Trading Company VS Factory in China-Jingsourcing

4 Reasons Why Trading Companies Are Better than Manufacturers

Most people who want to import certain products from china, they will always say “I want to find the factory”, because they think factory offer lowest price. This is not always true. Sometimes, a trading company offers cheaper price than factories. Buying from factories also has various other troubles such as quality issue and late delivery.

In China, trading companies are sometimes more popular than factories, that’s why the number of trading companies is times more than that of factories. IKEA, Walmart and other large customers are also supplied by various trading companies. Li & Fund Ltd, a well-known Hong Kong Company is one of the most successful trading companies, and serves countless international groups in different industries.

Trading companies offer professional and better service, and I’m going to introduce its advantages in following 4 reasons.

1. Trading Companies Are Easier to Communicate with

Sales from trading companies tend to have higher and better English understanding and communication level as compared to those of factories. Thus, they won’t get problems in communicating with customer. They also reply customer’s emails in time. If there is any problem in production, shipping, or inspection, trading company’s sales always notify customer at first time.

Many middle or small-scale factories tend to put more emphasis on production, and with cooperation with local trading companies. Those factories may also have foreign trade sales, but they are not good in communicating in English and are usually slow to reply to customer’s email (Chinese mostly use QQ and phones for daily contacts and rarely use email). In addition, most qualified sales prefer working at trading companies because that’s where they get more working experience.

For instance, our factory supplier for kids’toy helmet, is the best among the suppliers of this product in China. Although they also have foreign trade sales, they spend over 90% of their time dealing with trading companies. Thus replies to inquiries at Alibaba may take two to three days, and others don’t even get replied.

trading companies VS manufacturers difference

2.Trading Companies Have More Product Choices

Every single product supplied by a trading companies usually gets many factory suppliers, thus there are more designs and types. Even for just one item, the trading companies may offer products in different qualities according to customers’ requests.

Factory usually specializes in one product, which lead to great limitation, they cannot offer you many choices.

For instance, if you do cup’s business and you choose a trading company, you will get the choices of materials such as stainless steel, plastic, and glass, or cups suit for kids, sport, teens, etc. If you choose a factory, you will have to contact 5 to 10 of them because you will be getting only one choice from each.


3.Trading Companies Have Smaller MOQ

The MOQ of trading companies is usually small, but they are also able to serve well both small and large businesses. Even for small orders, quality is strictly controlled.

The MOQ of factories is much higher, so they prefer to customers who can place large orders such as one container for just one single item. For small orders, they prefer taking them from trading companies,so that can save the time of complicated communication with foreign customers. They can just delivery goods to trading company, which usually place orders to them.


4.Trading Companies Are Safer to Cooperate with

Trading companies choose their suppliers carefully. They tend to choose stable factories that produce good quality goods so that they can enter in to long term cooperation.

If a customer has an issue with the quality of the product, the trading company will be readily available and willing to help, and if necessary they will ensure that you get part refund from factory. Because it is the trading company that brings business to the factory, so factory have to satisfy the request of the former.

If you don’t usually buy large quantity from factory, when quality issues arise they will not readily help the way a trading company does.

The following tips may be helpful for those who prefer buying from factories:

  • You specialize in just one product type and you just need that from one supplier.
  • You are familiar with factories based in the local or some other cities and you can easily find them. Because finding factories is sometimes challenging even for native Chinese. You better focus on the selection of the various products that trading companies offer instead of spending too much precious time finding factories.

No Comments

  1. Nadalee November 19, 2015 at 11:21 am - Reply

    Most time I don’t even know I’m dealing with a trading company or factory, how can I distinguish them?

    • Zhu Jing December 1, 2015 at 4:21 pm - Reply

      If you are searching suppliers on Alibaba, it really very difficult to distinguish whether they are trading companies or factories.Almost every supplier put many factory pictures on their website and say they are factories, but do not believe them easily as it’s very easy to search these pictures on internet then put them on Alibaba.

      The best way is come to China and have a visit, then you will know the truth. But since not everyone can do this, I suggest you to check in following aspects:
      1. trading company has more kinds of products, much more than factory as factory usually only specializes in one or several kinds of products.
      2. Factory’s saleperson knows better about the product process than trading company’s salesperson, because their daily work are in factory and usually go to the workshop.

  2. Kelly November 19, 2015 at 3:11 pm - Reply

    We are a factory ,we also supplier 3 kind of products : Plastic 3d red cyan glasses , Circular polarized 3d glasses , Mobile Phone 3d glasses ,Mobile Phone Screen Magnifier

  3. Farooq Jhilee November 24, 2015 at 2:13 pm - Reply

    I’m just wondering whether the trading company can offer less MOQ than factory if I want products with my own label and logo?

    • Zhu Jing December 1, 2015 at 3:58 pm - Reply

      Hi. It’s an interesting question. Let’s say towel factory has MOQ 50k to print your logo, but you only need 10k.

      1. Trading company will use tag or opp bag with your logo, which can easily get from packaging suppliers as less as 2-3k, and ask factory or some workers to add the tag/packaging. However factory wont spend time for your solution.

      2. when trading company get your 10k order, maybe they have 30k/40k order of other customers at same time, then you will get 50k price for just ordering 10k towels. However factory probably offer you very high price, or even don’t sell you, because processing small orders takes too much time for them.

  4. Nikolev December 2, 2015 at 4:24 pm - Reply

    Is there any trading company which is opened by foreigners who lives in China?

    • Zhu Jing December 3, 2015 at 12:31 am - Reply

      Hi. Nikolev.
      Sure there are lots foreigners running their own trading companies in China, most in Shenzhen, Guangzhou, Shanghai and Yiwu. However it’s not likely to find them on, because they are doing quite different business from Chinese trading companies do.

      Most Chinese trading companies selling products to customers from any countries, as more as possible. But foreigners own trading companies in China are buying products here, and they work more like a procurement department. Usually they have stable customers already.

  5. vicky January 12, 2016 at 1:15 am - Reply

    I dont believe that buying goods from Trading company is more safer,cheaper fastest and small MOG. its all big Bullshit.

    I am still staying in China for 14 years and dealing 90 % from Factories. Factories give you better price, bettter quality, better packing and also small MOG and if there is any problem in quality they even pay you the claims ans NOT like TRADSING Companies which are mostly Thieves and NOT Sincere.

    Buyers if want to buy goods from China Should buy through an Agent who would be responsible for the goods as the Agent will throughly Inspect the goods and shipped it.

    Dont ever pay Deposit Money to Unknown Trading Company as they May have Boguss Company where thet will run away with your depost money, But Factories Cant do that as they are big and well known.


  6. Christine January 12, 2016 at 5:27 am - Reply

    I am looking for good tubular mesh bags PE in a good price . But I am svared ti order in start 1container ,I would like to order less then container.
    If is not the best place where search sellers.
    Where I can else find mesh bag sellers from China.


    • Zhu Jing January 12, 2016 at 5:38 pm - Reply

      For Tubular mesh bag, there will be plenty suppliers in, and I think there will be no other place to source the supplier other than Alibaba for this item. Most suppliers on Alibaba for this item will be trading companies, because most factories of this item are targeting the domestic market in China. Anyway you are worthy to try to find some suppliers on Alibaba, and my colleague will also help you look for the factory, and reply you quote from factory. It’s totally free service.

  7. Hemasiri.Dias(Dhulna Cosmetic) January 31, 2016 at 11:55 am - Reply


    How can I find a good trading company supplying beauty & hair salon furniture, equipments & accessories in small quantities
    in China

  8. Deuel July 22, 2016 at 8:32 pm - Reply

    Hi, i wanted to start my bag and shoes business but mostly i find in alibaba has high moq and i cannot afford that since i am just starting and also i wanted to have my own label. Others they are offering low price but very high shipping and others high price for items but low shipping and with that i am confused which is real since my order quantity and the items are just the same. Can you help me find suppliers? Thanks

  9. segio October 11, 2016 at 2:26 pm - Reply

    Just google this, sue a chinese trading company in usa. just google this, sue chinese company in usa

Leave A Comment