You can tell a real factory from a trading company in China by checking five things: whether the registered business scope includes production (生产 or 制造), whether the address is an industrial site, whether the supplier can show live production on a video call, whether production certificates name its own site, and whether an on-site audit confirms the claims. Many suppliers describe themselves as a "factory" in English, so rely on evidence, not on the company profile.
Why the difference matters
A trading company buys from one or more factories and resells. That is a legitimate business model, but it changes what you are buying. With a trader, the type-test reports, quality system and production capacity belong to a third party you have not met. Engineering questions are relayed, lead times depend on someone else's schedule, and if the trader switches its source factory, your next shipment may come from a different plant.
For engineered electrical equipment such as distribution cabinets, transformers or power cables, this matters more than for simple consumer goods. Type tests are tied to a design made at a specific factory. A report from one plant does not cover a copy made at another.
Check 1: business scope wording
Ask for the business licence (营业执照) and look up the unified social credit code on the official national enterprise credit system. Then read the business scope (经营范围).
| Wording in scope | Meaning | Suggests |
|---|---|---|
| 生产 / 制造 / 加工 | Production / manufacturing / processing | Factory |
| 研发 | Research and development | Possible in-house design |
| 销售 / 批发 / 零售 | Sales / wholesale / retail | Trader or sales company |
| 贸易 / 进出口 | Trade / import and export | Trader or export arm |
| 技术服务 / 咨询 | Technical service / consulting | Service company, not a maker |
A factory often lists both production and sales. A company listing only sales and trade is not a manufacturer, whatever its website says. Note that some manufacturing groups run a separate export company that holds only trading scope; in that case ask for the licence of the production company too and check that the two are related.
Check 2: address and industrial zone
Compare the registered address and the claimed factory address.
- Factories are usually in an industrial park, development zone or economic and technological development zone. Chinese addresses for these often contain 工业园, 工业区 or 开发区.
- An address in an office tower (大厦) or a commercial building with a room number is typical of a sales office.
- Check the address on a satellite map. A transformer or switchgear plant needs workshop buildings, loading areas and test bays, not a single floor.
A factory may legitimately keep its sales office in a city centre. Ask for both addresses and verify each.
Check 3: the video call tour
A live video call is the fastest practical test before an audit. Ask in advance, but do not send the route; let the supplier walk you through in real time.
What to ask to see:
- The factory gate with the company name sign, then walk inside without cutting the call.
- Production lines running, with workers at stations, not an empty showroom.
- Key equipment for your product, for example winding and drying for transformers, sheet metal and busbar processing for switchgear, extrusion lines for cables.
- The test area and its equipment, such as a high-voltage test set or routine test bench.
- Raw material and finished goods stock, with labels.
- A product on the line that matches your enquiry, with its nameplate.
Warning signs are a call that only shows a sample room, a camera that stays pointed at one corner, refusal to move between buildings, or name signs that do not match the registered name.
Check 4: production certificates and test reports
Certificates are issued to a legal entity and often to a named production site. Read them carefully.
- Type-test reports: the manufacturer named on the report should be the company you are buying from, or a factory you can verify and that the supplier names openly.
- ISO 9001: check the certificate holder, the address and the scope. A trader's certificate may cover "sales" only.
- CCC: for products in China's compulsory certification catalogue, the certificate names the manufacturer and the factory. It shows who actually makes the product.
- Production licences: certain product groups in China require an industrial production licence held by the maker.
- CE or CB scheme certificates: confirm the manufacturer field and the model list.
If every certificate names a different company, you are almost certainly talking to a trader.
Check 5: export setup
China removed the separate foreign-trade operator filing for most businesses, so an "export licence" is rarely the right thing to ask for. Most electrical equipment does not need a product-specific export licence. What you can ask is whether the supplier is registered with Chinese customs as a consignor or consignee of import and export goods, or whether it exports through an agent. A factory that exports through an agent is not unusual, but the agent then appears on shipping documents, and you should know who it is before signing.
Check 6: on-site factory audit
For large or engineered orders, send your own engineer or a third-party inspection company. A useful audit covers:
- legal entity and licence originals
- production equipment owned versus subcontracted
- headcount on the floor and shift pattern
- incoming material inspection and traceability
- routine test procedures and calibration records
- records of previous orders of the same type
The audit report should state clearly whether the visited site is the manufacturer of the product you are buying.
When a trading company is fine
A trader can be the right choice when:
- you buy many small items from different categories and want one consolidated shipment
- you need English-speaking support and the factory has none
- the product is a standard catalogue item with clear certification from a named maker
- the trader is open about its source factory and will put the factory name in the contract
The risk is not the trader itself. The risk is not knowing who makes the product.
What to check with any Chinese supplier
Before you order, confirm the unified social credit code and registration status, the business scope, the type-test reports for the exact model and rating, the standards claimed (for example IEC 62271-200 for MV switchgear, IEC 61439 for LV assemblies, IEC 60502 for power cables) and the certificate holders. China Factory Rank scores record whether a registered entity, official website, contacts and product range have been found for each company; the score is about data completeness, not quality. Read how the score works, then use the ranked list on each category page, such as ring main units, as a starting shortlist.
Frequently asked questions
Can a company be both a factory and a trader?
Yes. Many factories also resell items they do not make, such as accessories or components. Ask which items in your order are made in-house and which are bought in.
Is a trading company always more expensive?
Not always. A trader with high volume can sometimes buy at good terms, but it adds a margin and an extra link in communication. Compare complete quotes, including tests and documents.
What is the quickest single test?
A live, unscripted video tour of the production line, combined with checking that the business scope includes production, removes most doubt within an hour.