FEaTuRE Sourcing & Procurement
t began with silk. Since Ancient “[Now it’s more about] the value-added
I
China, middlemen were often space that the agent can fulfill.”
the only ones who would walk
Odd Man
Amazon.com officially merged with
the Silk Road, carrying with Joyo.com in August of 2004, creating
them goods and ideas. The Amazon.cn, and has since been operating
long, often treacherous route prohibited
many companies from making the jour-
ney directly, thus allowing traders that
Out
as its own entity in China, separate from
the U.S. office. Wang says that nearly half
of their purchases are still made through
did cross the borders to build a lucrative third parties, either trading companies,
n Charlene Ruan
business. This function of the middle- distributors or otherwise, but that it is
man has persisted into modern business likely to change in the future.
With the advancement of
practices, and has since been a mainstay Referring to the elimination of the tra-
the internet and China-
for international companies working in ditional agent completely, Wang says, “It’s
savvy companies, do
the domestic Chinese market. But things not a question of ‘if ’, but when. Eventu-
trading agents still have
may be changing. ally it will happen as a force of the mar-
a place here?
Hanhua Wang, President of Joyo Ama- ket, and the internet will facilitate that.”
zon, recognizes that the role of the stead- With the rise of sites like Alibaba and
fast middleman is shifting, or even be- Global Sources, the World Wide Web not
coming extinct. With margins becoming
more and more transparent and end users
It’s not a
only gives anyone and everyone direct ac-
cess to manufacturers, but it also allows
increasingly seeking direct contact with
question
for information and communication to be
manufacturers, the international trading passed freely. Quotes are easily requested
community is seeing a shift of dynamics
of ‘if’, but
and logisitcs more efficiently managed.
in the way things have traditionally oper- Fall of the Agent?
ated. The change is bringing to question when. Traditionally, middlemen existed solely
the sustainability of trading companies based on their ability to acquire specific
and the agents who exist to serve them. goods at specific price points. Sometimes
“When information was unbalanced
Hanhua Wang
it was just a simple matter of making in-
and logistics were underdeveloped, the
Joyo Amazon
troductions and getting a percentage of
middleman played a very important role the invoice. Now that role has all but
[in facilitating each trade],” says Wang. disappeared. Buyers are more interested
36 MARCH/APRIL 2010 www.supplychains.com
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