Retail warned over buying direct from China
Posted: April 24, 2008
Dominic Hawes, MD of BMC Intimate, one of the UK’s leading adult goods distributors, has warned retail that buying direct from China will have far-reaching consequences for the industry.
“I can only imagine that the reason small retailers are looking to buy from China is price,” he said. “We all know that products are cheaper in China than they are in the UK. But, let’s not forget that UK prices support a supply-chain infrastructure from the Far East to the UK that delivers services which are hard to put a price on.”
Hawes cited examples such as the ability to get goods delivered within 24 hours, free delivery on orders over a nominal value, the ability to return faulty products, credit facilities, quality control, legal accountability, original designs and free high quality images.
He continued: “Large parts of this industry neither respect nor see value in the wholesalers that serve them – to their detriment. Every industry needs structure and every part of that structure must deliver value, or it ceases to exist. If you don’t utilise the value that experts like BMC Intimate can provide you, or you’re not prepared to pay for the expertise, independent companies like mine will simply not be here. Then, you’ll end up having to buy direct or worse still, from companies that compete directly with you for your customers’ money.
“I am a realist and I understand that manufacturers and retailers both want to disintermediate wholesalers. On paper, it’s always a good idea but reality is never as simple as that. The really smart retailers we work with source product from multiple channels and we even help them source direct from the Far East if we can. But, it’s not an easy road, so beware.”
Addressing the issue of why Chinese factories are now willing to sell direct to retailers, bypassing their distributors, Hawes said: “They’ve learnt enough from us now and they know retailers are less fussy about what they buy. When you buy from China, you take all the risk. Educate them enough about your retail businesses and you’ll soon be breeding a whole new class of competitors who really can wipe the floor with you on price.
“Ignore independent suppliers and take the flight to Shenzhen at your peril. If enough of you do it, you may have no choice over who your local supplier is, just like it was before companies like mine were founded to offer you choice.”