Every importer wants “Direct Factory Pricing.” But on platforms like Alibaba and Global Sources, the line between a Manufacturer and a Trading Company is deliberately blurred.
A Trading Company isn’t necessarily bad—they offer lower MOQs and better English service. But if your goal is to secure the lowest unit cost and control the production IP, you need a real factory.
Here is the technical guide to finding, verifying, and buying from the source.
1. The “Product Niche” Test
The fastest way to spot a fake factory is to look at their product catalog.
- Real Factories are specialists. They invest millions in machinery for one material or process.
- Example: A factory makes Silicone Phone Cases, Silicone Kitchen Mats, and Silicone Baby Bibs. (Material: Silicone).
- Trading Companies are generalists. They chase trends.
- Example: They sell Phone Cases, USB Cables, Bluetooth Speakers, and Selfie Rings. (Category: Electronics).
The Rule: If a supplier sells plastic injection parts and textiles and electronics, they are a middleman. Machines don’t switch industries; traders do.
2. Decode the Business License (The “Scope” Check)
You don’t need to read Chinese to check a license. You just need to ask for a copy of their Business License and look at the “Business Scope” .
- Look for: “Production” , “Manufacturing”, or “Processing” .
- Red Flags: If the scope only lists “Wholesale” , “Sales” , or “Technology Development”, they are an office, not a factory.
Pro Tip: Many trading companies have “Industry & Trade” in their name. This usually means they have a small workshop but outsource 90% of orders.
3. Communication: Factories Speak “Tech,” Not “Sales”
When you contact a real factory direct, do not expect a polished sales pitch.
- The Experience: Factory sales reps are often slower to reply and have broken English. They care about specs, molds, and volume.
- The Test: Ask a technical question.
- Ask: “What is the shrinkage rate of this material after cooling?” or “Can you adjust the injection pressure to reduce flash?”
- Result: A factory engineer knows the answer. A trader will say, “Let me check with the production team” (because they have to call the real factory).
4. The “Live Video” Verification
Photos can be faked. Photoshop is cheap. Do not rely on the “Factory Tour” photos on their website.
The Tactic: Ask for a WeChat or WhatsApp video call during China business hours.
“Can you walk onto the production floor right now and show me the machine making [Product Type]?”
If they make excuses (” The boss has the keys,” “Production is in a different building far away,” “It is unsafe”), hang up. A real factory owner is proud to show you their machines running.
5. When NOT to Buy Direct
Going direct is not always the winning move. You should stick to a Trading Company or Sourcing Agent if:
- Your Volume is Low: Factories have high MOQs (often 1,000+ units). They will ignore you if you want 50 units.
- You Need Multiple Products: If you are sourcing a “Gift Box” with a pen, a notebook, and a mug, a factory cannot help you. They only make the notebook. You need a trader to bundle them.
- You Need DDP Shipping: Factories rarely have export licenses or logistics teams to handle customs clearance in your country. They usually only sell EXW (Ex Works) or FOB.
Conclusion: Value vs. Headache
Buying direct saves you 15-30% on the unit price, but it costs you more in project management time. You become the project manager. You handle the QC. You handle the logistics.
If you are ready to take on that workload, start by auditing the business license. If you want the “Easy Button,” stick to a verified agent.
