Buying Direct From A Manufacturer

In this article, we’re going to reveal the advantages and disadvantages of buying directly from a manufacturer online. By partnering up with a supplier on a leading marketplace such as Alibaba.com, you can enhance your business, expand your product range and nurture your organic growth. So whether you’re a wholesaler hoping to increase overseas sales, a manufacturer looking for new clients, or a retailer searching for a reliable online manufacturer, let’s discuss the pros and cons of forging this lucrative business relationship.

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The 5 types of different online buyers

Each and every customer is unique, but knowing how to identify the different types of online buyer can help you secure more sales as a manufacturer or supplier. Some buyers are impulsive, others are attracted to free shipping promotions, while some need a more personal approach when it comes to forming a working relationship. To help you understand the different types of potential buyers online, let’s take a look at five of the most prominent.

Irrelevant shoppers

Unfortunately, you will experience some online users who will inquire about your business, products, and services without any intention of placing an order with you. Failing to identify an irrelevant buyer can mean wasting a significant amount of your time and resources. One of the most effective ways to respond to such buyers is to request information from them regarding their needs at the very beginning of the conversation. Ask about the products or services they’re interested in, their business, target market, budget, and ideal turnaround time. Should their budget or timeframe determine that they’re not going to be a valuable customer, you can kindly inform them of this. If they begin to take up a lot of time by asking questions, it might be worth developing an FAQ page where you can direct them to.

Repeat customers

The most valuable type of customer you can have as a business is a repeat buyer. This is a customer who places multiple orders with you and has likely bought into your brand and business. They will value you as a supplier and can be encouraged to place higher value orders through repeat-order discounts. It’s always good to create loyal customers, as they will help you grow organically and are often willing to provide customer testimonials.

Discount seekers

These types of buyers are always on the lookout for a reduced price, sale, or discount code. They will be shopping around across multiple sites to secure the most economical deal. To convert this type of buyer, it’s a good idea to highlight any offers you have, such as free delivery on orders over a certain amount, repeat order discounts, and new customer introductory deals. Remember that discount shoppers are not emotionally impulsive but they will be reading customer reviews and checking out your top competitors before making a final decision.

B2B customers

If you work with both B2C and B2B customers, it’s important to know the difference between the two. B2C buyers will appreciate any marketing material and product information that they can use to sell to the general public. They may wish to purchase a small order first to test the water before investing in a new product. B2C buyers will likely stock up a month before holidays such as Christmas, Valentine’s Day, and Summer. B2B customers on the other hand, will often place bulk orders within a certain period of time, such as the first quarter or third quarter of the year. This is due to annual budget allocation. Departments will be given a certain amount of money to use within a period of time. Read 5 B2B sales challenges and how to overcome them here.

Technical buyer

A technical buyer will require a lot of data, product information, and case studies before making a final decision. Having these key marketing materials to hand as a manufacturer or supplier will help you to generate more sales online. Empower technical buyers with side-by-side product comparisons and detailed buyer guides.

The advantages and disadvantages of buying direct from manufacturers

Supplier relationships can be extremely valuable for retailers. Let’s take a look at the advantages and disadvantages of working directly with a manufacturer.

Advantages

One of the main advantages of buying directly from a manufacturer is that you gain access to more affordable wholesale prices. You are basically cutting out the middleman, meaning there won’t be any extra fees to take into account. By working directly with a retailer, a manufacturer will be able to offer wholesale prices, allowing you to have a competitive advantage within the market. This lower cost of production can also extend to low-volume orders. Rather than always having to place a minimum order quantity (MOQ), forming a relationship with a manufacturer might help you to dodge this standard requirement and purchase in smaller quantities.
By forming a solid long-term working relationship with a local or overseas manufacturer, you will be able to become far more flexible and make changes to the goods you are buying. You could ask the manufacturer to incorporate your branding, ask for changes to the product design, or even create a new and innovative product. Again, this allows you to have the upper hand over your competitors and to bring a completely new product to the market.
Suppose you do wish to create a brand new product. In this case, you may require a prototype to check the product before placing a large order. By connecting with a manufacturer as a retailer, you can request a prototype to be made, and carry out in-depth testing and market research, minimizing the risk associated with launching a brand new product to the market.
Many manufacturers also offer a reduction in overall production time. This means retailers will be able to take advantage of a shorter lead time and faster shipping time. Not only will this speedy manufacturing process be saving you a vast amount of time, but it will also save you money, since the longer it takes to manufacture a product, the more it will typically cost.

Disadvantages

Many buyers worry that by effectively cutting out the middlemen and working directly with a manufacturer they could have their product ideas and concepts stolen. To make sure this doesn’t happen, ask for external companies working on new product ideas to sign a non-disclosure agreement.
Working with one supplier rather than working with a number of manufacturers could cause supply chain issues in the future. Should the manufacturer experience an issue that creates a substantial delay in overall production time, you may not have enough finished products to sell. By spreading the risk across a number of suppliers, you minimize one supplier’s issues from ever putting your business on hold.
Rather than work directly with a manufacturer, why not take advantage of an established online marketplace such as Alibaba.com. This type of platform allows entrepreneurs, start-ups and SMEs to compare potential suppliers conveniently in one place without having to spend time meeting each one on an individual level.

Finding the right manufacturer for your business

Here are some top tips to help you find the right manufacturer for your business.

Choose a supplier who is able to confidently communicate in your native language. This helps to avoid any issues caused by miscommunications as a result of the language barrier.
If you think a manufacturer is charging too much for their services, but you value their experience and would still like to work with them, consider asking whether they would be willing to offer you free shipping.
Visit a manufacturer’s website to read customer reviews and case studies before placing larger orders.
If you need to buy smaller quantities or even single quantities, make sure to ask the distributors as soon as you start communicating with them. This will help save a considerable amount of time when searching for the right manufacturer for your business.
If you’re looking for a new supplier, request a sample to carry out your own quality check.
Use free online supplier directories to find new suppliers for your e-commerce business.

Buying and selling on B2B marketplaces

B2B marketplaces such as Amazon Business and Alibaba.com help to connect B2B companies with reliable and reputable manufacturers and suppliers. As a digital ecosystem, B2B marketplaces can be considered the result of the evolution of traditional B2B communication.

Learn more about B2B marketplaces and how to utilize them.

Before the rise of online marketplaces, retail businesses would need to call, email, or visit a manufacturing company or new supplier to carry out diligence before forming a long-term business relationship with them. Today, an e-commerce business can reach out to a wide range of local and foreign manufacturers simply by signing up to Alibaba.com. Discover the benefits of using Alibaba.com as a business.

Sell on Alibaba.com

Alibaba.com is a world-leading online marketplace where sellers and buyers can meet and build strong working relationships. Whether you’re an international manufacturer, a local supplier, or a B2B retailer, sign up to Alibaba.com to unlock a wide range of benefits. With a unique business model, Alibaba.com helps small to medium enterprises, as well as individuals, enjoy higher profit margins, expand overseas, and experience substantial business growth.