Manufacturer or Trader

Manufacturer or Trader

As a seller, to do export business, you can work either in a manufacturing factory or a trading company. It doesn’t seem to be different; at least not apparently.
However, the fact is just the opposite!
If you are a buyer, it makes a big difference to buy from a trader than to buy from a manufacturer. Because, what you buy is not only the product, but the service going with the product as well.
If you are a salesperson, working in a factory is completely distinct with working for a trading company. While your bonus is a portion of total sales in a factory, your bonus in a trading company may not even be positive correlated with your total sales.
As a new graduate with business background, it is a big question for you to think over: what type of employer you want to work for?

Standing at your point, below are some main concerns I would like to introduce as a contrast of the two entities:

Product

To talk about the product, we would always first think about the price of a product. You thought that the trader must quote a higher price than a manufacturer, because of the margin. But unfortunately, the truth is again the opposite. Factories will make a marketing strategy a year in advance upon the production plan and sales plan. The price of a product from a factory is relatively fixed. While for a trading company, the price of the product is more flexible. It may float with the demand, the market scarcity, the storage condition and even the relationship between the buyer and seller. Especially when you buy a combination of products, you can always approach a better price from a trader.
After the price part, let’s talk about the number of products. Factories always have a limited number of products. Even though some of the factories would do a little trading business, the listed products are very similar in the same category. But to work in a trading company, you will have to deal with a large number of products. Some of the trading companies do whatever ordered from the customers, while some of the trading companies have their own business focus. In general, the traders have more products than the manufacturers.

Service

Although the full service package can be divided into two parts by the point of selling, pre-sale service and after-sale service, the salesperson of a factory is responsible only for the pre-sale service. A trader may not be able to provide the after-sale service; but the salesperson has to be the coordinator whenever after-sale service is necessary.
In other words, the service can be considered as your workload during the sales job. To work in a trading company, you will take more workload.
However, the workloads get more complicated among the products. If it’s a well standard product, the pre-sale service is just simple as yes or no. But, if it’s an advanced product, like equipments, the pre-sale service could be very complicated and time consuming. Under this situation, to work in a manufacturing company takes more workload.

Personal Development

There is an old Chinese saying ‘Worries will soon appear if one gives no thought on a long-term plan’. As an employee, please always keep your career plan into your mind.
If you are a very self-study person, to work in a trading company will provide you dozens of opportunities. You will learn a lot when you finish a deal step by step. By the time you finish your contract with your employer, you may end up with many potentials. You can switch to a factory if you find yourself very interested on a certain product; you may open your own trading company if you have perfect sales outcome; or you can even be a buyer when you have a very good relationship with your customer.
If you are very dedicated person, to work in a factory can isolate you from the endless product learning process. In the factory, you have only a limited number of products to handle. You can either focus on developing new customers or put more efforts on enlarging revenue from the clients in your hand.
No matter which way you go, please always remember the old Chinese words above and make your plan a little further. More pay for more work; in any case of a salesperson, the sales capability is always one of your key competences.

Risk Management

It is said that the traders will be wiped out by the manufacturers because of the internet. When the importers achieve the direct connect with the manufacturers, there is no space for the traders to be alive.
Yes, it seems logical, but not true. There are many successful trading companies running for several decades. Traders are not just a mid-person, but a service provider for both of the factories and the importers. A good trader can be the probe of factories, pointing out the most profitable products. A good trader can be the representative of importers, saving their money reducing their risks.
However, you do take the risk, to where you want to work!
To work in a factory, you’d better find a promising industry with a good group of products. All the products have a life cycle, so do the industries.
To work for a trader, you’d better find a strong trading company and identify yourself a good focus. You have to dedicate in the area long enough before you are able to find the key point.

To Summarize

It is not easy to answer the question, manufacturer or trader? Manufacturers are mostly sited in the suburban areas providing higher basic salary. Traders are all located in the downtown area, but low starting payment. As a novice player, you really need an internship to find more taste of exporting product from China.