Factory or Trading Company: How I Tell Them Apart

The name on a website does not tell you who makes the goods. In one week I can be shown a factory that molds the product, and a trading company that buys the same product two towns away. The price, the minimum, and the person who can fix a defect are different in those two rooms.

What I look at, not what the brochure says

• The machines for this product are on site, and they are running this kind of work. A showroom of finished goods is not a factory.
• The people who can change a logo position or a packing method are in the building, not “at our partner.”
• The company name on the quotation is the company that will appear on the invoice and the export paperwork.
• A live walk-through of the line beats a folder of photos. Photos travel. Lines do not.

When a trading company is the right counterparty

A mixed order out of Yiwu, ten small SKUs, none of them big enough for a factory minimum, is often a trading counter. One invoice, one shipment, several workshops behind it. I will use that structure and tell you that is what it is. I will not call it a factory visit if I only saw a sample room.

A single product you will reorder, with your own packing, belongs with the plant that owns the process. That is true for a flask in Yongkang, a sock in Zhuji, a chair in Anji, a case in Dongguan. The industrial hub guide is the short list of those towns. The audit is what confirms this supplier is actually in that town’s trade, not just quoting it.

If you already have a supplier and you are not sure which kind they are, send me the quotation and the address. I can usually tell from the line, not from the English on the card.

Keep reading

• Alibaba or a China Buyer: What Each One Is For
• Logo, Color, and Packaging: What “Low MOQ” Actually Covers
• What a Pre-Shipment Inspection Covers on Standard Goods