What the business licence tells you
Every Chinese company has a business licence (营业执照) with a stated business scope. A manufacturer's scope contains production or manufacturing terms — 生产 or 制造 — against the product category. A trading company's scope is trade or wholesale. This is the single most reliable document-level check, and any real supplier will send you a copy.
Cross-check the licence against the public registry rather than trusting the PDF you were sent. Registered capital, year of establishment and the legal representative are all on the record.
Signals that prove nothing
Gold Supplier, Verified Supplier and similar marketplace badges are mostly a function of what the seller pays and whether their paperwork was checked. They are not a statement that the company manufactures.
Factory photos on a listing prove even less. The same stock images circulate across dozens of storefronts, and a trading company will happily photograph the factory it buys from.
A company saying "we are the factory" in chat is not evidence. Ask for the licence.
Signals that do
A registered address in an industrial park rather than an office tower, and one that matches the product category. A live video call walking the line, unscripted, on a day you choose. Consistency between registered capital, headcount and the capacity being claimed.
Who issues the VAT invoice, and who holds the export licence. If a third company appears on the export documents, you are buying through someone.
Whether they can talk about tooling, tolerances and process without checking with anyone. A reseller can quote a price; they usually cannot argue about a drawing.
Why this changes the price you pay
A trader's margin sits inside the unit price, so you cannot see it — and because import duty is charged on the invoice value, you pay duty on that margin too. The markup is charged twice: once by the trader, once by customs.
A trading company is not automatically the wrong choice. For small quantities, mixed orders or a factory that will not deal with foreign buyers, a trader can be the sensible route. The problem is paying factory-direct prices for a reseller without being told.
What we do about it
We check the licence scope, read the company's own site, and verify the manufacturer against the registry before a quote goes out. Every supplier is named to you, and a trader is named as a trader rather than dressed up as a factory.
Related questions
[01]Can I check a Chinese company's business licence myself?
Yes. Ask the supplier for a copy of the 营业执照, then verify the company name and registration number against China's public company registry. You are checking that the business scope mentions production or manufacturing for the product you are buying, and that the company has been trading long enough to have a record.
[02]Does Gold Supplier status mean a supplier is a factory?
No. Marketplace supplier tiers reflect paid membership and document checks, not whether a company manufactures anything. A trading company can hold the highest tier on any marketplace.
[03]Is it bad to buy through a trading company?
Not necessarily. Traders are useful for small or mixed orders and for factories that will not deal directly with foreign buyers. What costs you money is not knowing — because the margin is inside the unit price, and import duty is then charged on that inflated value as well.
Read next
- What does a China sourcing agent cost?The three fee structures you will be quoted, which one hides the number, and why the structure matters more to your landed cost than the percentage.
- DDP, FOB or EXW: which should you buy on when importing from China?What each Incoterm actually covers, where the surprise costs sit, and the question that decides whether a DDP quote is real.