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Trading Company, Agent or Production Office: Who Does What
What is a trading company, and is the person answering your emails actually running the factory? Behind the word “supplier” sit four different businesses, paid by different people for different results. Knowing which one you are talking to changes how you read every quote, every sample and every dispute. Here is the vocabulary, in plain terms, and the questions that reveal the model.
The trading company buys and resells
A trading company buys production from factories it knows and resells it to you. Its margin sits inside the price, invisible, and the factory’s name usually stays confidential: that relationship is its business. The difference with a manufacturer holds in one sentence: a manufacturer runs production lines, a trading company sells capacity it does not own. That is not a scam, it is a trade; the problem starts when it presents itself as the factory.
The agent takes a commission on the factory price
A sourcing agent introduces you to factories and earns a commission on the order value. The incentive follows the volume that flows, not necessarily the quality that ships. Some agents are also paid on the factory side; the only way to know is to ask, in writing. A good agent opens real doors. What an agent does not do is stand on the line and look at your product with your eyes.
The buying office serves the retailer
A buying office is the sourcing arm of a large retailer: it consolidates huge seasonal programmes, negotiates on weight and imposes its own standards. An independent brand simply does not get access to one, but the term keeps appearing in conversations and feeds the confusion with the three other models.
The production office works for the brand
A production office is paid by the brand, with a disclosed fee, and picks the workshop in the brand’s interest rather than its own margin. You know the factory’s name, you can visit it, the relationship belongs to you. That is our model at Lebrun Production: development, in-line follow-up and on-site quality control for brands that want to own their product without building their own team in Asia.
CMT, FOB and full package: what you are really ordering
The commercial model combines with a production model. In CMT manufacturing, cut make trim, you supply the fabric and the workshop cuts, assembles and finishes. In full package, the partner owns the whole chain, materials included. A trading company sells full package by construction; a production office lets you choose model by model, depending on the product and on how much fabric risk you accept to carry.
Who owns the defect when it ships
This is the question nobody asks before the first problem. With a trading company, your contract binds you to the reseller, not to the factory: your recourse is worth what their margin is worth. With an agent, the contract is usually signed directly with the factory and the agent carries no product liability. A production office deals with the defect upstream, during production, while fixing is still cheap: the whole difference between recording a failure and preventing one.
Three questions that reveal the model in one call
One: can I know the factory’s name and visit it? Two: how are you paid, and by whom? Three: who signs the quality standard, and who is liable if the final inspection fails? The four models answer these three questions differently, and an evasive answer is already an answer.
When a trading company is still the right answer
For a re-order of simple accessories, a category you do not need to control technically, or a volume too small to interest a factory directly, a serious trading company is often the fastest route. The moment construction drives the value of the product, canvassed tailoring, technical outerwear, you need a partner who is paid to watch the line with your eyes.
FAQ
What is a trading company in garment sourcing?
A company that buys production from partner factories and resells it to brands, margin included in the price. It carries the order but does not manufacture, and the factory’s name usually stays confidential.
What is the difference between a trading company and a manufacturer?
A manufacturer owns and runs the production lines. A trading company sells capacity it does not own and sits contractually between you and the factory. Asking for the factory’s name and a visit is usually enough to tell them apart.
What is a sourcing agent, and how is one paid?
An intermediary who introduces you to factories for a commission on order value. Ask in writing whether they are also paid on the factory side: the answer defines how much weight their recommendations can carry.
What does CMT mean in manufacturing?
Cut, make, trim: the workshop cuts, assembles and finishes garments from fabric you supply. You carry the fabric risk and keep control of fabric sourcing; the full package alternative hands the whole chain to the partner.
How do I know if my “factory” is actually a trading company?
Ask for the legal name of the production site, a recent audit report and a visit. A refusal, or a vague answer to any of the three, is the most reliable signal. A production office on the ground can verify it in days.
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