How it can help your Business when you buy directly from a Manufacturer
There are both advantages and disadvantages of buying directly from a manufacturer.
Updated: May 30, 2024
There are both advantages and disadvantages of buying directly from a manufacturer. You can expand your product range, enhance your business and nurture your organic growth by partnering up with a supplier on a leading marketplace. This is applicable for a wholesaler who is hoping to increase overseas sales, a manufacturer who is looking for new clients, or a retailer who is searching for a reliable online manufacturer.
Types of different online buyers:
Identifying different types of online buyer can help in making more sales as a manufacturer or supplier, since each and every customer is unique. Some buyers get attracted to free shipping promotions, others are impulsive, while some want a more personal approach when it comes to form a working relationship. There are mainly 5 types of different online buyers. These include:
Irrelevant shoppers:
You may experience some online users who will inquire about your products, services and business, without any intention of placing an order with you. A significant amount of your time and resources will be waste if you fail to identify an irrelevant buyer. Requesting information from these buyers regarding their needs at the very beginning of the conversation is one of the most effective ways to respond to such buyers. You can ask about their business, target market, budget, the products or services they are interested in and ideal turnaround time. You can kindly inform them if you found that they are not going to be a valuable customer. Developing an FAQ page might help you in these scenarios where you can direct them.
Repeat customers:
Repeat customers are the most valuable type of customer in a business. Generally, multiple orders are placed by them and they will value you as a supplier. Repeat-order discounts can be used for these customers to encourage them to place higher value orders. Creating loyal customers is always a good idea, as are often willing to provide customer testimonials and they will help you grow organically.
Discount seekers:
Discount seekers are types of buyers who always on the lookout for a sale, reduced price, or discount code. They will be shopping around across multiple sites to get the most economical deal. It is a good idea to highlight any offers you have, such as repeat order discounts, free delivery on orders over a certain amount, and new customer introductory deals to convert this type of buyer. Although, discount buyers are not emotionally impulsive but they will often read customer reviews and check out your top competitors before making a final decision.
B2B customers:
It is important to know the difference between B2C and B2B customers if you work with both of them. Any marketing material and product information that they can use to sell to the general public will be appreciated by B2C buyers. They may purchase a small order first to test the quality before investing in a new product. B2C buyers will likely stock up the product a month before holidays such as Summer, Christmas, Valentine's Day. On the other hand, often bulk orders are placed by B2B customers within a certain period of time, such as the first quarter or third quarter of the year which is due to annual budget allocation. A certain amount of money will be given to the departments to use within a period of time.
Technical buyer:
A lot of data, product information, and case studies are gathered by a technical buyer before making a final decision. It will help you to generate more sales online by having these key marketing materials in hand as a manufacturer or supplier. Technical buyers can be empowered with side-by-side product comparisons and detailed buyer guides.
Advantages of buying direct from Manufacturers:
- You can gain access to more affordable wholesale prices when you buy directly from a manufacturer as you can cut out the middleman. So, there won't be any extra fees to take into account. A manufacturer will be able to offer wholesale prices by working directly with a retailer which allows you to have a competitive advantage within the market. The need of placing a minimum order quantity (MOQ) can be avoided by forming a relationship with a manufacturer.
- You will be able to become more flexible and make changes to the goods you are buying by creating a good long-term working relationship with a local or overseas manufacturer. You will be able to incorporate your brand, make changes to the product design, or even create a new and innovative product by requesting the manufacturer which allows you to to bring a completely new product to the market and stay ahead of your competitors.
- A prototype is required to check the product before placing a large order if you wish to create a brand new product. You can request a prototype to be made by connecting with a manufacturer as a retailer so that in-depth testing and market research can be carried out, minimizing the risk associated with launching a brand new product to the market.
- A reduction in overall production time is offered by many manufacturers which means retailers can take advantage of a shorter lead time and faster shipping time. This will not only speedy manufacturing process and saving you a lot of time, but also save you money, since the longer it takes to manufacture a product, the more costlier it will be.
Disadvantages of buying direct from Manufacturers:
- There is always a risk of having the product ideas and concepts stolen when working directly with a manufacturer. However, you can ask to sign a non-disclosure agreement for external companies working on new product ideas to avoid this.
- Supply chain issues can be created in the future by working with one supplier rather than working with a number of manufacturers. You may not have enough finished products to sell if an issue is experienced by the manufacturer that creates a substantial delay in overall production time. However, you can minimize the issues of one supplier from ever putting your business on hold by spreading the risk across a number of suppliers.
- You must consider taking advantage of an established online marketplace instead of working directly with a manufacturer as entrepreneurs, start-ups and SMEs are allowed to compare potential suppliers conveniently in one place without having to spend time meeting each one on an individual level by this type of platform.
Choosing the right Manufacturer for your business:
Few tips to help you find the right manufacturer for your business:
- You need to choose a supplier who can confidently communicate in your native language which helps to avoid any issues caused by miscommunications as a result of the language barrier.
- Consider asking whether they would be willing to offer you free shipping if a manufacturer is charging too much for their services, but would still like to work with them for their experience.
- You must visit the website of a manufacturer to read customer reviews and case studies before placing larger orders.
- Make sure to ask the distributors if they agree to supply smaller quantities or even single quantities when you need to buy, as soon as you start communicating with them. A considerable amount of time can be saved by this when searching for the right manufacturer for your business.
- Always request for a sample to carry out your own quality check if you are looking for a new supplier.
- Free online supplier directories can be used to find new suppliers for your e-commerce business.