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The short version
- Neither is bad. A factory makes the product; a trading company sources it from factories and handles the selling. Many small buyers do well with traders.
- The strongest check is the business license: the business scope (经营范围) of a maker usually includes words like 生产 (production) or 加工 (processing); a pure trader's scope is mostly 销售 (sales) and 进出口 (import and export).
- Look the company up by its 18-character Unified Social Credit Code (统一社会信用代码) in China's official company registry.
- Then ask questions only a plant can answer, and ask for a live video of the line.
Factory or trading company: why both are normal
A trading company (贸易公司, màoyì gōngsī) buys from factories and sells to you. It may speak better English, accept smaller orders, combine products from several plants into one shipment and handle export paperwork. A factory (工厂, gōngchǎng) controls production and can often change materials, molds and lead times directly.
| Factory | Trading company | |
|---|---|---|
| Price | No middle margin, but may need a higher MOQ | Adds a margin, but may get better prices from plants it buys from often |
| MOQ | Set by the production line | Can combine your order with others or buy stock |
| Changes to the product | Direct | Passed on to the factory |
| Several products in one order | Usually its own range only | Often easy |
| Communication | Varies; often in Chinese | Often in English, used to foreign buyers |
General patterns, not rules. Individual suppliers differ.
What matters is that you know which one you have, so you can ask the right questions and judge the price fairly.
Check 1: the business scope on the license (营业执照 / 经营范围)
Every Chinese company has a business license, 营业执照 (yíngyè zhízhào). Ask for a photo; most suppliers will send it. Look at the business scope, 经营范围 (jīngyíng fànwéi). Words that suggest the company makes things:
| Chinese | Pinyin | English |
|---|---|---|
| 生产 | shēngchǎn | Production, manufacturing |
| 制造 | zhìzào | Manufacturing |
| 加工 | jiāgōng | Processing |
Words that suggest selling only:
| Chinese | Pinyin | English |
|---|---|---|
| 销售 | xiāoshòu | Sales |
| 批发 | pīfā | Wholesale |
| 货物进出口 | huòwù jìnchūkǒu | Import and export of goods |
Example scopes (illustrative, simplified):
| Supplier | Business scope on the license | What it suggests |
|---|---|---|
| A | 生产、加工、销售：箱包、服装辅料 Production, processing and sales of bags and garment accessories | A maker of bags |
| B | 销售：箱包、日用百货；货物进出口 Sales of bags and daily goods; import and export of goods | A trader that sells bags |
Illustrative examples written for this guide, not real companies. A factory often lists sales as well, and some groups run a factory and a separate trading company.
Check 2: look up the registry (统一社会信用代码)
Every license carries an 18-character Unified Social Credit Code, 统一社会信用代码 (tǒngyī shèhuì xìnyòng dàimǎ). Search it, or the company's Chinese name, in the National Enterprise Credit Information Publicity System (gsxt.gov.cn), the official registry. The site is in Chinese; a browser translation is enough. Check that:
- The company name matches the license photo and the name on any invoice.
- The registered address is where they say the factory is (or explains why it is not).
- The business scope matches what you saw on the license.
- The status is active: 存续 (cúnxù) or 在业 (zàiyè), not 注销 (zhùxiāo, deregistered) or 吊销 (diàoxiāo, revoked).
- The founding date fits the history they claim.
Check 3: read the Alibaba profile signals
On Alibaba.com, a supplier's "Business type" (Manufacturer, Trading company, or both) is chosen by the supplier. Give more weight to details checked by a third party, such as the assessment report behind Alibaba Verified Supplier, which can include factory size, production lines and staff.
Check 4: the address
An address in an industrial park, 工业园 (gōngyèyuán) or 工业区 (gōngyèqū), fits a factory. An office tower with a room number fits a trader. Both can be fine; what matters is that the address matches the license and what the supplier tells you.
Check 5: the product range
A factory usually focuses on one family of products made on the same kind of machines. A catalog of dozens of unrelated categories, from phone cases to garden tools, points to a trader. Look at the photos too: the same workshop and machines across many products and years is a good sign; only stock photos tell you little.
Check 6: ask three questions only a plant can answer
These are friendly, normal questions. A factory answers them quickly and in detail. A trader may say it needs to ask, which is honest and fine.
| Chinese | Pinyin | English |
|---|---|---|
| 你们工厂有几条生产线？ | Nǐmen gōngchǎng yǒu jǐ tiáo shēngchǎnxiàn? | How many production lines does your factory have? |
| 这个产品哪些工序是你们自己做的？ | Zhège chǎnpǐn nǎxiē gōngxù shì nǐmen zìjǐ zuò de? | Which production steps for this product do you do in-house? |
| 方便现在视频看一下车间吗？ | Fāngbiàn xiànzài shìpín kàn yíxià chējiān ma? | Could we do a quick video call now to see the workshop? |
For more ready-to-send lines, see how to message a Chinese supplier in Mandarin.
Get a free sourcing quote. Tell us what you want made. We reach out to Chinese factories in Mandarin for you. Requesting a quote is free.
Get a free sourcing quoteCheck 7: the photo and video test
Ask for a short video of your product, or a similar one, being made, with something that shows it is recent (for example, a note with today's date and your company name). A live video call where they walk you through the line is even better. A trader can sometimes arrange this with its factory too, so treat it as a check on the plant, not only on the person you talk to.
Why a trader's price can still be right
A trader adds a margin, but that is not the full story. Traders that buy from the same factories often may get good prices, combine small orders, handle quality follow-up and speak your language. Compare total cost per unit landed at your door, not just the factory price. Our landed cost calculator helps you compare.
When should you pay for a factory audit?
For a first large order, a custom product, or anything with safety rules, an independent audit is worth considering: an inspector visits the plant and checks it is real and capable. Our guide to factory audits in China covers types and published prices. For a small first order of a simple product, the free checks above and a paid sample are often enough.
Let us ask for you
Not sure who you are talking to? Send us what you want made. We reach out to suppliers in Mandarin, ask whether they make it themselves, and email you what they told us. Asking is free.
Get a free sourcing quote
Tell us what you want made. We reach out to Chinese factories in Mandarin for you. Requesting a quote is free. If you want more help after that, we quote the sourcing work first and nothing starts until you agree.
Frequently asked questions
How can I tell if a Chinese supplier is a factory?
Check the business scope on its license for words like 生产 (production) or 加工 (processing), look the company up by its Unified Social Credit Code in the official registry, ask about production lines, and ask for a live video of the workshop.
Is it bad to buy from a trading company in China?
No. Trading companies can offer lower MOQs, several products in one order, English communication and export help. Know which you have so you can compare prices fairly.
What is 经营范围 on a Chinese business license?
经营范围 (jīngyíng fànwéi) is the business scope: the activities the company is registered to do, such as production, processing, sales or import and export.
Where can I look up a Chinese company?
In the National Enterprise Credit Information Publicity System (gsxt.gov.cn), using the 18-character Unified Social Credit Code or the company's Chinese name.
Does Alibaba show if a supplier is a factory?
Alibaba profiles show a business type chosen by the supplier. Third-party checked details, such as Verified Supplier assessment reports, carry more weight.
Can SuanSupply check a supplier for me?
We can reach out to suppliers in Mandarin and pass on what they tell us, including whether they say they make the product. We do not inspect or guarantee suppliers. Requesting a quote is free.
General information as of October 15, 2026, not legal advice. Business scope examples are illustrative. Registry details can lag or be incomplete; use several checks together.