Why some foreign companies would like to choose middle agents to cooperate?
Wrote by Jane Hu ( 2018/7/24 )
( Skype: janehuqinqin)
Some friends would like to label me as an old bird in international trade business, haha, one is because I work in this field so long, one is, I indeed experienced quite a lot in dealing with people from different cultures.
Today, I’d like to touch something about why foreign companies choose middle agents to cooperate with, instead of factories directly.
Some factories are ofen confused, they have all contact info. of the foreign client, they produce goods by themselves, the price couldn’t be more competitive among sellers, but finally the client still chose one middle agent to work together, even the price is a bit higher.
I have to say, those factories ignore a very important factor, which is called service. No doubt, especially for business people, everyone wants to buy products at the best price with best quality. But, in international business, prices could be divided into 2 parts, visible cost and invisible cost.
From visible cost, seemly factories have an edge over middle agents. That’s why many sales persons would like to boast themselves with factory background.
Maybe, it also applies to the thoughts of foreign buyers at early stage. But I have to say, once their business grows bigger and bigger, or they deal with factories directly for more and more challanging things, in many cases they prefer to give up because of big headache they are suffering, then shift to one middle agent to handle all.
That’s invisible cost, it occurs in terms of communication, time,mindset, etc...
Mindset is very very difficult to change, let alone that you want to have somebody on the same page with you. Factories are more focused on producing, mass quantity. They commonly lack a marketing&service awareness. They think as long as their products are quality-satisfying, and prices are lower than peer, they definitely will win. So, they like opening with the following setence during negotiation “ let me know your target price, we will do as much as possible. “
Factories think all orders are based on price competition, their discussion ways are often simple and direct. But they are wrong, price doesn’t decide everything. People are both rational and emotional, if you forget to pay attention to their emotional needs, you can lose, too
A good middle agent is good at digging out the foreign buyers’ need in heart, they don’t bargin with clients only on the issue of price, they try to put themsevles on the shoe of their clients, help their clients to find the best solution.
Info. from factories are rough, or sometimes even inaccurate, incomplete, it’s hard for foreign buyers to make proper judgement or feel very secured. It may waste a lot of time and efforts for foreign buyers but no good result at all.
Middle agents are different, they know well to filter various info., testify techinical figures from factory, then make an analysis to foreign buyers, it will be very clear for a decision-maker.
In QC aspect, middle agents act as a third party to help them supervise quality from factories, they solve problems as much as possible before shipment, it can save quite a lot of troubles for clients.
A wise buyer cares about money, but they also have good awareness to entrust something to reliable persons, so that they could empty their time and effort to do bigger things. It is actually a matter of saving money more.
We, as international sales, whether from factory or trading companies, should do self-reflection often“ do we really provide clients with the best service ?”
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