Do you think that you can cut out the middleman to get better prices from the factory?

If they're really cheaper, and it's so easy from them, trade companies wouldn't survive. However, there are ton of them, and that simply implies that they're doing a terrible job.

Selling to a foreign country takes effort:

1. You need English speaking workers, who get paid and receive commission.

Factories often operate by hiring family members, not many of them being qualified, or able to speak English.

We cooperate with a couple of factories, and some of my job responsibilities requires me to communicate with them on a regular basis.

They've repeatedly asked me to help them out with translating for their clients, and teach them on how to sell hair.

Even some of our clients have requested me to be a translator.

2. You pay in USD, we need Chinese Yuan. Payment methods like PayPal are expensive.

Bank transfers are cheaper, but do you think it's easy to receive USD in China?

If done through official means, 13% tax would have to be added to your buy prices, but that increase could simply be a supplier's whole profit margin.

So a lot of "dark stuff" is done, like going through HK banks, or using other companies to "launder" money.

Trade companies generally do better at this, accept more payment methods, than factories.

3. Factories are one-trick ponies.

They mostly produce one type of product.

Do you think that a factory produces both their bundles and your lace products?

Think again.

A factory who produces bundles, would often outsource the hand-tying bit, so even they end up being the middleman.

4. We get better prices than you.

You order a 100 bundles from us, we have multiple clients like this and could order a 1000 bundles from the manufacturer.

We're buying bigger quantities than you could, and thus get better prices.

Not only this, we're picking up our own hair, pay them in the currency they need, require very little service, have very few complaints, and order regularly.

So we can basically offer competitive pricing compared to the manufacturer directly.

A manufacturer might give better prices for your large order, but then again, so can we.

If we're really desperate to get an order, we could "cooperate" with the manufacturer and share profits to get larger orders.

And also, while you might sometimes feel that you develop a relationship with your manufacturer, we still attend birthday or social parties with them and their children, and sometimes even end up going on holidays together.

Our relationships are a bit more personal, and could give us some benefits.

5. Many clients have difficulty accepting an MOQ of 10 bundles.

Well, manufacturers are worse and don't really care about 10 bundle orders mostly.

Some of our manufacturers aren't particularly happy if we order under 50 bundles, and tend to give us some pricing advantages starting at a 100 bundles.

And remember, that's with us picking up the hair ourselves, and paying them in the local currency.

"Simply cut out the middleman and get better prices." It really isn't that simple.

Technically, as a business person, you're already a middleman, with a larger profit margin than your Asian middleman.

For clients it's more profitable to cut you out, than the Asian middleman.

That's why it's definitely better to offer some services than the person selling it to you, couldn't offer.

Basically you want to find someone who can get you what you need, at the right price.

Manufacturers tend to refuse small orders, and are better at larger orders.

But then again, when you have the ability to place large orders, you would look for a greater variety of products, which a single manufacturer wouldn't produce.

A trade company would do better at this.

For example, for one of our clients who mostly sells to the Eurasian market, needs customized toppers, customized wigs, tape-in, hand-tied extensions, and regular machine-wefts.

The variety in colors is large. Basically what we need to put together for them, is a supply line for a whole variety of products.

We get the hair from one place, have it colored in another, then send it in to the right place for either having the items hand-tied to lace products, or another place who makes tape-ins, while the machine wefts could be created by the place who supplied us the hair.

There's a lot of work in the logistics behind these products being made, which a single manufacturer couldn't do.