Legal analysis: First-level authorization with the trademark holder as the source refers to the trademark owner directly authorizing merchants to sell their branded goods.

Legal basis: Article 43 of the "Trademark Law of the People's Republic of China" A trademark registrant may license others to use its registered trademark by signing a trademark license contract. The licensor shall supervise the quality of the goods used by the licensee using its registered trademark. The licensee shall ensure the quality of the goods using the registered trademark.