Agent, trading company, or factory — which one are you actually talking to?
What each one is paid for, how their incentives differ, and the specific booth questions that tell you which one you're facing.
Three different kinds of business use booths that look identical, and the type you’re actually negotiating with changes your price, your minimum order size, and who’s accountable if the product doesn’t match the sample. A factory manufactures what it sells you. A trading company resells another factory’s production, sometimes across several unrelated product categories at once. A sourcing agent doesn’t sell you anything directly — they’re paid to represent your interests in dealing with whichever of the other two you end up buying from.
The three types at a glance
| Who they represent | Typical minimum order | How to spot them | |
|---|---|---|---|
| Factory | Themselves, as the manufacturer | Set by their own production line, usually less negotiable | Can answer specific production questions, one product category or a tightly related few |
| Trading company | Themselves, as a reseller | Often more negotiable, since they’re not committing their own production line | Product range spans unrelated categories, staff struggle with manufacturing-specific questions |
| Sourcing agent | You, the buyer (for a fee or commission) | Not applicable — they don’t set an MOQ, the underlying factory does | Doesn’t have their own booth; represents you in dealing with an exhibitor’s booth |
Factory-direct
A genuine factory booth is staffed by people who can talk about the production line in specific terms — capacity per day, the equipment involved, how a customisation request would actually be implemented on the floor. The product range tends to be narrow and technically coherent: a lighting manufacturer sells lighting, not lighting alongside toys and kitchenware. Minimum order sizes are set by what’s efficient to run on their own line, which makes them less flexible but also means the price reflects one layer of margin, not two.
Trading company
A trading company buys from one or more factories and resells to you, adding its own margin on top of the factory price. This isn’t automatically a bad arrangement — for a buyer who wants a smaller, mixed order across several product types, a trading company can genuinely be more convenient than negotiating separately with several factories, each with their own minimum order. The problem is when a trading company presents itself as a factory to justify factory-direct pricing expectations or to imply a level of production control it doesn’t actually have. The dedicated page on spotting this goes through the specific tells in more depth.
A trading company’s incentive is straightforward: margin on the resale. That’s not hidden or dishonest by itself, but it means the person negotiating with you has no obligation to tell you what the underlying factory price actually is.
Sourcing agent
An agent doesn’t sell you a product at all — they’re paid to act on your behalf when dealing with a factory or trading company, whether that payment comes from you directly as a flat fee, or from the supplier as a commission on the deal they help close. That second arrangement is the one worth watching closely: an agent paid by the supplier has a financial reason to steer you toward suppliers who pay the best commission, not necessarily the ones who serve you best, and there’s rarely a way to see that commission from the buyer’s side of the table. Ask directly how an agent is paid before relying on their recommendation as neutral.
The clearest conflict of interest is an agent who is also, quietly, a trading company — selling you their own stock while claiming to represent your interests in finding the best supplier. The same structural problem shows up between sourcing agents and inspection companies, where the same business checking the goods sometimes also found and sold them.
How to tell which one you’re facing at the booth
- Ask to see the production line — photos or video, not just a claim. A factory can usually produce this on the spot or promptly by email; a trading company often can’t, or the footage doesn’t match what’s on the booth.
- Ask one technical question about the manufacturing process specific to the product — tooling, material sourcing, a step in assembly. Sales staff at a trading company booth frequently can’t answer beyond a generic script.
- Check the range of products at the booth. A tight, technically coherent range points toward a factory; several unrelated product types at one booth is a trading-company signal.
- Check the registered scope on the business license — covered in detail on the license-verification page — for whether it includes manufacturing or only wholesale/trading.
- Ask who else sells this same design. A factory’s answer is usually specific (their own retail brands, named clients); a trading company sourcing from multiple factories may not know, or the design may be a common one sold under several different booths at the same fair.
Verdict: which one fits your situation
A factory relationship fits an order large enough to meet their minimum, a product you understand well enough to specify precisely, and a buyer who wants the fewest layers of margin between themselves and production.
A trading company fits a smaller or mixed order across several product types, or a buyer who values the convenience of one point of contact over the lowest possible unit price.
A sourcing agent fits a buyer who can’t personally verify factories, doesn’t have time to manage the relationship after the fair, or is placing an order large enough that a production problem would be genuinely expensive — provided the agent’s payment structure is understood upfront, not assumed to be neutral.
What’s next
If verifying a specific claim about who you’re dealing with matters for your order, check the business-license verification page next, or read the common scams this distinction is designed to protect you from.
Frequently asked questions
Is it bad to buy from a trading company instead of a factory directly?
Can a sourcing agent also be a trading company?
How do I know if a Canton Fair exhibitor is really the manufacturer?
Keep planning
- Working with Suppliers from the Canton FairSourcing agents, factory verification, negotiation, samples, payment safety, and how the fair compares to buying through 1688 or Alibaba instead.
- Do You Need a Sourcing Agent for the Canton Fair?A scenario-based decision framework, plus what the fair itself already handles that a sourcing agent normally would elsewhere in China.
- How to Spot a Trading Company Posing as a FactorySpecific checks beyond a booth conversation — address, capacity claims, pricing behaviour, and paperwork that's harder to fake than a story.
- How to Verify a Chinese Business LicenseThe public registry that does this for free, what each field actually tells you, and what a clean result doesn't prove.