Why the trading company is much advantage than a factory when you purchase the goods?

When you purchase the goods from source factory, you inquire the quotation.
Then the factory provide the price which is much more than the market.
You confused and asked the reason. Why that situation happened?

I am Alice who is expert in making socks. Let me tell you all the reasons.

You know, the factory focus on production, they have not enough time to deal with your order when your order can not meet their MOQ( Minimum order quantity) or very complicate.

The trading company focus on sale, they accept small and complex order quality for you. If you are lucky, you can get the price cheaper than the factory.

The reason is below:

1. Factory person not trust for you, they not sure you are competitor or not.

2. Factory have their own MOQ, satisfy enough quantity can put into mass production, they not accept small order. Because small order will cost high labor, waste a lot of time and the raw material, all that loss will increase the cost. General speaking, our socks MOQ is 1000 pairs/ color. If less than 1000 pairs, the wasted raw material will be added to your price.

3. There is one misunderstanding, even you satisfy the MOQ, you still can not get good price, because the factory production need very big quantity to support the production. You thought your order are big. Actually, the large orders from the factory and those mentioned by the customers are not the same concept

4. If you do not have enough sourcing experience, factory will difficult to communicate with you. Of course, you don’t know how to control the quality.


5. When you would like to make samples from factory first time, even you pay the sample fee, they will reluctant to help you, because they focus on production, making samples will waste their time. Cost same time focus on production they can produce more goods, and generate greater benefits. So please cherish the person who sets a sample for you.
6. The last reason is the factory usually willing to cooperate with trading company, because they can get stable order all the year, that is why the price is much competitive.


However, If you satisfy below conditions, you can purchase and consider the factory service.

1. You have long-term order and satisfy the big quantity all the year.
2. You are also the expert of the goods you are purchasing. And you have purchase experience in China.
3. You have your own company which can help you clear the goods in your port.
4. You know how to import the goods in China.

We have our own factory, however we can not produce all the socks products, that is why we set up our own trading company which help customers purchase and custom other socks at the same time. Because we are professional to deal with the order of socks. Such like inspection, control the quality, push the production, responsible for shipment, deal with all kinds of custom documents ect.


Practical Tips

1. Small/trial orders: Prioritize trading companies to reduce trial costs.

2. Large/long-term orders: Verify products through trading companies first, then switch to direct factory cooperation for cost savings.

3. Hybrid model: Source core products from factories and auxiliary materials/small parts from trading companies, balancing cost and efficiency.