Picking the best marine supplier from the best marine equipment producer in the world is undoubtedly a hard task to do.
In China, you have a variety of worthy choices to choose from, but the best one out of the best should always stand out.
In this blog, we will tackle the difference between a factory and a trading company as we determine which should you choose to pick your best Chinese Marine Supplier.
Marine Equipment Factories
First, we must identify what is a factory.
- The Chinese factory is just as you imagine: it is a factory that produces some equipment.
They usually have some type of facilities to produce these items, although the complexity of these machines can vary greatly.
For example, suppose a marine windlass and marine winch manufacturer can only use sewing machines as its main machine, while a metal counterfeiting factory has more complex and expensive machines.
Factories almost always focus on specific types of products and materials; that is, windlass and winch factories do not also produce marine diesel engine products, because each product has completely different machinery and skills.
- Factory prices are often lower than those of trading companies
You had better control your products as you can directly contact the factory responsible to produce the products.
However, the factory’s product range is much smaller.
- Generally, factories can offer better prices than commercial companies.
The factory controls raw materials, production, and technology, while trading companies buy from the factory and add their commission to the factory price.
So, if the trading company does not have a competitive supply chain (in some cases, its cooperative factories may provide the trading company with very competitive prices.
So even if the trading company adds a commission, the price is still competitive) and compared to other factories, this is rare, but it may happen.
- Factories have professional technology and product knowledge.
Most procurement projects are actually very simple, but when developing new technologies and/or trying to customize your products, factories understand your needs better than commercial companies.
- Manufacturers are generally regarded as the best and only source of their products.
You can communicate your needs directly with them, if they are the right factory for you, they will have rich experience in the manufacturing process.
The factory will manufacture products according to your specifications and the tolerances you require. The factory you choose may have been producing similar products for some time; you do not want a smartphone case factory to make smartphones!
- Cost is often the main reason people go straight to the factory,
Because people usually think they will get the best price on this route.
A factory is an individual or group that serves as a source of goods and services.
The supplier provides the manufacturer’s product, and sometimes the manufacturer and supplier are the same.
Suppliers work with distributors and wholesalers to provide them with the products they need.
Without a supplier, no retailer can source the products it wants to sell.
If a company decides to run a wholesale business or become a B2B company, it may be working with suppliers.
If you work with suppliers, you will be less likely to sell products directly to consumers.
4,444 factories can manufacture or produce goods, but do not have the resources or channels to sell them directly to retailers or their customers.
On the other hand, distributors have the right marketing channels and capabilities to distribute their products to wholesalers and sometimes directly to retailers.
Factories are central to the distribution process, ensuring that other parties get the goods or services they need.
The supplier is at the top of the supply chain and there is usually at least one middleman between the supplier and the retailer.
The product cannot be taken out after being produced or packaged in the factory, so the dealer’s help is needed to take it out.
Next, let us identify what a trading company is.
- Business enterprises do not produce any good.
Instead, they source multiple products from one or more factories (usually working with numerous factories).
They are like the distributors or wholesalers we imagine in the West, but they are not the same.
Their most notable advantage is that they can offer a variety of products.
- Trading companies have better customer service than factories.
A trading company tends to work closely with many factories, and the relationship is excellent.
They pass on these relationships to you to add value to your customers.
When the factory does not do this, they are willing to redouble their efforts.
If you want to get multiple items for a product, they can help you.
If you need special packaging or unique labels, commercial companies can help you.
- Trading companies deal with smaller factories.
It means cooperating with factories whose prices are lower than some of the easy-to-find online competitors.
Commercial companies have minimal management costs so that they can offer lower prices.
Your profit margin is sometimes as low as 0.5%.
Rents in China are cheap, and commercial risks do not need to be great.
- The trading company acts as a middleman between you and the factory.
They work with the factory to produce your order, and in return, they make a profit by billing you a certain part of the order.
A good trading company will ensure that all products produced by the factory meet their standards so that they can continue to earn money.
- Many trading companies have long-term cooperative relationships with factories, so they understand each other’s capabilities.
Trading companies can reasonably guarantee the quality of finished products.
They can visit the factory for product inspections and verify orders.
If they do not have their staff, they can even go the extra mile and bring in external QA professionals for inspections.
Delegating this responsibility to the factory can be very problematic, and the final cost is very high.
- Chinese education is getting better.
Most factories currently have 4,444 in-house sales staff capable of communicating with foreign customers.
But even with bilingual employees, there are still cultural differences and communication gaps, which can sometimes lead to disastrous results.
For example, when a Chinese sales representative talks to a factory manager, cultural norms require that employees listen to the boss without question.
The trading company is technically a customer of the factory.
Therefore, it is often easier for a commercial company to communicate the requirements and expectations of its product to the boss than to the sales representative.
You may have a unique product that requires you to communicate specifications directly with the factory. If not, likely, a commercial company has already processed the product or similar products. If buying through a trading company, many buyers can benefit from better communication.
So, what to choose between the two in buying your marine supplies from China?
Let us go straight and say it with us: Trading Companies.
Companies like Taizhou Hicool Machinery Co., Ltd filters the best out of the best products from factories so you could purchase only world-class quality marine products.
Although factories are indeed vital in producing a mass number of products, trading companies ensure the quality of those delivers when they go out to the world market.
Buying the best marine supplies from the best Chinese marine supplier is difficult, but now you know what to choose.