Quality Products International

QPI Ltd discussion on factory vs trading company

by on Apr.06, 2011, under China QC Inspection Blog

There was recently a post and discussion on Linked In

What are the best methods to confirm that a Chinese company is a manufacture and not a trading company?

From my experience in china so far I waste too much time trying to verify that a company is a factory and not a trading company. Except visiting the factory, does any one have suggestions on how to check this issue More effectively?

The comments were wide ranging and constructive. The reply I posted was:

A deal may still be workable and in some cases better via a trading company, for the various reasons stated above.

None the less, I think it is fair to know who you are dealing with.

We have at encountered trading companies that swear blindly that they “own”, “have shares in” or have “JV’ed” with a factory making a certain product sample in their show room.

…little did they know that I was family friends with factory owner and knew who owned the tooling in question!

One should also be a little cautious simply sighting paper work. Those people hanging around HQBei Metro exits saying ” ‘piao” can make more than just receipts, and I have seen some excellent “documents” of various formats.

There are two services that QPI Ltd offer.

Company Checks
We offer credit / background checks for companies in most Mainland provinces.

A full quality / capacity or social / ethical audit that would suit a major retailer can be expensive.

We can offer those, or a simple “lite audit” to provide a basic overview to address initial queries.

Of course the other option is to simply visit the factory.

Even visiting the factory, it can still be difficult to determine for sure if you are in fact “dealing with the factory direct”, or through a trading company that has a close and co-operative relationship with the factory.

At the end of the day, the question is, do you feel comfortable and trust the people you are working with, and does the deal stack up?

Contact QPI Ltd for further information about our services.

See full discussion on Linked In

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