IBC TradingSometimes finding a niche just means spotting the gap between supply and demand and providing the missing piece. In the case of IBC Trading, “supply” meant Asian factories in search of m.i. contracts, and “demand” meant Western instrument makers in search of manufacturing partners. The missing piece was someone who knew both well enough to bring them together. Enter Iain Wilson, an Irish m.i. professional who’d logged thousands of hours on the ground in Asia. Over 13 years at the head of International Business Centre, a consulting firm serving Fishman, Parker, Breedlove, G7th, and others, Wilson had visited more than 70 Chinese guitar factories and carried out in-depth research on OEM and retail markets in Asia. When friends in m.i. circles began asking him for help in sourcing, it quickly became more than a side project and grew into a business. Since founding IBC Trading in August 2006, Wilson and his team have invested heavily into onsite work in China, Korea, Japan, Indonesia, and Vietnam.
Linking Western brands with Asian factories
As CEO of IBC Trading, Wilson still travels to Asia every four to six weeks. As he says, “There are not many sourcing companies that are on the ground in Asia every month. As I am also retained as a consultant to manage Fishman China’s OEM operations, this gives us a direct link to factories—knowing who’s good and who’s bad, who has sufficient materials, who can pay their suppliers, etc. Many have tried and failed to do this from a distance.” IBC Trading operation includes a complete quality control setup, based in Asia, that offers services at any level requested by the partner company, from spot checks to point-by-point assessments. A back office team with bases in both Asia and Ireland handles invoicing, shipping, and certification requirements on the partner’s behalf. Along with Wilson, the team is led by Product Manager Dave Ingham, who held previous positions with Ireland-based Lowden Guitars and with several retail outlets. He now trains and oversees the quality control teams, and monitors manufacturing projects in progress. “Our unique selling proposition is that we’re on the ground moving, developing and reacting as things change,” says Wilson.
Now in its eighth year, IBC Trading has developed into much more than a match-maker between music companies and factories. With their broad view of international markets, the team advises companies on designing product and tailoring sales strategies and pricing to a target audience. They help clients avoid pitfalls like the tendency to squeeze every ounce of productivity out of a factory at the expense of excellence in results, says Wilson. “Many customers push factories too far, which results in factories cutting corners—which is ultimately a false economy as it will often lead to inferior quality and come back to bite the customer,” he explains. “We firmly believe that everyone must make money. The factory must be happy, the customer must be satisfied, and somewhere along the line IBCT has to make its margin too.”
Based on Wilson’s experience with Parker, Lowden, and Breedlove, IBC Trading started out with a focus on high-end solid-top and all-solid acoustic guitars. About two years in, though, the economic crash of 2008 sent the company down another path. Demand for high-end product plunged and some customers were left owing large sums of money they couldn’t pay off. “Things were very tough,” says Wilson. “However, we managed to trade our way through the challenge.” Expanding into a wider range of price points, IBC Trading diversified to where it now handles products from the entry level up through the exclusive custom segment. Beyond acoustic, electric, and classical guitars, it’s now involved in sourcing for drums, keyboards, ukuleles, and accessory lines including cases, gigbags, tuners, and stands. “Our goals are simple,” says Wilson: “to be an honest, effective, and competitive sourcing company for as many customers as possible in the m.i. industry. We’ve no limit to the number of customers, suppliers, countries we buy from or supply, and no limit to how big we can grow our team to react to customer requirements.”
As of now, IBC Trading has clients in the U.S., U.K., Canada, Brazil, Germany, Austria, Italy, and elsewhere in Europe. U.S. business is on the upswing after the dog days of the financial crisis, says Wilson, and European business, while still slow, is giving way to some bright spots as well. “Thankfully, if one market suffers, we can put our energies into another territory,” he says. “But it would be nice to see the day when everywhere is pumping again.”
Increasingly, for IBC Trading, the issue at hand is now helping Western companies navigate an Asian manufacturing market in flux. In China especially, swathes of factories have closed down while others have sprung up, says Wilson. Labor costs, materials costs, and exchange rates fluctuate on a daily basis. As Wilson concludes, “The main question every customer has is, ‘Where is next?’ If China becomes too expensive, where do we go—Indonesia, Vietnam, Cambodia, India? This is the million-dollar question right now, and we’re positioning IBCT to be at the core of development in any of these countries.”
Subscribe to The Music Trades today!