The trade company is specially dealing with the selling and buying of the products, what matters greatly is information and business channel. It is clear to all that if you directly purchase from factory, the cost will be necessarily lower that from trade company. As a matter of fact, a great number of people purchase directly from Trade Company even though at a high cost.  Why is it so ? 

Next I will provide the advantages of registering a foreign trade company.

1. Cost: Although the purchase price from the factory will be lower than that of the trade company, a customer always requires a variety of products. And sometimes it is difficult for a same factory to meet all the needs. In order to meet their own needs, he should equip himself with sufficient manpower, be more familiar with different products and deal with different factories. This actually increases his labor cost and offsets the benefits from the low-cost procurement. And the cost of capital and time increase substantially.

2. Risk: As a customer, he needs a stable supply channels, after all, he is not a direct consumer (final consumer), so he must be able to carry out the normal procurement to ensure normal supply (to the customer's home)at any time. If the client directly procedure from the factory, once the plant is there, he will face with the problem of how to find a replacement. It is not easy to find a suitable replacement, but also takes time and manpower, which would cause a deviate of the whole supply chain. But if procedure by the trading companies, it certainly be more stable and less risk.

3. Market Order: Everyone knows that ecosystem balance should be ensured in order to keep development; otherwise there will be big problems. As we know, many of the customers in domestic procurement are middlemen, rather than direct users. Why don’t foreign direct users purchase straight in domestic market? Mainly because of the two reasons mentioned above, along with such chain under stable operation as “plant-trading company-middleman-direct user”, which is formed in the long history of business. Customer itself is unwilling to destroy the structure for the unstable factors arising therefrom, as the formation of new chain needs much time and money.

4. The difference of service awareness: the trade company has been engaged in foreign business for a long time, and accumulated lots of experience that most of factories lacks in.