Factory vs trading company: who are you really buying from?
Updated June 2026 · by OpenQuote, on the ground in Yiwu, China
30–50% of “factories” on Alibaba are traders who buy from the factory and resell to you. Tell them apart by asking for factory photos/video, customization, MOQ and a real address. To get the factory-direct price, the surest way is to have someone check in person.
Get the factory price · US$29Three roles, big price gaps
- Factory: its own production line, can customise, higher MOQ, lowest price.
- Wholesaler / booth: most Yiwu booths — lots of stock, low MOQ, good for small mixed batches.
- Reseller (middleman): no production, just flips goods at a margin — highest price, the one to avoid.
How to tell them apart
Ask for factory photos/video, whether they can customise, the real MOQ, and their address and license. Vague answers, “everything is possible,” and only stock photos usually mean a middleman.
Why it affects your price
Every middleman adds a markup. You think you found the factory, but you may be one or two traders removed — overpaying for nothing.
How to get the real factory price
It’s hard to confirm online. The surest way is to have someone go and look — at the booth/factory, telling the roles apart and getting the real price. OpenQuote checks 1 product with 2 real suppliers for US$29 and sends on-site proof.
Frequently asked questions
How do I know if it’s a factory?+
Ask for factory photos/video, customization, MOQ and a real address. Stock-photo-only sellers who can’t show the factory are usually traders.
Is a factory always cheaper?+
Usually, but factories have higher MOQs; for small batches a booth/wholesaler is better. The key is not adding an extra middleman.
Are Yiwu booths factories?+
Most are wholesalers/booths, with some factory-direct sections — low MOQ, good for small batches; which one is the factory is clear on the ground.
How do I get the factory-direct price?+
Have someone verify at the booth/factory. US$29 checks 1 product with 2 real suppliers and on-site proof.