Factory, trader and agent: who are you dealing with?

Many of the “factories” you message are trading companies that buy from factories and resell to you. That is not wrong in itself, but it is wrong not to know which party is in front of you.

Four kinds of party

• Factory: Owns the machines and workers and produces itself.
• Trader: A company that gathers products from several factories and sells them with its own margin.
• Agent or sourcing office: Works for you: searches, follows up and inspects for a commission or fee.
• Subcontractor: Handles one stage of production for another factory.

How to tell

• Ask for the business licence and match its name to the payment account name.
• Ask for a video call from inside the workshop while it is working.
• Ask: what machines do you have? How many workers? Where exactly is this piece produced?
• Compare the registered address with the one they give.

Nothing wrong with a trader

A trader may suit you when you need varied items in small quantities. But know that they are an intermediary, that their margin is inside the price, and that your control over quality passes through them.

Exercise

Pick three suppliers you contacted or found pages for. For each write: factory or trader? What is the evidence? What do you still not know?