How a trading company works
A trading company buys from factories at a wholesale price and resells to you at a marked-up price, taking on inventory risk in exchange for margin. You typically won't know which factory actually made your order, and negotiating leverage sits with the trading company, not you.
How a sourcing agent works
A sourcing agent represents your interests directly with the factory, usually charging a transparent fee or percentage on top of the factory's own FOB price. You see the real factory cost, and the agent's incentive is aligned with getting you a good outcome, not maximizing their own resale margin.
Where each model makes sense
Trading companies can work well for smaller, standardized orders where speed matters more than unit cost. Sourcing agents tend to make more sense for custom specifications, larger volumes, or ongoing relationships where quality control and factory-direct pricing matter over time.
What to ask before committing to either
Ask directly: will I see the factory's FOB price, or only your resale price? Who inspects the goods, and who do they report to? Who's responsible if the shipment fails inspection? The answers tend to make the trading-company-versus-agent decision obvious fairly quickly.