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How to Identify Trading Companies and Factories in China?

Sourcing products from China is a popular strategy for businesses worldwide due to competitive pricing, diverse product ranges, and reliable manufacturing. However, one key challenge is identifying whether you are dealing with a factory or a trading company. Why does it matter?

Working directly with a factory often means better pricing, faster production, and greater control over quality. Trading companies, on the other hand, act as middlemen, adding a markup and leaving you with less control. Knowing who you’re dealing with can make or break your sourcing experience.

In this blog, we’ll break down the key differences between factories and trading companies, share practical tips to identify each, and explore why working directly with manufacturers can give you a competitive edge. Ready to make sourcing easier and smarter? Let’s dive in!

Why Is It Important to Know If You Are Working with a Factory or a Trading Company?

When sourcing solid surface sheets (used for countertops, vanity tops, wall cladding, and other applications) from China, knowing whether you’re dealing with a factory or a trading company is essential. This decision directly affects your cost, quality, lead time, and customization options.

Let’s explore why this distinction matters, using solid surface sheets as an example.

1. Cost Savings

  • Factories:
    Factories produce solid surface sheets in-house and can offer more competitive pricing. They have control over raw material costs (e.g., acrylic resin, aluminum trihydrate, and pigments) and can price their products based on direct production expenses.
  • Trading companies:
    Trading companies purchase solid surface sheets from factories and add their markup, often 20–40%. This markup increases your cost without adding value to the product.
20241126 big 5 dubai kkr solid surface (16)
20241126 big 5 dubai kkr solid surface (16)

2. Better Quality Control

  • Factories:
    Factories oversee every step of the production process, ensuring strict quality control. For solid surface sheets, this means maintaining consistent material formulation, curing, and surface finishing to meet durability and aesthetic standards. A factory can inspect sheets for defects like bubbles, color inconsistencies, or uneven thickness before shipping. For example: A factory producing solid surface sheets for healthcare applications can add antibacterial coatings and verify these properties in-house through testing.
  • Trading companies:
    Trading companies depend on external factories to produce the goods. If defects like scratches or warping occur, the trading company must coordinate with the factory for replacements, leading to delays. Trading companies also cannot guarantee consistent quality if they source from multiple suppliers.
solid surface sheet
solid surface sheet

3. Faster Delivery Time

  • Factories:
    Factories control their production schedules, making it easier to provide accurate lead times. For example, a factory might take 10–15 days to produce 1,000 sheets of 6mm solid surface material. They can quickly adjust if you request changes during production.
  • Trading companies:
    Trading companies rely on third-party factories, adding communication layers and potential delays. For example, if you request a rush order, a trading company has less flexibility to expedite production compared to dealing directly with a factory.
mixed colors per container(1)
mixed colors per container(1)
kkr shipping
kkr shipping

4. Easy to Customization

  • Factories:
    Factories are equipped to handle detailed customization requests, such as unique sheet colors, custom textures, or specific dimensions. For solid surface sheets, this might include creating sheets with integrated logos or custom pigments to match branding. For example: A hotel chain could work with a factory to produce custom-colored sheets for countertops, ensuring consistent branding across locations.
  • Trading companies:
    Trading companies are limited in their ability to offer customization, as they depend on the factory’s existing capabilities. They may also take longer to confirm feasibility or pricing for custom orders.

How to Know the Difference Between Factories and Trading Companies?

When sourcing from China, understanding the differences between factories and trading companies is essential to make informed decisions. Here are the key aspects to look for:

1. Ownership of Production Facilities

  • Factories:
    Factories own their manufacturing facilities, including production lines, machinery, and warehouses. This gives them direct control over the entire process, from sourcing raw materials to shipping finished products. For example: A factory producing solid surface sheets will have resin mixers, curing ovens, and surface polishers on-site, ensuring end-to-end quality control.
  • Trading companies:
    Trading companies don’t own production facilities. Instead, they outsource manufacturing to third-party factories. This often leads to less transparency, as they act as intermediaries without direct control over production.

2. Specialization

  • Factories:
    Factories typically specialize in a narrow product range. For example, a factory might focus solely on acrylic solid surface sheets, offering expertise in their formulation, durability, and finishing. This specialization ensures consistent quality and the ability to handle technical customization.
  • Trading companies:
    Trading companies often deal with a wide variety of products. They may sell solid surface sheets one day and switch to unrelated items like tiles or bathroom fittings the next. While this variety might seem convenient, it usually means less product expertise and inconsistent quality.
kkr m8854 vanity top (4)
kkr m8854 vanity top (4)

3. Pricing

  • Factories:
    Factories offer competitive pricing because they eliminate the middleman. Their pricing reflects only the cost of raw materials, labor, and production overhead.
  • Trading companies:
    Trading companies add a markup to factory prices to cover their profit margins. This can significantly increase 20-40% costs, especially for bulk orders.
20241126 big 5 dubai kkr solid surface (4)
20241126 big 5 dubai kkr solid surface (4)

4. Communication

  • Factories:
    Factories have direct technical knowledge of their products and processes. They can provide precise answers to questions about material composition, certifications, or production timelines. For example: If you need details on the UV resistance of solid surface sheets, a factory can provide lab test reports and explain the process.
  • Trading companies:
    Trading companies act as middlemen, relaying your questions to the factory. This often leads to delays and vague responses, especially if the trading company lacks technical expertise or works with multiple factories.
img20220214173127
Fast Communication

Additional Considerations

1.Transparency: Factories are more transparent and often encourage site visits to verify their facilities. Trading companies may avoid this as they do not own manufacturing operations.

KingKonree Factory Overview

2.Certifications: Factories often hold certifications like ISO 9001 or environmental credentials under the factory name. Like KingKonree certificates are under the name of KingKonree International China Surface Industrial Co., LTD as below certificates showed. If you work with a company with certificates under other name, you almost meet a trading company.

6 Simple Methods to Verify Suppliers

Distinguishing between factories and trading companies is crucial for ensuring a smooth and cost-effective sourcing process. While conducting factory audits is the most reliable way to verify a supplier, doing so for every potential partner can be time-consuming and costly.

So, how can you quickly and efficiently identify whether you’re working with a factory or a trading company during initial communications? Here are some practical methods to help you make that distinction early on.

1. Verify Their Business License

A business license is an official document that clearly defines their operational category. Ask for a copy of their business license and look at the registered business scope.

Factories will list “Fabrication” or “Production” in their description, while trading companies will ONLY include terms like “Trading” or “distribution.”

image 4
Business License of KKR

2. Check Their Address

The location provides clues about the nature of their operations. Industrial zones are designed for production, while office districts cater to trade and administration. Factories are typically located in industrial zones, where production infrastructure is available. In contrast,trading companies operate from business districts or office buildings.

For example, KingKonree have two address:

Main Office: No.2408-2508, Building 5A, Longguang Jiuzuan, Longhua District, Shenzhen, China.

Factory: No.003 Qingli Street, Tangjiao Village, Zhenlong Town,Huiyang Area, Huizhou.

You can find our main office is in Shenzhen office district, have sample room for easier communicate with customers who have no time to visit our factory.

Factory is in Hizhou, GuangDong, where is only 1 hours car driving from our main office to factory.

3. Request Certifications

Factories often hold industry-standard certifications like ISO 9001 for quality management or CE certifications for exports. These indicate their capability and compliance with regulations.

You can see all certificates of KKR are under the name of “KingKonree International China Surface Industrial Co., LTD” as below certificates showed. If you work with a company with certificates under other name, you probably meet a trading company.

4. Alibaba and Other B2B Platforms

On platforms like Alibaba, look for suppliers marked as “Verified Manufacturer.” This label indicates that the platform has independently verified their manufacturing capability.

For example, Kingkonree have two Alibaba oneline store, you can find “Verified Custom Manufacturer” in Alibaba Platform Page.

Kingkonree International China Surface Industrial Co., Ltd.

Huizhou Kkr Stone Co., Ltd.

kingkonree alibaba store (1)
kingkonree alibaba store (1)
kingkonree alibaba store (2)
kingkonree alibaba store (2)

And it is a manufacturer when you find the type of “manufacturer, trading company” as below:

image
Example”Manufacturer, Trading Company”

It is a trading company when you find the type of “trading company” or “Multispecialty supplier”as below:

1735723854319
Example”Trading Company”
example
Example “Multispecialty supplier”

5. Chinese Government Databases

Government databases provide official, transparent details about a company’s legal status and nature of operations.

Use public Chinese business registration websites such as Qichacha or the National Enterprise Credit Information Publicity System (NECIPS) to verify a supplier’s business license and operational scope.

national enterprise credit information publicity system necips
national enterprise credit information publicity system necips
qichacha
qichacha

So, how do you use the system?

For Example of QiChaCha:

First thing first, as the website is available in the Chinese language, you need to paste the FULL legal Chinese name of the Chinese company in the search box, and then click “Search”. See the picture below:

image 2
Example of how to use QiChaCha

If you can’t find the company here, either the company doesn’t exist, or its current legal name is not what you type in. In short, this means that the company in this name doesn’t exist.

If you can find the company, you can know its status, such as registration status, personnel size, numbers of insured persons, business scope, import and export enterprise code and so on.

See the picture below:

qichacha example of kkr
qichacha example of kkr

So you can see the KKR company info.: 74 numbers of insured persons, business scope is “加工(Fabrication)”、“生产(Production)” , have right to import and export enterprise and so on.

If only see the company info. of business scope is “销售(sales)” without “加工(Fabrication)” or“生产(Production)” , that’s a trading company.

6. Social Media and Website Clues

Authentic content from a factory demonstrates their operational capabilities, while trading companies may rely on stock images or avoid showing production altogether.

Visit the supplier’s website or social media profiles for visual evidence of their operations. Factories often showcase images or videos of their production lines, equipment, and workers.

A legitimate factory always post photos of solid surface sheet manufacturing, including resin mixers, curing ovens, and polishing lines like KKR did, you can find many our factory videos in our YouTube.

kkr youtube
kkr youtube

Questions to Ask Suppliers

Asking the right questions is a straightforward way to determine whether your supplier is a factory or a trading company. These inquiries help you assess their operational capabilities, product expertise, and reliability. Here are key questions to ask:

  • Can we visit your factory?
  • How long have you been in production?
  • What is your main product focus?
  • How many employees work at your factory?
  • Do you handle all production in-house, or do you outsource some processes?
  • Can you provide your business license?
  • What certifications do you have (e.g., ISO 9001, CE, environmental compliance)?
  • Do you have third-party audit reports or factory inspection records?
  • Can you customize products to meet specific requirements (e.g., materials, dimensions, or finishes)?
  • Can you provide test reports for product quality or performance?
  • What is your production capacity per month?
  • Where is your factory located?
  • Can you share photos or videos of your production line and facilities?

Asking these questions not only clarifies whether you’re dealing with a factory or a trading company but also helps build trust with your supplier. The responses you receive will reveal their authenticity and alignment with your sourcing needs.

KingKonree – The Leading Solid Surface Manufacturer In China

kkr bathroom vanities & bathtubfactory (1)
kkr bathroom vanities & bathtubfactory (1)

KingKonree is a trusted solid surface manufacturer in China with over 20 years of expertise in the industry. Our factory is equipped with 3 advanced production lines, allowing us to offer a wide range of high-quality solid surface products, including:

  • Solid Surface Sheets: Perfect for vanity tops, countertops, bar tops, tables, wall panels, and other applications.
  • Solid Surface Bathtubs: Durable, stylish, and available in various shapes and sizes.
  • Fabricated Solid Surface Products: Customized solutions like vanities, countertops, and wash basins.

At KingKonree, we take pride in having our own mold-making machinery, enabling us to handle customized solid surface products with ease. Whether you need a unique design, specific dimensions, or exclusive features, our team is ready to bring your vision to life.

If you want to import solid surface from China, pls feel free to contact us.

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Hey There, I’m Cherry!

I’m from KKR. We are a professional Solid Surface manufacturer in China. We provide various solid surface products for bathrooms, kitchens, hotels, exhibitions and 2000+ projects.

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