sometimes invest in their own tooling and therefore have their own products
  • Their staff is more proficient in English which makes discussions and negotiations easier


  • Their prices are less competitive because you have to pay for their service
  • They may not be able to present you with the latest products because they choose not taking the risk to be first
  • They will try directing you to certain factories because they have trade agreements with them
  • Solving claims through their help may prove more difficult due to the relationship with their factories. Since they have projects to execute for other customers, their factories may be more important to them than your business.

In some cases, you will be forced to work with an export agent simply because the factory does not have an export license or does not want to invest in extra marketing personnel.

Establishing Communication

After you have browsed the sourcing search engines and narrowed your selection down to a handful of suppliers you must start communicating with them for price inquiries and gathering information about new developments they have in their pipeline.

At this stage, you will find out which factories or suppliers are more responsive and show a better understanding of your needs. If they do not reply as expected at this early stage, how can you expect them to reply quickly later on, after you have placed your orders to them? In most cases, you will however experience that their response is reasonably good. Some companies are also using Skype or MSN Messenger as an additional means for communication, which makes the communication more personal.

Always remember that building up a good personal relationship with your Chinese suppliers and their staff is essential. If you manage that part successfully, you will benefit when negotiating prices or trying to obtain help for solving an imminent problem.

When communicating with the selected factories or suppliers, you should also inquire about their company background (ownership, how much staff, and their main export countries). Learn if a factory is mainly producing goods for countries with a known lower quality requirement. They may not be able to comply with the stricter requirement of EC countries or the United States. Your brand name should be included in your communication in order to give your company a professional profile. Do not forget that some of these factories will receive hundreds of inquiries from many different importers and sometimes have to make decisions with whom they want to proceed.

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