Many articles about Chinese trade told you that trading companies will cut your benefits, make importers who don't understand the China market misunderstand Chinese trading companies. In fact, this argument doesn't apply to all Chinese trading companies. Some trading companies do harm your benefits, but it is undeniable that many trading companies create value for their clients.
As experienced trade practitioners (in 23 years, our company has grown from 10-20 staffs to more than 1,200 staffs), we will introduce relevant information about China trading companies from an objective perspective. If you want to make better import decisions, then this article is for you.
It mainly includes the following aspects:
1. What is China Trading Company
2. 7 types of Chinese trading companies
3. Is it worth cooperating with China trading company?
4. How to identify different types of trading companies online
5. Where can I find China Trading Company?
6. Which type of Chinese trading company is suitable for your business
7. Types of trading companies that need a vigilance
1. What is a Chinese Trading Company
Chinese trading companies are a business model that establishes connections between buyers and sellers, can also be understood as middlemen. They will cooperate with multiple manufacturers, collect numerous products, and establish an extensive supply chain network to meet customer needs. In short, trading companies do not produce goods. Compared with manufacturers focusing on production and assembly, trading companies are more professional in import and export processing. This is also an important reason why China trading companies are chosen by many importers.
2. 7 Types of Chinese Trading Companies
A certain-filed trading company
This trading company often specializes in a class of products. On the professional market, they can be said to be an absolute expert. They generally have experienced teams responsible for product development, marketing, etc. If you need goods in a specific area, they may give you lower price and more product options than the factory.
For example, if you want to buy auto parts, you need to visit at least 5 factories. But with the help of a professional auto machinery trading company, you can meet all your needs in one place. However, they have a disadvantage that there is no competitive advantage in large quantity production needs.
Grocery Trading Company
Contrary to specific trading companies, groceries trading companies operate various types of products, mainly to the daily consumer goods. They rely on various factory resources. Typical grocery trading companies will put a large number of grocery products on their own sites for customers to choose. Although their product categories are rich, they lack professional in operation. For example, they don't pay attention to the production method of materials or products, and mold cost estimates. This disadvantage is easy to reflect in custom products.
Sourcing Agent Company
Yes, sourcing agent companies are also a type of Chinese trading company.
The core business of a sourcing company is to find suitable suppliers for buyers. Unlike other trading companies, they won't pretend to be a factory. This type of trading company will provide you with more suppliers and products for selection and comparison. If you aren't satisfied with the suppliers or products they are looking for, you can ask them to continue looking for resources. In addition, they will help you negotiate prices with suppliers. In most cases, they can get a lower price than you can buy directly.
When you make a decision, they will arrange purchases, follow up production, check quality, handle import and export documents, transportation, etc. If you have a need for customized products, they can also help you find reliable factories for customization. Through this comprehensive service, you can save time and cost. Even if you have no experience in importing from China, they can help you easily import products from China.
Many sourcing companies will be established near well-known wholesale market, convenient to lead clients to market purchase products. Some powerful sourcing companies will also put advertisements on the market. They aren't only familiar with market suppliers, but also collected a lot of factory resources that you didn't know about. Because many factories don't conduct marketing on the Internet, but directly cooperate with Chinese trading companies.
Points: Unprofessional sourcing companies will bring many problems, such as poor product quality, high prices, and low efficiency. Of course, a professional sourcing company can meet the needs of customers very well. It is recommended to choose a large sourcing company, which generally has a well-structured department and rich experience.
Hot-selling Trading Company
This kind of trading company focuses on selling hot products. They will study the market trend and be good at excavating the hot products from the factory resources. Because many hot products may be out of stock, they will purchase from the factory after determining the hot-selling products, ensuring that they can be delivered in time. They usually sell a hot product for 2-3 months. During this period, the hot-selling trading company will also conduct marketing to further promote the hot products. When the heat declines, they will quickly turn to other hot goods, easily seize the opportunity to make money.
Note: Their products don't have long-term, after-sales service is unstable. In addition, this trading company has only a few staffs, even only one person.
SOHO Trading Company
Such trading companies generally only have 1-2 employees. Some people also call it "small office" or "home office".
Soho trading company is usually founded on the basis of old customers after the founder resigned from the original trading company. It can be divided into specific type, groceries type, and hot-selling type. This type of trading company has fewer employees, so the operating cost is relatively low, and sometimes it can provide buyers with more favorable prices. But it also means that they cannot handle large-scale orders. One's efficiency is limited. When the business is busy, it is easy to miss many details, especially when there are multiple customers, it will reduce the efficiency even more.
For example, if she is a personal worker, but she is sick or pregnant, then she won't have so much energy to handle work, or even work. At this time, you need to find a new partner, which will waste a lot of time and energy.
Factory Group Trading Company
Traditional trading companies no longer fully occupy the status of the market.
Some manufacturers unite to form a trading entity or larger manufacturer, covering various types of products. This is the factory group trading company. In this way, it is convenient for buyers to purchase products, simplifying export and invoicing procedures, thereby improving efficiency. However, the manufacturers in the factory group trading company will be restricted by other manufacturers, and product prices need to be determined by both parties.
Joint manufacturer and trading company
These trading companies usually provide the services of manufacturers and trading companies at the same time. They also produce goods themselves, but also use the resources of other manufacturers. For example, this is a manufacturer that produces vases. When purchasing vases, many customers want to purchase artificial flowers, wrapping paper or other ancillary products at the same time. In order to meet the needs of customers and to increase their own profits, they will try to sell related products produced by other factories.
This model can enable them to strengthen cooperation with customers. But core products may be covered by other products, and resource costs will rise. In addition, the factories they choose to cooperate with are usually limited to the surrounding areas, and the factory resources are relatively lacking.
3. Is it worth cooperating with China trading company
Some of our new customers will ask to purchase products only from direct factories. Some customers will also ask us what are the advantages of buying from a Chinese trading company. Let's briefly talk about the comparison between Chinese factories and trading companies.
Compared with the factory, China Trading Company knows more about market trends, providing more types of products, which can better meet the needs of various customers. But some products may be higher than the factory price. In addition, the development of trading companies depends on customers, so they will pay more attention to customer service. When the plant is unwilling to cooperate, the trading company will pay the greatest effort and the factory communication.
Compared with customers, Chinese trading companies understand Chinese culture better, have good cooperative relations with many factories, and can obtain samples more easily. Some trading companies also provide comprehensive import and export services. Buying from a Chinese trading company can get a lower MOQ than the factory. But buying directly from the factory can improve product controllability, especially in terms of customized products.
In fact, whether you choose to cooperate with a factory or a trading company, you ultimately need to see which one brings you the most benefits. If there is a trading company that can meet your needs and bring you greater benefits than directly cooperating with the factory, then cooperating with a trading company is also a good choice.
4. How to identify different types of trading companies online
Find a trading company online, pay attention to check these points:
1. Their contact page leaves a landline or mobile number. If it is a landline, it is basically a relatively bigger trading company. However, many trading companies now leave mobile numbers in order to receive customer inquiries in a timely manner.
2. Ask them for office photos, company logos, addresses and company business licenses. You can also video chat with them to determine their office environment and infer the type of trading company.
3. Does the company name contain "trade" or "commodity".
4. Companies with many types of products and a large span (for example: vases and headphones) are often grocery trading companies or purchasing agent company.
5. Where can I find a Chinese trading company
If you want to find a reliable trading company for your business, you can search for keywords such as China Trading Company, Yiwu Trading Company, China Purchasing Agent, or Yiwu Agent on Google. You can also browse websites such as 1688 and alibaba.
Most Chinese trading companies have their own sites or wholesale platform shops.
If you plan to travel to China in person, you can also pay attention to the surroundings at Chinese exhibitions or wholesale markets. There are often many Chinese trading companies stationed here.
6. Which type of Chinese trading company is suitable for your business
If you are a wholesaler, need to import in large quantities and are familiar with the import and export process, we recommend that you directly cooperate with the factory in most cases. However, in the following situations, according to your needs, we recommend you to choose this:
Need a lot of professional products. For example, you need to wholesale a lot of auto parts for your chain auto repair shop. In this case, we recommend that you cooperate with a specific filing-type trading company or a factory group trading company. Choosing this type of trading company can get professional products, and the types are usually very complete. They will also assist you in solving many professional problems.
Need for multiple types of daily consumer goods. For example, if you need to wholesale a lot of daily necessities or other products for your chain store, it is recommended that you choose a grocery trading company or a sourcing agent company. A professional grocery trading company can basically meet all your needs, and some of their products are in stock, which can be ordered at a lower price and MOQ. Or choose a purchasing agent company. The purchasing agent company can help you purchase in the wholesale market or factory, and is responsible for many other additional services, which is very helpful for saving energy and costs.
If you are a retailer, and you only need a small amount of import. This situation we compare you to cooperate with China Trading Companies. Small batch orders are difficult to reach the factory's MOQ, but trading companies usually have stocks, or they can get a lower MOQ of multiple products from the factory, and then load a container shipping. This is very attractive for retailers. It is recommended that you choose a specific registered trading company, or a grocery trading company or a purchasing agency company according to your product needs.
If your business is online business, it is recommended to cooperate with the Hot-selling (HS) company. The price of the hot-selling (HS) company will usually be a bit high, but their timeliness is very good, it is not easy to miss the best selling opportunity for the product. If your business focuses on chasing popular products, you can work with HS Trading Companies to facilitate communication of hot products.
7. Types of trading companies that need a vigilance
There are two types of Chinese trading companies that you need to be wary of:
The first is a company that uses false information in an attempt to defraud, and the second is a company that forged company strength.
The trading company that uses false information in an attempt to defraud you may not actually exist. Most of them are forged their company pictures, addresses and product information. Or disguise yourself is a factory.
The second type is the actual trading company, but they forged their own strength in an attempt to receive large orders. But in fact, they don't have enough strength to complete, unable to deliver on time, and even a lot of problems will occur.
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