The moment when a company decides to import its products is, without a doubt, a turning point in its commercial experience. International purchases change everything from cost optimization to warehouse operation.
The problem however, begins when a company decides to import but it is not clear which actors will help it or participate in the process. Having questions about importing is very common, but the obstacles begin when we don’t know how to solve them.
For this reason, and taking into account the confusion that we usually see in many of our clients, we believe it is useful to write a post to clarify the main differences between suppliers, distributors and purchasing agents.
Suppliers (or manufacturers).
It is a commonly held belief that buying products directly from a supplier will lead to cost saving and there is undoubtedly some truth in this.
In addition to the manufacturer’s broad profit margin, availability is also an added value: the supplier will usually always have a stock of the products it produces.
The supplier is exclusively dedicated to manufacturing products for those who need it. In this sense, if we purchase directly from a supplier, intermediaries are eliminated, and as a consequence, the price improves (taking into account the quantity purchased, of course), despite assuming certain risks such as communication problems (cultural and/or language), of quality standards or even transport.
Distributors
This is the option chosen by some companies who, despite not having enough import experience, do not understand the key role of an international purchasing agent (or do not want to pay for their services).
Distributors are those companies that are authorized to distribute a product. A distributor is an intermediary between the manufacturer and the end customer.
The distributor has the capacity to negotiate with the factory and get a good price for the product imported. Distributors often work by zones, allowing them to get to know suppliers well and establish good business relationships.
Among the advantages that a distributor can bring, is more fluid communication (if we compare it to dealing directly with the manufacturers) and the fact that the distributor is responsible (or should be) for the appropriate delivery of imported products.
Purchasing Agent
The agent or consultant is the key to making the sourcing process a success. And no, we aren’t JUST saying it. Many of our clients are companies whose previous experience with direct importation from manufacturers or distributors has resulted in a disappointing outcome; defective products, lengthy delivery delays, regulatory problems, etc.
In the face of these difficulties, there are many companies who understand that, when making international purchases, a sourcing partner is necessary. This figure not only acts as an intermediary between the company and the supplier, but watches over the entire business process, answering questions, anticipating problems and, of course, closely following the evolution of the imports.
It is the task of the purchasing consultant to find the right supplier, the best price and the optimal conditions for every aspect of the importation process. From reviewing quality standards of the articles to knowing in detail what procedure must take place to import each type of product according to its specifications. In short: a purchasing agent creates a sourcing strategy suitable for each client and carries it out.
At S3 Group we have been acting as a sourcing partner for more than 15 years for many different companies from all over Europe who choose to buy products from Asia. Experience has taught us that to import industrial products and to make it a simple and trustworthy process, the figure of a purchasing agent, who speaks your language and watches over your interests, is essential for the importation process to be successful.