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Trading Companies vs Factories: Which is Best for Your Import Business?

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Are you starting your sourcing journey in China but feeling overwhelmed about choosing between manufacturers and trading companies? Don’t worry – you’re not alone. This is one of the most common questions faced by importers, whether you’re a first-time Amazon seller or an experienced business owner. In this guide, we’ll help you make the right choice for your business while avoiding costing you thousands of dollars. What Are the Differences Between Factory and Trading Company? Let’s start with the basics – understanding exactly who you might be dealing with in China. What Is a Manufacturing Factory (OEM)? A manufacturing factory (or OEM – Original Equipment Manufacturer) is exactly what it sounds like: a facility that actually produces products.  They have their own production lines, workers, and equipment . Think of them as the “creators” in the supply chain. For example, if you’re sourcing  wooden floors , a factory would be the facility with machines that control the moistu...
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Are You Working with a Factory or Trading Company? Real-life Examples to Help You Tell

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  When you’re   sourcing from China , you must be able to tell the difference between a real factory and a trading company. While both can be valuable partners, knowing exactly who you’re dealing with helps you make informed decisions about pricing, quality control, and long-term partnerships. Let’s break down everything you need to know to tell a Chinese factory from a trading company. Why Does It Matter? Before we dive into the specifics, you might wonder why this distinction is so important. Working directly with a factory can often mean better pricing, more control over production, and direct communication with the people making your products. However, trading companies can offer their own advantages, like broader product ranges and more experienced export handling. We’ve learned about the  differences between a trading company and a factory . The key is knowing which one you’re actually working with, so you can negotiate appropriately and set realistic expectations. ...
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