Comparing Different Channels for Sourcing from China Part 1/2

Generally speaking, if you do not have your own sourcing team in China, there are two ways to source from China : 1) Deal with the original suppliers directly, or 2) Use an intermediary.

Dealing with the original supplier directly

One can easily find some suppliers' information via the internet and start talking with their sales departments. Sometimes this can work well and the buyer can source the right products in this way. But often you will be unable to find the right person to talk to, or you cannot understand the salesman so well. You may also find that you do not have enough evidence to judge if this supplier is the best one in the industry, and it's not so easy to get a general look at the industry in China. Some suppliers you contact may not be able to export. It's hard to easily solve the problems that can occur during the transaction, which can result in late delivery, quality problems, or a host of other potential risks. Besides the language barrier, cultural difference is another main difficulty of doing business with Chinese people. These difficulties can sometimes confuse us or annoy us greatly which can severely inhibit one's confidence in sourcing from China. There are some successful cases where sourcing from China started with a cold call from a foreign buyer to a Chinese salesman. But you need to carefully analyze if this model suits your sourcing needs and accordingly deal with the suppliers with extra circumspection.

Using an intermediary

Most of the time, anyone buying from China needs to find an intermediary to locate the right suppliers and to implement the whole sourcing process smoothly from China, at least at the beginning of the process. With a professional intermediary's assistance, the buyer can be released from the problems inherent in possible information gaps and misunderstandings caused by language and culture differences, which can cause big mistakes and harm the business relationship. The buyers can think about dealing with the original suppliers directly when the cooperation is going smooth and a reliable business relationship has been built up after a certain period. In the next posting I will compare the two kinds of main intermediaries, based on knowledge and personal experience and knowledge built up over the years. A trading company specializing in the suppliers' industry, and a professional sourcing service provider could both be suitable candidates when hiring an intermediary.

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