Why Buyers Prefer Direct Sourcing Over Intermediaries in Agro Commodities

Sourcing agro commodities for importers could become a complicated process in the market. Between importer and the exporter, traditional intermediaries such as local markets, middle man, commission agents etc, creates hindrance and elevates the communication gap further. 

Thus, in a recent trend, Buyers have started to prefer direct sourcing over these intermediaries to avoid delays, miscommunication, and unfair agent commission. This has become possible due to the online agro commodities platforms, offering verified buyers/sellers reliable and smoother means to connect. 

Such digital agro-commodity platforms have eased the manner in which import export business is being processed. Let’s have a detailed outlook at the different reasons buyers prefer direct sourcing over intermediaries in the Agro Commodities.

Direct Communication between buyer and seller

Bridging the communication gap between a buyer and a seller enhances their chances of securing a fair deal. With an intermediary or commission agent, the import/export process could get complicated, entangling both parties in a never ending discussion, assumption and dissatisfaction.  Thus direct communication between these two parties, looking to trade agro commodities, leads to transparency and clear understanding of what is going on in reality.

• Fact: Recent study indicates that direct sourcing of products from the farm to business, improved the efficiency, leading to decline in order errors or miscommunication. 

Better Negotiation 

A buyer or a seller is dependent on the negotiations to complete a fair deal, and an intermediary in-between leads to suspicion. Direct negotiation between a buyer and a seller eliminates several friction points, enabling better negotiation power for both the parties. 

Hence, a buyer prefers directly to the seller, enabling both parties a more transparent environment for processing their trade. 

• Fact: As per a survey conducted, use of AI in the negotiation process has risen sharply in companies, up to 96%, to improve clarity and speed.

No Intermediary Commision (Cost Efficiency)

Cost efficiency due to no involvement of an intermediary or commission agent is itself lucrative enough for the trader. A trader is always in a hurry to close the deal, from end to end, and this could lead to an intermediary misusing the opportunity to leverage their commission fee. 

This unfair practice simply leads to mistrust between the buyer and agent, making the whole trading process tiring and frustrating for both parties. 

• Fact: eliminating the intermediary resulted in a 10% drop in price of fruits in a local market, as study suggests. That’s an incredible news report for traders, and will encourage more future pilot project study’s to check improvement in overall trade efficiency. 

Better control over Product Quality

A buyer’s trust hangs on the intermediary to deliver a quality product, and it is a big problem to deal with. Commission agents have their reasons, leading to conflicting interest, which in turn could cause unexpected output for traders. Thus, direct communication between the buyer and the seller eliminates such probabilities. 

• Fact: A 30% drop in rejection of products due to quality issues, as report (study) shows, further strengthening the belief that the direct buyer to seller communication leads to better results for traders.

Timely Delivery

Efficiency in delivery duration is one of the major benefits for agro traders while executing the deal, as intermediaries cause unwanted communication gaps. This is why a trader wants to communicate directly with the seller, to ensure a timely delivery of their product, without letting any intermediary hinder the process. Buyers often prefer direct sourcing in agro commodities to reduce costs, ensure better quality control, and build stronger supplier relationships. It eliminates intermediary margins, allows for transparent transactions, and provides more control over logistics and product standards, enhancing efficiency and profitability in the supply chain.

• Fact: When it comes to timely deliveries, use of blockchain-powered end-to-end tracking has resulted in 15-25% improvement in delivery time. 

Stable Supply Chain

Buyers prefer direct sourcing over intermediaries due to the long-term partnership they can foster by communicating directly with the seller. Thus, it ensures less chances of supply disruptions in future. 

• Fact: A report from a reputed consultancy suggested a massive shift in the use of IoT in the precision agri in India, leading to 50% increase from 2022, to 300 million in 2024. 

Customisation

Direct sourcing also enables fulfilment of tailor made demands of buyers, effective communication leads to evolution of business understanding for both.

• Fact: 75% of companies in the world are planning to improve data analytics and reporting in 2024. This study approves of companies looking to enable customised and specified driven sourcing. 

Conclusion

Why buyers prefer direct sourcing, jumping past commission agents, because of the hindrance, mistrust, delays, unfair trade practices, elevated commission that hurts their business sentiments. Avoiding these avoidable factors results in improved trade experience, efficient pricing, timely delivery of the product, effective communication, etc.

Online agro commodity platforms such as tradologies provide a trustworthy and reliable environment to conduct agro commodity trade worldwide, making importers/exporters life easier to a whole different level.