Buying from China, Should you choose a factory or a trading company?


If you want to buy good quality products at reasonable prices from China, should you choose a trading company or a factory?

Whether it is a factory or a trading company, if it is a reliable supplier, there may be a slight difference in the price of the product, but you will end up with a quality product. However, if the selected supplier is not reliable, then you run the risk of being cheated: you pay money, and you get disaster. Therefore, the most important factor in selecting suppliers is “reliability”.

If you have determined that your supplier is reliable, then you can choose the factory or trading company from the following aspects.

Product Price

Usually, the price quoted by the factory is slightly lower than that of the trading company, mostly cheaper than that of small trading companies, but it's not absolute. Some trading companies ship a lot every year. They have a more advantage in negotiating with the factory. Therefore, such trading companies will also offer lower prices.

If your purchase amount is large, you can negotiate with the factory directly and get a better price. If your purchase volume is small, the price is not significantly affected by choice of factory or trading company.

Communication efficiency

Usually, we think it is more efficient to communicate with the factory directly and avoid the intervention of a third party. The reality is not quite like this. Efficiency is high only when communicating with more massive, better-staffed factories.

In most cases, what determines whether a communication is smooth depends on who you talk to, and not whether it's a trading company or a factory. Most factories are situated in remote towns where it is often difficult to recruit high-quality sales personnel. It is challenging to communicate with such factories. 

Many trading companies are located in the prosperous big cities, where they can gather more excellent talents and have a significant advantage in communication.

Whether it's a factory or a trading company, an experienced supplier with long working experience will understand the needs of customers. Communication and cooperation with such a supplier will be very smooth because he recognizes you.

Whether the supplier is a factory or a trading company, it will be efficient, smooth and comfortable to communicate and cooperate with serious and responsible people. If you talk and collaborate with careless and irresponsible people, you will be distorted and disputed when something goes wrong. It is very nerve-racking to meet such a supplier.

Therefore, sometimes we should not care too much about the type of company. We should find honest, reliable and responsible suppliers to cooperate with.

Whether the product variety is abundant

There are a few kinds of products in the factory. A factory usually produces only three or five products, while some factories even produce only one product. If you don't have many types of purchases or a large number of purchases for each product, there's no problem working directly with the manufacturing plant. But if you have a large variety of purchases and a small number of products, it will take a lot of effort to find all the factories for these products.

Trading companies have abundant products, and their sales staffs are familiar with each product, and they will cooperate with multiple suppliers for each product. Choosing such a trading company, you can buy all the products you need in one stop.

Continuous supply capacity

The Chinese government's environmental protection inspection is very strict now. The factory you choose may stop production for several months or even six months to a year at any time because of the inspection. In this case, you have to find a new supplier. If you like to cooperate with the factory in the current environment, it is advisable that you contact more alternative factories to deal with when in this unexpected situations.

Trading companies are better able to continue supplying because they work with many factories at the same time. If your partner is a trading company, then your worries will be less, and your suppliers will try their best to solve the problem on your behalf.  When the market seems very tight, every supplier will be out of stock, but the trading company will be in a better position.

Quality Guarantee

Every factory has its quality inspection department to ensure the quality of their products. Cooperate with the factory directly, and their quality inspection department is the guarantee of your products. If you choose to cooperate with a trading company, and the trading company you decide to collaborate with seems more reliable, then your product will add a layer of security - trade company quality inspectors.

Before I came to BoboChem, I was still doing quality consulting. I remember having the opportunity to visit a quick-frozen vegetable factory and there I was able to chat with Mr. Lai of the quality department of the factory after work, his response was that he was very busy these days because often, a trading company would come to the factory to inspect the goods, and that he is responsible for the reception. 

I asked him if there was a difference between a worker's job in the presence of a surveyor or a non-surveyor. He said yes. 

Some of the products are not too bad in quality and can be passed or not passed. If the inspection is not in place, it is directly added to the qualified products. If the inspection is in place, it will be picked out.

For more about quality assurance, please read the article "How to go to the factory for inspection before shipment?"

Are the products sold by the factory theirs?

China's environmental inspections are getting tougher. In such an environment, almost every factory has the situation of being stopped during production for inspection. There is often a shortage of goods produced by the factory. So, to meet their sales needs, they also buy products from other factories and then sell them.

There are also suppliers who produce a small number of products or rent a single factory to work in but sell a large number of products. Most of the products sold by them are purchased from other factories.

Under what circumstances should I choose the factory?

If you need a small variety of products and a large number of single products purchased, it is recommended that you choose the manufacturer that produces this product directly. This is because of a significant amount of your purchase; you can get the attention of the factory and get a reasonable price and relatively good service.

At the same time, for the environmental reasons mentioned above, it is recommended that you contact multiple factories at the same time to deal with the sudden inability of your supplier to supply.

When do you choose a trading company?

If you buy a wide variety of products and not a large quantity of each product, it is uneasy to find all the manufacturers of these products, and it is more critical to locate all the high-quality manufacturers. In this case, working with a professional trading company is an ideal. 

For more information on trading companies' cooperation, please read the article "Under what circumstances do you need a trading company to help you purchase?"

It's the right type of supplier to choose, and it's just the customer's preference. If the price is within the acceptable range, don't care too much whether it is a trading company or a factory. Choose a reputable and reliable supplier.

For more information on how to choose reliable suppliers, see another article "How to confirm whether a Chinese supplier is reliable?"