--- title: Factory or Trading Company? 8 Ways to Tell | China Agent description: Is your Chinese supplier a real factory or a trading company? 8 ways to tell before you order, from the business scope to the production address. --- [Skip to content](https://www.china-agent.com/blog/real-factory-or-trading-company#main-content) [![China Agent](https://www.china-agent.com/hs-fs/hubfs/china-agent-180-1.png?width=60&height=60&name=china-agent-180-1.png "China Agent")](https://www.china-agent.com/) - [Home](https://www.china-agent.com) - [About Us](https://www.china-agent.com/about-us) - [Case Files](https://www.china-agent.com/case-files) - Monthly Support - [China Supplier Control](https://www.china-agent.com/monthly-support-packages) - [Your own employee in China](https://www.china-agent.com/employee-in-china) - Fixed-Price Services - [Supplier Reality Check ($95)](https://www.china-agent.com/supplier-reality-check) - [Due Diligence](https://www.china-agent.com/due-diligence) - [Contracts](https://www.china-agent.com/contracts) - [Guided Visits](https://www.china-agent.com/guided-visits) - [Fixer](https://www.china-agent.com/fixer) - [Blog](https://www.china-agent.com/blog) - [Contact Us](https://www.china-agent.com/contact-us) - [Book a call](https://www.china-agent.com/booking) - [Or WhatsApp us](https://wa.me/8615322086875) - [Knowledge Hub](https://www.china-agent.com/blog/tag/knowledge-hub) # Real Factory or Trading Company? 8 Things to Confirm Before You Order - October 1, 2026 ![Eldad Shashua](https://www.china-agent.com/hubfs/Eldad%20Shashua.jpeg) [Eldad Shashua](https://www.china-agent.com/blog/author/eldad-shashua) To tell a real factory from a trading company, look for the same answer in four places: the business scope on the license, the production address, the supplier's written reply, and what a person sees there. Buying from a trader is fine. Trouble starts when a trader says it's the factory. Here are eight ways to tell before you order. The listing says manufacturer. The sales rep says "our factory." Saying it costs them nothing, and it's the first story that falls apart when a batch goes wrong and you need to talk to the people who actually made it. Who makes your goods decides who fixes a defect and who holds the mold. A trader can also move your order to a cheaper workshop without telling you. And it matters at the US border. So find out before the first order, while you're still a buyer who hasn't paid anything. ## 8 ways to tell a factory from a trading company 1. **Read the business scope on the license.** **How:** Get the full Chinese business license (营业执照) and read the business scope (经营范围). A company that makes things lists words like 生产 (production), 制造 (manufacturing) or 加工 (processing) next to your product category. **Red flag:** The scope says 销售 (sales), 批发 (wholesale), 进出口 (import and export) or 贸易 (trade) and nothing about making your product. The company name is a hint too. Names with 贸易, 进出口 or 供应链 (supply chain) usually sell rather than make. A name alone proves nothing either way. 2. **Find the production address, then look at it.** **How:** Ask for the address where your goods are made, in Chinese. Put it on a map with satellite view. Compare it with the registered address on the license. **Red flag:** The production address is an office tower, a suite number in a commercial building, or an apartment block. A factory needs space and loading access, and you can usually see both from above. 3. **Ask the question in writing.** **How:** Send one plain email. Are you the manufacturer? If not, name the factory and the address where production happens, and send that factory's business license. **Red flag:** "We are factory and trading," "we have our own factory" with no name attached, or a factory name that never appears on any paper. A trader that says so openly is easier to work with than a factory that turns out to be a trader. 4. **Look at what else they sell.** **How:** Go through the catalog, the website and the listings. A factory tends to make one family of products with the same machines and materials. **Red flag:** The same catalog has phone cases, furniture and pet toys. Nobody runs production lines for all of that under one roof. 5. **Ask questions only a maker can answer.** **How:** Ask which steps they do in-house and which they send out, what machines they run your product on, how many lines they have for it, and who owns the molds and tooling. **Red flag:** Every technical answer comes back a day later, after they "confirm with the engineer." Vague answers on mold ownership deserve extra attention, because whoever holds the mold holds your product. 6. **Get a live video during working hours.** **How:** Book a video call at a time the factory should be running. Ask them to walk with the camera where you point it: raw material stock, a machine running your type of product, the finished goods area, and the original license where it hangs in the office. **Red flag:** A showroom tour and nothing else, a pre-recorded video, or "the line is off today" every time you ask. A video can be staged, so treat a good one as a start and never as proof. 7. **Make sure the paper trail names the same company.** **How:** The company on the PI, the beneficiary on the bank instructions and the exporter on the shipping documents should be the company you were told makes your goods. If a trader is in the middle, all of them should be the trader, and the factory should be named in your contract. **Red flag:** One company's name on the cartons, another on the invoice, a third on the bank account. I go through the paper side step by step in [Before You Wire a Deposit to a Chinese Supplier: 10 Things to Confirm](https://www.china-agent.com/blog/before-deposit-verify-chinese-supplier). 8. **Put someone at the production address.** **How:** Go yourself or send someone you trust, and have them arrive as a buyer. They should see the machines, the people working, your type of product being made, and the name on the gate. **Red flag:** They refuse the visit, keep moving it, or bring your person to an office or showroom instead. A refusal is an answer. Write it down. Work through the list in that order. The first five cost you nothing but a few emails, and they may settle it before anyone has to get on a train. ## Why US customs cares who made your goods In its list of what importers should submit when goods are reviewed under UFLPA, CBP's June 2026 [Forced Labor Enforcement Operational Guidance for Importers](https://www.cbp.gov/document/guidance/cbp-forced-labor-enforcement-operational-guidance-importers) notes that "CBP will need to determine whether a supplier is also a manufacturer." For clothing and other textiles, the entry paperwork has to name the actual manufacturer, even when someone else sent the invoice. That rule is in the [CBP Form 7501 instructions](https://www.cbp.gov/sites/default/files/2026-02/cbp_form_7501.pdf) and 19 CFR 102.23. In plain terms: if you don't know who made your goods, your broker can't put the right name on your entry, and you're the importer who answers for it. ## If it turns out to be a trader That's your call, and it can be a good one. A good trader can pull small orders together across several factories. What you need is the truth, in writing. Ask for the factory's name, address and license. Put the factory and the production address in your contract, so the trader can't move your order without telling you. Then decide whether the trader's margin is worth what it does for you. When paper and video can't settle it, someone has to stand at the address. That's the [Factory Reality Check](https://www.china-agent.com/factory-reality-check): we put a person at the production address for $795. If you want the paper side first, the [Supplier Reality Check](https://www.china-agent.com/supplier-reality-check) gives you a written verdict in two business days for $95. Both are part of our [supplier due diligence](https://www.china-agent.com/due-diligence) work. One supplier sent us the details of a company with "trading" in the name. Our client pushed back. So he sent a second company, with a name that sounded like a factory. The license still said trading. Both companies belonged to the same man. Both had almost no workers and almost no registered capital. He was busy acting like a factory instead of running one. The papers caught it before anyone got on a plane. Send the supplier's name and the address they gave you on [WhatsApp](https://wa.me/8615322086875), and we'll tell you which of these eight we'd start with. [Message us on WhatsApp](https://wa.me/8615322086875) [Book a call](https://www.china-agent.com/booking) Buying from this supplier every month? That's what [Monthly Support](https://www.china-agent.com/monthly-support-packages) is for. Want your own person at the factory? [Employee in China](https://www.china-agent.com/employee-in-china). We don't find you a different factory if this one turns out to be a trader. That decision stays with you. ## Frequently asked questions ### How can I tell if a Chinese supplier is a factory or a trading company? Read the business scope on the Chinese business license for manufacturing terms such as 生产 (production) or 制造 (manufacturing), compare the registered address with the production address, and ask the supplier in writing whether it manufactures or trades. A live video during working hours helps. A visit to the production address settles it. ### Is it bad to buy from a trading company in China? No. Buying from a trading company is legal and can work well. The risk is a trader that presents itself as the factory. If the supplier is a trader, get the factory's name, address and license in writing, and name the factory and production address in your contract. ### What does the business scope on a Chinese business license tell me? The business scope (经营范围) lists what the company is licensed to do. A manufacturer usually lists production, manufacturing or processing for its product category. A scope limited to sales, wholesale, import and export, or trade points to a trading company. ### Is a video call enough to prove a supplier is a real factory? No. A live video during working hours, with the camera going where you ask, is a useful first step, but it can be staged. The strongest evidence is a person you trust at the production address, seeing the machines, the workers and your type of product being made. ### Why does CBP care whether my supplier is the manufacturer? CBP's June 2026 forced labor guidance says CBP will need to determine whether a supplier is also a manufacturer when goods are reviewed under UFLPA. For textile and apparel entries, CBP Form 7501 instructions require the actual manufacturer to be identified. The importer of record answers for the accuracy of the entry. ### How quickly can China Agent get someone to a factory in China? China Agent has people in Guangzhou, Foshan, Yiwu, Shenzhen and Jinan. We work there through our hubs, legally registered in each city. Visits are next day for most of Guangdong and Zhejiang. Shandong and other provinces such as Fujian and Jiangsu take one to three days, sometimes with a small travel surcharge. The Factory Reality Check is $795. **Sources** 1. [CBP, Forced Labor Enforcement Operational Guidance for Importers, June 2026](https://www.cbp.gov/document/guidance/cbp-forced-labor-enforcement-operational-guidance-importers), Appendix E, p. 56 ([PDF](https://www.cbp.gov/sites/default/files/2026-06/fld_importer_guidance_final_06092026_0.pdf)) 2. [CBP Form 7501 instructions (02/26), Block 13 (Manufacturer ID)](https://www.cbp.gov/sites/default/files/2026-02/cbp_form_7501.pdf), citing 19 CFR 102.23(a) --- China Agent has worked on the buyer's side in China since 2009. Today it is a Hong Kong company with people in Guangzhou, Foshan, Yiwu, Shenzhen and Jinan. Blog Post ## Related Articles [![Shrink-wrapped pallets of cartons staged beside a trailer before container loading in China](https://www.china-agent.com/hubfs/palletized-cartons-ready-for-container-loading-china.jpg)](https://www.china-agent.com/blog/cbp-asked-chinese-factory-information) [Knowledge Hub](https://www.china-agent.com/blog/tag/knowledge-hub) ### [CBP asked about your Chinese factory. What do you send?](https://www.china-agent.com/blog/cbp-asked-chinese-factory-information) September 24, 2026 Someone wants Chinese factory information. Your first job is not to invent a clean story. Your first job is to gather... 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[Read more](https://www.china-agent.com/blog/employee-in-china-vs-monthly-support) [![Edge banding machine with touchscreen controls at a furniture factory in China](https://www.china-agent.com/hubfs/edge-banding-machine-furniture-factory-china.jpg)](https://www.china-agent.com/blog/who-pays-your-china-agent) [Knowledge Hub](https://www.china-agent.com/blog/tag/knowledge-hub) ### [Who pays your China agent, and why does it change what you hear?](https://www.china-agent.com/blog/who-pays-your-china-agent) September 26, 2026 Who pays your China agent decides what they can afford to tell you. A buyer-side China agent is paid a fixed fee by... [Read more](https://www.china-agent.com/blog/who-pays-your-china-agent) [Check all articles](https://www.china-agent.com/blog) Be ready when CBP asks ### See how our Monthly Support keeps your file current, month after month and order after order. 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