What does it mean when the supplier supplies a large range of products?

For this latest article in our middlemen series, we’ll talk in detail about What does it mean when the supplier supplies a large range of products?

What does it mean when the supplier supplies a large range of products?

But if you happen to missed the previous articles in our middlemen series, you can click these links.

We discussed in previous blog that cheapest price concept in China and the suppliers
that won’t tell their factory exact location are considered to be a huge red flags that
you’re dealing with trading company or middlemen.

Now, be wary if the Chinese supplier supply a very large range of products because a
factory is very particular in one or several kinds of products, if there are lots of kinds of
products in the catalog that presented by the supplier then it’s a big red flag that you are
dealing with the trading company.

I remember somebody was trying to tell me that—we’re buying arrow hats—their
factory made arrow hats and socks.  That’s what they were telling me.  And I
thought that was strange because the totally different production technique was
involved.  And sure enough, it was a trading company that represented those two
different products.  So when you find a factory, generally they are very
specialized in terms of the production methods and techniques, and the training
of staff.  So if they have a large product range, be very careful.  They’re probably
middlemen.  Either part of that range or the entire range is outsourced.

Options on one type of product may make sense.

Options on one type of product may make sense.

Manufacturing a separate set of products is a pointedly suspect!

Having more products that don't seem to fit a production technique is pointedly suspect.

Another thing, be careful with the popular website like the Alibaba and the international trade shows that offer online directory of Chinese suppliers claiming that they are factories. They even exhibit at their offline fairs, which adds to their credibility but this is not to say that there are no middlemen and trading companies in the trade shows. Going to a popular website and trade shows doesn’t mean it’s always the best option. You may consider the following options below to escape from the red flags mentioned from within our middlemen series.

  • Ask for sourcing agent to help you with the factory dealing as they have access wide range of factories.
  • Do not skip due diligence so you will discover red flags before having a final negotiation with the Chinese supplier
  • Factory visit so you will see their facilities, workers, equipment, and product line.

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About the Author: Michael J. Bellamy

About the Author: Michael J. Bellamy

Originally from Upstate New York, Mike moved to Asia in 1993 and is a China business advisor to both Fortune 500 companies and small businesses.  Recognized as an expert on doing business in China, he has been interviewed by WSJ, CNBC, FT & Bloomberg.

A featured presenter on China issues at seminars, trade shows and corporate events across the globe.

Learn more about Mike and AsiaBridge Law at
https://www.asiabridgelaw.com/business-advisory-services/

Mike is the author of “The Essential Reference Guide to China Sourcing
(available on Amazon).