As a practitioner who has been deeply involved in the cross-border jewelry supply chain for many years, I often encounter overseas sellers asking: If I want to find a stainless steel jewelry supplier in China, should I directly contact the factory or cooperate with a trader? There is no standard answer to this question, but the most suitable supply chain model for oneself can be found through four core dimensions: cost, minimum order quantity, technical control, and risk assumption, combined with strategies at different development stages.
Factory Direct Procurement vs. Cooperation with Traders
Take the 316L stainless steel necklace as an example for comparison. The factory price FOB price is $1.8 per piece. For orders over 10,000 pieces, you can enjoy a step discount. You need to solve quality inspection, logistics and compliance issues by yourself. The cooperative quotation for traders is $2.2-$2.5 per piece, including 8-12% service fee. However, it supports a minimum order of 100 pieces, 7-day fast delivery, quality inspection and certification. It can also help solve problems such as logistics.
We believe that factories are suitable for sellers who pursue the ultimate cost and technological depth, while trader cooperation is more appropriate for small and medium-sized sellers
If it is in the start-up stage, one can use the trial and error of traders to explore the way, spend the least amount of money to verify market demand, and avoid generating unsold inventory in order to meet the factory’s minimum order quantity.
During the growth period, a mixed model of direct factory procurement for best-selling products and small-batch trading can be chosen to achieve cost reduction for best-selling products and efficiency improvement for small orders, balancing efficiency and risk.
If the product can be deeply bound to the factory at the mature stage, build its own supply chain, lock in production capacity, control technology and resist competition.
90% of sellers think that purchasing directly from factories must be cheaper. In fact, even if small orders are placed in factories, the unit price may be higher than that of traders. Factories are reluctant to take small orders. In the early stage, it is better to choose traders with factory backgrounds. Such traders usually have deep cooperation with factories, offer prices close to those of factories, and can also provide trade services.
There is no best supplier, only the most suitable partner. The essence of supply chain management is to find a dynamic balance point among cost, efficiency and risk. First, expand your scale through cooperation with traders, and then find suitable factories for deep binding. Only in this way can small and medium-sized sellers develop healthily and steadily.
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