Brokers, manufacturer’s agents, and trading companies can save you money if you don’t have the sufficient volume or skill to buy properly directly from the source of supply. A good manufacturer’s agent can assist the buyer in several different ways. For example, he can recommend changes in product or design to reduce cost. In order to do so he must have the necessary experience and technical knowledge. When used in this way, such agents are in effect consultants. The only difference is they are being paid through the commissions they get from the supplier. Therein lies the rub. Can they really be impartial? Some are. Many are not. When you ask a manufacturer’s agent for advice about design, it is best to obtain several opinions and do some careful evaluations on your own to assess the recommendations.

Another way the manufacturer’s agents can help the buyer is by being an effective liaison person between the buyer and seller. A good agent will look after the buyer’s interest if he wants a long-term relationship in the form of continual business. The agent can help by following the buyer’s order to make sure goods are shipped on time. The good agent will let the buyer know when problems develop or when problems are anticipated.

In nearly every situation, the buyer can obtain a lower price and better terms if he or she deals directly with the manufacturer, but in order to do so many manufacturers insist on a large order volume. Even so, you may not get the service or the support you expect.

Buyers find that distributors will stock what they need and that either price premiums are nonexistent or the total cost considering inventory carrying charges is lower. If you have the volume you will usually obtain a better price from the producer, but you will usually need to give a long leadtime and take full delivery when the goods are ready.

Brokers may be defined a little differently than manufacturer’s agents. Generally, the term broker applies to those merchants who will obtain what you need from various sources. Unlike the manufacturer’s agent, the broker may not even have a formal agreement with any one supplier. At a moment’s notice, the broker may obtain the goods from the source that offers him the best deal.

Trading companies are similar to brokers. They operate extensively in the Far East and are a good source for the novice buyer who is interested in foreign sourcing without the necessity for extensive travel, complex transactions, and the need to deal with a foreign language.