When we help our customers source from China, we usually try to avoid the middleman and find the real manufacturer. Especially for larger enterprises, cutting out middlemen and dealing directly with suppliers is critical. For small-scale operations, however, this instinct may not always be the correct path to take. The decision ought to be determined by the skill-sets and capabilities each party can readily provide.

For example, Amazon Seller A has reached an impasse with Chinese Factory B. After several rounds of negotiations, they have reached an agreement about quality and price. The contract has yet to be finalized, however, because Seller A has an issue with Factory B’s lead time provided. Factory B has an issue with the Seller A’s payment schedule. Weeks have passed and there does not seem to be a solution in sight. Finally, Factory B finds an agent who is highly regarded in this industry to help mediate. The agent arrives at a creative solution: he utilizes space in his own warehouse to purchase additional units of Seller A’s product. Having the additional units handy, the agent reduces lead-time down to Seller A’s desired timeframe. By having more payments made up front, Factory B was also satisfied. Both parties signed individual contracts with the agent instead of with each other.
Another key value a middleman can bring is accessibility. Many Amazon sellers believe that they can simply find the best suppliers on Alibaba by themselves. But most people don’t know many of the best suppliers in China don’t even list their products on Alibaba. Within industry circles, it is commonly known which manufacturer has the highest quality with the lowest price, and everyone wants their products. So those top factories never have to worry about external sales, as they are usually working at full capacity anyway. Why would they waste their time on Alibaba when they already have enough orders to work on? In this situation, the only way for you to get to those products is through middlemen – either a sourcing agent or a trading company.

Whether it’s providing better access or expediting negotiations, a skilled middleman will take care of many of your unknowns. Instead of spending weeks haplessly sifting through Alibaba or waiting on a supplier to change his mind, a middleman will let you get back to what you do best: selling.