Is it a factory, or a trading company wearing a factory’s website?
Four checks that use documents you already have. The first three need no site visit, no Chinese, and no phone call. The fourth is the one that settles it.
First, the thing almost everyone gets wrong
A trading company is not a scam. It is a legal, ordinary business that buys from factories and resells to buyers like you. For a small order it is often the better choice, because a trader can combine your 300 units with someone else’s 3,000 and get you a factory’s price band you could never reach alone.
The problem is never “it is a trader”. The problem is paying a factory price for a trader’s goods, and finding out afterwards. The margin is usually 10–25%, and the factory owes you nothing — your contract is with the trader.
So the question is not “is this a factory?” It is “do I know which one I am dealing with, and am I paying accordingly?” Those are different questions, and only the second one is worth ten minutes of your time.
One more thing before the checks. “Business scope does not list manufacturing, therefore it is not a factory” is not a valid test. It looks like one, and it circulates widely, but it has been rejected by Chinese courts and by the State Council’s own reform documents: registration scope and actual manufacturing capability are not required to match. A scope that lists only sales and wholesale is a flag worth checking. It is not a verdict.
The four checks, in the order they cost you least
Check one is free and takes about two minutes. Check four needs a person on the ground. Do them in order — most traders are already visible by check two.
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01
The social-insurance headcount
Chinese companies report the number of employees covered by social insurance. That figure appears in the national enterprise credit system, but on some records — and from some locations outside mainland China — the field is blank or unreachable. Where it is there, it is the cheapest test available: a company claiming to run its own production lines with a single-digit headcount is not running lines. Six people cannot staff an incoming-inspection bench, a production shift, a packing line and a shipping desk.
The number that does look like a factory tells you less than you think, though — see the limits below. Use this check to exclude, not to confirm.
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02
The registered address, read as a type
Factories register at production sites: industrial parks, township roads, plots with a building number and a workshop. Traders register at office addresses: a floor of a commercial tower, a serviced-office suite, sometimes a residential unit.
You do not need to know the city. Search the address and look at what kind of building comes back. “Room 1801, Tower B, XX Business Centre” is an office. “No. 8, XX Industrial Road, XX Town” is a plant.
Careful: a real factory can also keep a sales office in the city, and a large group can have several registered addresses. An office address is a flag, not proof.
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03
The name on the customs record
If a company has never appeared as the shipper on an export record, one of two things is true: they have not exported, or they export under someone else’s name. Both are worth knowing before you wire a deposit — and the second one is exactly what a trader does.
For US-bound ocean freight this is checkable from public bill-of-lading data. Search the company name as shipper, not as supplier. If the shipper name on the record is a different company, you have found your answer — and it is the gap that matters most, because the customs paperwork will name a party you have no contract with.
Absence of records is not proof of absence. Air freight, courier and LCL shipments do not all show up here.
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04
The equipment, standing on the floor
Every check above can be satisfied by a well-organised trader. This one cannot. Ask what machines run your process, then ask to see that machine running, with a date and the gate plate in the same frame. A printer who subcontracts has no press. A converter who subcontracts has no slitter.
This is also where the headcount check pays off: a plant with four extrusion lines has people on them. Walk the floor and count.
What each check cannot tell you
Written down, because a page that only lists what works is not a page you should trust.
| Check | Proves | Does not prove |
|---|---|---|
| Social-insurance headcount | How many people are on the books | That they make your product. A 200-person plant can still outsource your line. |
| Registered address | What kind of site they register at | That the plant is theirs. Leased floors are normal, and a group can have several addresses. |
| Customs shipper name | Whether they export under their own name | Anything about volume, quality or who owns the goods. Traders export legitimately too. |
| Equipment on the floor | That the process exists here | That it is idle, maintained, or will be used for your run rather than someone else’s. |
Does it actually matter? Sometimes no
For a 200-unit first order of a simple printed carton, a trader is often the right answer. You get a factory price band, someone handles the export paperwork, and you are not asking a plant to interrupt a production run for a rounding error.
It starts to matter when any of these is true:
- You are paying a factory price and want factory terms — a trader’s margin is 10–25% of your order
- Quality has to be controlled at the process level, not just at final inspection
- You need to change a material or a tool and want to talk to whoever runs the machine
- Your volumes are large enough that a trader is no longer saving you anything
- Your market requires you to name the actual manufacturer on the import documentation
None of these make a trader wrong. They make the price wrong, if you are paying factory rates.
Two minutes you can spend right now
- Search the company name in the national enterprise credit system (or a mirror of it). Look at two fields only: the social-insurance headcount and the registered address. Do not read the business scope yet — it will mislead you.
- Put the registered address into a map. Whatever building comes back tells you more than the address string does.
Send me the company name
I will run checks one to three and tell you what they say. If the name resolves to a factory, you will know. If it resolves to a trader, you will know that too — and what it means for the price you were quoted.