Tip #9: Know The Difference Between Manufacturers Vs Trading Companies
In general, it’s pretty easy to tell if a supplier is a manufacturer or a trading company (wholesaler/retailer). I did however notice some very distinct trends between the manufacturers and trading companies.
As a general rule of thumb, the ones that say “Import/Export Co” are more than likely not manufacturers even if their company profile states manufacturer.
Along with the obvious things such as price and MOQ differences, trading companies definitely had more of a pushy sales approach while the manufacturers seemed more eager to build a relationship.
In the beginning however, it might behoove you to buy from the trading companies because they will offer lower minimum order quantities (MOQ). Just know that the FOB prices (price per unit) will be higher with the trading companies and there is a greater chance for complications such as running out of inventory (if they’re not creating the product then they have less control over the amount of inventory that’s in stock)
Moral of the story – Know who you’re dealing with in terms of the type of supplier and the pros and cons of working with a manufacturer vs. a trading company.
Tip: In some cases I politely asked certain vendors what percentage of their business was manufacturing vs. wholesale. Most reps were more than happy to share that information.