Trading company posing as a factory
Updated: 2026-08-31
A buyer was quoted factory-direct pricing from a company whose English site claimed manufacturing. Verification showed the registered entity was an import-export trader, not a licensed producer.
Problem
The buyer found the supplier through a sourcing platform. The English website used the words factory and manufacturer, and the quoted price was below the market rate. The contract was drafted with the trading arm.
Investigation
- 1. Matched the English company name to the Chinese registered name on the business licence.
- 2. Checked the business scope: the entity was registered for import and export, with no manufacturing licence.
- 3. Confirmed the registered address was an office building, not a production site.
- 4. Found a separate licensed manufacturer entity operating at another address, likely the actual production source.
Findings
The buyer re-contracted with the licensed manufacturer entity, moved the deposit behind a document verification and a follow-up audit, and avoided paying a trading margin on top of factory-direct pricing.
- ·Registered business scope covered import and export only, with no manufacturing licence.
- ·Registered address was an office floor, not a production site.
- ·A separate licensed manufacturer at another address was the likely production source.
- ·No document evidence linked the quoting entity to any production line.
Risk score
Indicative score before the work described above. Higher score means lower risk. This is an illustrative figure for the example, not a real verification result.
Recommendation
Re-contract with the licensed manufacturer, keep the deposit behind a document verification, and add an on-site audit before the first shipment.
Related guides
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