How to Tell a Real Chinese Factory from a Trading Company

Half of the suppliers listed on Chinese wholesale platforms are not the manufacturer. They are trading offices — sometimes excellent ones, sometimes a mailbox with a price sheet. The distinction matters less for the label than for the consequences: who controls production, who absorbs a defect, and how much margin sits between you and the machine that made your product.

Here are the checks that actually move the answer, in the order we run them.

1. Read the business licence scope, not the storefront

Every registered Chinese company has a business licence with a stated scope of operations (经营范围). A manufacturer's scope includes production or manufacturing of specific goods. A trader's scope says sales, wholesale, or import & export only. Ask for a photo of the licence and read the scope line before you read anything in the chat.

2. Check whether they hold export rights

A factory that exports directly is registered with Chinese customs and holds the relevant qualifications. If they say export is handled by "a partner company", that partner is the trader — and you are buying through them whether or not the invoice says so.

3. Ask for a VAT special invoice (增值税专用发票)

This is one of the fastest tests. A genuine manufacturer issues a VAT special invoice for the goods it produces. A trading company can issue one too — but only if it bought the goods from somewhere. Ask what the invoice line item says the product is, and compare it with what you are buying. Vague line items like "gifts" or "daily goods" are a signal.

4. Compare the registered address with the factory address

Registered in an office building, shipping from an industrial park two provinces away: possible, but worth understanding. Registered and producing at the same address is the normal pattern for a real factory.

5. Ask for a live video call, walking the floor

Photos are inventory; video is evidence. Ask for a walk-through at a specific time, with your name written on a piece of paper held up to a running line. A factory with nothing to hide will do it in ten minutes. A trader will offer a "visit arranged next week" — which is a trip to the factory they buy from.

6. Ask who owns the moulds

If your product needs tooling, ask where the mould will be registered and who keeps it. A real factory keeps tooling on site and will let you photograph the plates. A trader has to ask someone else — and if you move your order later, the tooling becomes a negotiation.

7. Test technical depth with one hard question

Name a material grade, a tolerance, or a certification requirement specific to your product and see who answers. Factory people answer with a number and a caveat. Middle offices answer with "I will check with our engineer" and come back with a catalogue page.

8. Look at what else they make

A factory's catalogue clusters around what its equipment can do. A trader's catalogue sprawls — massagers, silicone spatulas, car chargers, candles. One supplier covering eight unrelated categories is a sourcing office, and there is nothing wrong with that as long as you know you are paying for the aggregation.

9. Verify the bank account name

Payment should go to an account in the company name on the licence. A personal account, a different company name, or an offshore shell all change your recovery options if something goes wrong.

When a trading company is the better choice

Two situations. First, small mixed orders: a good trader consolidates SKUs from ten factories into one container, which no single factory will do. Second, categories where minimum order quantities are far above your volume. What you should not do is pay a factory price to someone who is not a factory.

What we do with this

Before we put a supplier in front of you, these nine checks are done and written down — including what we could not confirm. That is the whole point of a vetting report: not to sell you confidence, but to tell you exactly how much of it is earned.

See how our factory vetting works, or send us a supplier you are considering and we will check them.