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I had to deal with the same issues as well. Protecting the supply-chain is priority one in the industry I used to work for, but the fact is that the internet ex

I had to deal with the same issues as well. Protecting the supply-chain is priority one in the industry I used to work for, but the fact is that the internet exposed the entire industry for the BS protection mechanism it is. What happened is that the distributors decided to go past the suppliers and order direct from China, which they couldn't do even 5 years ago, but the suppliers, if they ever went direct to the end-user, would get tarred by the entire industry. It didn't stop here. End-users would contact the suppliers, who would uphold the honor and refer them to distributors. The end-user would say screw that and order direct from China who couldn't care less about what American companies think. I don't want to specify what industry I used to work in, but that fact is that this old-world ol'boy protectionism is destroying America's ability to re-enter manufacturing. The sick part is that there are entire regulatory bodies protecting the supply chain. Unfortunately, politicians either don't know the truth, or really can't be expected to explain all of this to the general public. Of course, the politicians will be incorrectly blamed for not bringing jobs back to America, but the reality is that this all has to change from within the industries who are destroying themselves.

mgkimsal 14y ago
I'm pretty sure it doesn't even matter the industry you specify - if it involves manufacturing of any sort, I suspect there's a lot more of what you and I are describing going on. The "refer to distributor" model can have its place, but I think those days are numbered for many industries. In many cases, it's just a different person you're ordering from, and an extra day to get your stuff - there's 0 value add. The fact that we can even talk about ordering direct from China - shipping stuff 15,000+ miles over several days, and still getting better value than buying from someone two states away says far more about the state of 'business' than anything else. It's felt to me that for most of my adult working life, 'business' has been far more about cost cutting and offshoring jobs than creating any sort of value - I'm not even sure most 'business' people (with the degrees and years of experience) even understand how to create or measure the value their customers want. Competing on price alone they've been doomed for a generation, and we're continuing to see the unravelling of American business (primarily manufacturing, but it'll happen to other industries too).
- dizzystar 14y ago
  You hit the nail on the head: it is all about VAS and getting squeezed on price, especially in the supplier-distributor model. The end-user will price-shop, but unbeknownst the end-users, all the distributors get their stuff from the same few suppliers. The end-users squeeze the distributors, and the distributors squeeze the suppliers, and it ends up no one makes any money. This then gets compounded because China is raising their prices, and at times, choking off the supply chain completely. After the end-users can't find what they want, they just look online and order direct from China. I've been convinced for quite a while that price-slashing is the ultimate killer. The only advantage US suppliers have at this point is keeping foreign-bought stock locally so that they can deliver in less than a week. End-users are learning very quick, especially with the price of software decreasing, that keeping things in-house is not only more convenient, but cost less too.
stephen_g 14y ago
Happens everywhere. This sort of thing is exactly what is hurting (some would even say killing) the Australian retail sector. You can buy things on eBay from Hong Kong for far less than what you can buy it in shops here - because the shops have to go through several layers of distributors. Even buying from the US can be drastically cheaper - I bought a professional condenser microphone, and even with $80 shipping, it was literally half the price of buying it in stores. The retail industry is up in arms about it, and keep lobbying politicians to reduce the tax-free import threshold from $1000 (which will hardly make a difference), and saying it's the internet's fault - but all the Internet is doing is showing what BS the whole supply chain is. If the shops could buy directly from the supplier, instead of buying from a distributor buying from a wholesaler buying from an importer buying from a US distributor, we wouldn't have this problem.

mgkimsal 14y ago

I'm pretty sure it doesn't even matter the industry you specify - if it involves manufacturing of any sort, I suspect there's a lot more of what you and I are describing going on. The "refer to distributor" model can have its place, but I think those days are numbered for many industries. In many cases, it's just a different person you're ordering from, and an extra day to get your stuff - there's 0 value add. The fact that we can even talk about ordering direct from China - shipping stuff 15,000+ miles over several days, and still getting better value than buying from someone two states away says far more about the state of 'business' than anything else. It's felt to me that for most of my adult working life, 'business' has been far more about cost cutting and offshoring jobs than creating any sort of value - I'm not even sure most 'business' people (with the degrees and years of experience) even understand how to create or measure the value their customers want. Competing on price alone they've been doomed for a generation, and we're continuing to see the unravelling of American business (primarily manufacturing, but it'll happen to other industries too).

dizzystar 14y ago
You hit the nail on the head: it is all about VAS and getting squeezed on price, especially in the supplier-distributor model. The end-user will price-shop, but unbeknownst the end-users, all the distributors get their stuff from the same few suppliers. The end-users squeeze the distributors, and the distributors squeeze the suppliers, and it ends up no one makes any money. This then gets compounded because China is raising their prices, and at times, choking off the supply chain completely. After the end-users can't find what they want, they just look online and order direct from China. I've been convinced for quite a while that price-slashing is the ultimate killer. The only advantage US suppliers have at this point is keeping foreign-bought stock locally so that they can deliver in less than a week. End-users are learning very quick, especially with the price of software decreasing, that keeping things in-house is not only more convenient, but cost less too.

stephen_g 14y ago

Happens everywhere. This sort of thing is exactly what is hurting (some would even say killing) the Australian retail sector. You can buy things on eBay from Hong Kong for far less than what you can buy it in shops here - because the shops have to go through several layers of distributors. Even buying from the US can be drastically cheaper - I bought a professional condenser microphone, and even with $80 shipping, it was literally half the price of buying it in stores. The retail industry is up in arms about it, and keep lobbying politicians to reduce the tax-free import threshold from $1000 (which will hardly make a difference), and saying it's the internet's fault - but all the Internet is doing is showing what BS the whole supply chain is. If the shops could buy directly from the supplier, instead of buying from a distributor buying from a wholesaler buying from an importer buying from a US distributor, we wouldn't have this problem.