The first question in China sourcing is usually "factory or trading company?" — and the honest answer is that both can serve you well, as long as you know which one you're dealing with. The problems start when a trader presents itself as a factory.
Why it matters
A factory makes the boxes: you're talking to the production planner, samples come from their own line, quality control is in their hands, and pricing reflects their costs. A trading company buys from factories: they add a margin, but also add service — multi-product consolidation, English project management, sometimes better responsiveness. Neither is wrong. Hidden markup with factory claims is what's wrong.
How to tell which you're talking to
- Ask the business license scope (manufacturing vs trading appears right on it) and the company's registered address against their claimed facility.
- Ask for a live video factory tour — production floor, machines running. A factory walks you through without rehearsal.
- Ask which processes are in-house vs outsourced. Even real factories outsource some finishing; the answer tells you who controls your critical steps.
- Check whether their product photos show their equipment (consistent machines, same facility across years of posts) or stock imagery.
Evaluating the supplier beyond the factory question
1. Communication quality in the quote itself — did they ask about your product, market, and usage, or just send a number? 2. Sample honesty — will they state plainly what the sample can and can't represent? 3. References or export history in your market; packaging for EU cosmetics buyers is a different discipline than domestic giveaways. 4. Response speed under pressure — anyone answers fast at quotation speed; watch what happens at your first problem.
The verdict we'd give a friend: for a single product line at real volume, buy from a factory that communicates like a partner — you get cost truth and production control. For a scattered multi-product order or a first sourcing trip, a good trader can be worth their margin. And the strongest signal in either case is transparency: suppliers who explain their supply chain don't usually need to hide it.
FAQ
Is buying directly from a factory always cheaper?
Usually lower cost at the same spec — but not always lower *total* cost. A trading company consolidating five products into one shipment can beat five factory shipments on freight and admin. Compare landed, not listed.
Can I verify a factory's certifications myself?
Yes — FSC, ISO, and BSCI certificates list the certified legal entity. Match the name on the certificate to the company on your invoice, letter for letter. Mismatches are the classic sign of borrowed credentials.