China is a hub of manufacturing and trading activities, with numerous companies operating in various industries. It can be difficult for businesses looking to source products from China to differentiate between real manufacturers and trading companies. In this article, we will explore how to identify a real manufacturer or a trading company in China.
A real manufacturer is a company that produces goods and sells them directly to customers or distributors. On the other hand, a trading company is a business that acts as a middleman between the manufacturer and the buyer. They purchase products from the manufacturer and then sell them to customers or distributors at a markup.
Here are 7 tips on how to differentiate between a real manufacturer and a trading company in China:
- Visit the factory:
One of the most effective ways to determine whether a company is a real manufacturer or a trading company is to visit their factory. A real manufacturer will have a production facility where they manufacture their products. On the other hand, a trading company may not have a factory, and they will usually take you to a third-party factory to produce your products. One of the features is the trading company may have a beautiful Samples Show Room to attract foreign customers to visit. - Check the business license:
All companies in China are required to have a business license. You can verify the authenticity of the business license by checking the company's registration number and the scope of their business. A real manufacturer will have a license that allows them to engage in manufacturing activities. Extra tips: you could compare the name if it is the same as the one on license, and the license name is usually showing at the front door of the factory. - Look for certifications:
Manufacturers in China must comply with certain standards and regulations, and they may have certifications to prove their compliance. For instance, a real manufacturer of electronics may have ISO 9001 or ISO 14001 certification. You can verify the validity of these certifications on the relevant certification bodies' websites. - Check the product range:
A real manufacturer will usually specialize in a specific product range. For instance, a factory that produces shoes will not produce electronics. On the other hand, a trading company may offer a wide range of products from different industries. - Ask for samples:
Asking for product samples is a great way to determine whether you are dealing with a real manufacturer or a trading company. A real manufacturer will usually have a wide range of samples available, and they will be able to provide you with detailed information about the product. - Check the price:
Trading companies usually charge higher prices than manufacturers, as they add a markup to the products they sell. If the price you are quoted is significantly higher than the market price, it may be a sign that you are dealing with a trading company. However, some trading company has share in the factory so they could have very competitive price. - Hire a person in China or ask for help from your friend who is Chinese to accompany you in visiting the factory, or asking for further information about whether this company is trading or a manufacturer.
In conclusion, identifying a real manufacturer or a trading company in China can be challenging, but it is essential to ensure that you are getting the best quality products at the best price. By following these tips, you will be able to identify a real manufacturer and avoid the middlemen who may not have your best interests at heart.
However in another word, if the trading company has strong design skills and trends products at reasonable prices, please also consider them so as to save you a lot of energy and be less time-consuming. Because time and efficiency are also money!
Thank you for your reading!