the middlemen

Globalisation has made it a lot easier than it was, say 20 years ago, to order products direct from China. It’s now an option that airlines should seriously consider for certain products.

Years ago, if you wanted to buy from a supplier in China, there was a lot of time and effort involved. You had to go to the library or the Chinese Chamber of Commerce and explain that you wanted to buy or produce. You had to go to China, visit factories and build a relationship.

Verified suppliers

factories…

Now you can find lists of verified suppliers online. With one email you can have an answer about products the next day. Nowadays a lot of Chinese factories have management teams that have studied in the West and speak perfect English. Globalisation and support from the Chinese government have made it possible for factories to go outside of China too.

It’s also helped that a lot of people have realised that manufacturing in China is a lot more straightforward than it once was. To a great extent, stereotypes about poor quality and copying have been dispelled.

A lot of Chinese companies have realised that they can work directly with airlines. They’re more than just a factory base working to tight margins. Rather than being told what to do by trading companies they can go to airlines directly, save airlines money and improve their own profitability.

Benefits of scale

For larger airlines that order a full containerload of products, it can be beneficial to order directly from a factory.

For commodities like cutlery packs, cups or foil containers – things which don’t require an awful lot of design work – an airline can go out to the manufacturer directly and will find those commodities are low-cost. You don’t want to be paying an additional surcharge for using a trader or supplier who is just going to go to the factory, buy the product, stick on a margin and pass it on.

Yes, there is a bit of extra work to be done but the benefit is that you make a significant cost-saving because you don’t have to use a third party to do the business for you. •