Real factory or middleman? 5 checks before you pay a deposit

Many suppliers you find online say they are a factory. Some are. Others are trading companies or buying houses that pass your order to someone else. The sourcing platform SourceReady lists traders and brokers posing as manufacturers among the common problems buyers face.

Why does it matter who you are paying?

Middlemen are a normal part of this trade. One industry leader estimates that about 70% of factory orders in Bangladesh come through buying houses (2025). A buying house is a local firm that takes orders from foreign buyers and places them with factories. A good one saves you time and speaks the factory’s language.

The risk is a middleman who pretends to be the factory. Then you cannot see where your goods are made, you do not know who controls quality, and the price hides a margin nobody told you about. The five checks below help you find out before any money moves.

The five checks at a glance

Check	What to ask for	Red flag
1. Licence and membership	Trade licence and BGMEA or BKMEA membership number	The association cannot confirm the number or the name
2. Accord list	The factory’s entry on the International Accord’s public list	Not listed and no explanation, or low remediation progress
3. Live video	A live call from the gate to the sewing floor	Only recorded videos or photos
4. Bank account	A company account in the same name as the invoice	A personal account or another company’s name
5. Subcontracting	The address where your order will be sewn, written into the contract	Vague talk of a “partner unit”

How do you run each check?

1. Trade licence and association membership. A trade licence is the basic local permit a Bangladeshi business needs to operate. Export garment factories are typically members of BGMEA (Bangladesh Garment Manufacturers and Exporters Association) or BKMEA (Bangladesh Knitwear Manufacturers and Exporters Association). BGMEA has about 2,200 active members and BKMEA about 800 (September 2026). Ask for the membership number, then confirm it with the association directly. Use contact details from the association’s own official website, not details the supplier sends you.

2. The International Accord’s public list. The International Accord is a factory-safety agreement signed by 203 global brands by September 2024. In Bangladesh, the RMG Sustainability Council (RSC) inspects the factories those brands use. The Accord’s public factory list (data as of 30 June 2026) shows each factory’s remediation progress, meaning how much of the safety work found in inspections has been fixed, with inspection reports to download. The limit: the list covers factories that make clothes for signatory brands. A small factory that has never supplied those brands may be missing. Treat absence as a reason to ask more questions, not as proof of fraud.

3. A live video walk-through. Ask for a live call, not a recorded video. Ask the person to walk from the gate, past the company sign, through cutting and onto the sewing floor while the lines are running. Recorded videos can come from any factory. The limit: a broker can still walk you round a friend’s factory, which is why checks 1 and 4 matter. For a check on site, one inspection firm, V-Trust, publishes a rate of $268–298 per inspector-day in Bangladesh, and one firm promises a visit anywhere in Bangladesh within 48 hours.

4. A bank account in the company’s name. The account name on the invoice must match the company on the licence and the contract. Never pay a personal account. Bangladesh’s rules expect export money to flow through the exporter’s own bank. Under Bangladesh Bank’s July 2026 export circular, an exporter may take an advance only against a firm contract or a letter of credit (among other conditions), must normally ship within one year, and must bring export money home within four months. A letter of credit (LC) is a promise from the buyer’s bank to pay the factory once it presents the correct shipping documents.

5. No hidden subcontracting. Subcontracting means the factory you signed with passes some or all of your order to another workplace. Hidden subcontracting has cost lives. In the Tazreen Fashions fire in 2012, 111–112 people died, and Walmart and Sears said suppliers had moved work there without permission. Ask which address will sew your order, write it into the contract, and ban subcontracting without your written consent. Then confirm it with an inspection during production at that address.

What if the supplier is a buying house?

That can be fine, as long as they say so. Ask them to confirm in writing that they act as an agent, to name the factory, and to let you run checks 2, 3 and 5 on it. Do not expect a factory’s BGMEA number from a buying house. In a 2017 fraud case, a BGMEA vice-president said buying houses are not BGMEA members, and the two firms involved were not members of the buying-house association, BGBA, either. Since 2019, garment buying houses must register with the Department of Textiles, and BGBA membership is needed before applying. Ask for proof of both.

Also ask how they are paid; our guide to buying houses sets out the usual ways they charge. FOB (Free On Board) is the factory price including loading onto the ship. For reference, one US Customs ruling records a commission of 10% of the FOB price paid to a Bangladesh buying agent.

What can these checks not prove?

They confirm who you are dealing with. They do not prove that documents are genuine or that bulk goods will match your sample. The Alliance for Bangladesh Worker Safety once blacklisted three factories for forging structural-safety certificates. For product certificates, ask for the certificate number and check it with the issuer, for example in OEKO-TEX’s Label Check tool, as a supplier authentication toolkit recommends. Make sure the company name and address match the factory. Quality needs its own steps: an approved, sealed sample and an inspection before shipment.

What this means for your order

Run all five checks before the first deposit, and keep every answer in writing. They belong in the first step of a first order from Bangladesh. If a supplier refuses a live call or asks you to pay a personal account, stop. Loom & Harvest does factory checks, sample coordination and inspections for fixed fees; you can send us the supplier’s details.