When you contact a Chinese supplier, the first question you should ask is: is this a factory or a trading company? The answer affects price, service and flexibility.
1. What is a factory?
A factory manufactures products in its own facility. Advantages:
- Lower price — no middleman markup
- Direct communication with production
- Full control over quality and lead time
- Ability to develop custom products
Disadvantages:
- Limited product range
- Less flexible on packaging or branding
- May lack export experience
2. What is a trading company?
A trading company buys from factories and resells to you. Advantages:
- Wide product range
- Export experience and documentation
- Flexible on small orders and packaging
Disadvantages:
- Higher price — typically 5–15% markup
- Less control over production
- Quality issues harder to resolve
3. How to tell them apart
- Ask for the business license — check the business scope
- Ask for factory photos or a video walkthrough
- Ask for the factory address — is it industrial or office?
- Ask if you can visit or send a third-party auditor
- Compare the product range — factories are usually narrow
4. Which is better for you?
- Large volume, single product — factory
- Small volume, mixed products — trading company
- First-time importer — trading company is easier
- Custom product development — factory
5. The hybrid model
Many successful suppliers are both — a factory with its own export team. This gives you the best of both worlds: factory price with trading company service.
We are a manufacturer and exporter in one. Contact us and we will share our factory details and business license on request.