#7 Not Knowing Who's Who
It is common practice for trading companies in China to represent themselves as owners of the factory. This can even happen during a tour of the factory as it will appear the trading company representative has an office there and that everyone knows them. Don't be fooled. Trading companies represent the interests of the factory, not the potential customer.
If you don't know whether you are dealing with a trading company or the actual factory you break one of the main rules of negotiation - know who you're dealing with and what authority you have. Trading companies will agree to everything only to come back later and change the agreement. Try to work with decision makers, which means either with a factory or a service organization that is upfront about who they are and what services they provide.
Ways to know who you are dealing with include asking lots of open ended questions, reviewing the product line of the company (trading companies offer wide ranges of items - many more than one factory or a group of factories in one market could offer), and asking for references. However, the best way to evaluate who's who is to visit for yourself or deal with someone who's on-the-ground in China to work for your interests.
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