As a buyer of manufactured goods in China, how many suppliers do you use for production? Have you ever considered your supplier development strategy? Or, maybe you don’t really have a strategy for developing suppliers. If you’re accustomed to utilizing multiple suppliers, satisfied by the benefits of their price competition in the past, are you still playing the same game in China today? Do you want to enjoy the streamlined communication and relative simplicity offered by using a single supplier?

Utilizing a single supplier occurs for one of two basic reasons. The first reason we typically call “sole source procurement,” meaning we have no other choice but to buy from a lone supplier. The second is referred to as “single source procurement,” which occurs if your company voluntarily decides to buy from only one supplier. For example, by choosing to purchase only Dell computers, Dell becomes your single source by choice. However, unlike those who sole-source, you and your company have the choice to switch suppliers. To do so not only involves a material price consideration, but also a consideration for overall leverage for aspects like quality, service, and marketing strategies.

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