Factory method for objects - best practice?

This is a question regarding the best practice for creating an instance of a class or type from different forms of the same data using python. Is it better to use a class method or is it better to use a separate function altogether? Let's say I have a class used to describe the size of a document. (Note: This is simply an example. I want to know the best way to create an instance of the class not the best way to describe the size of a document.)

class Size(object):
    """
    Utility object used to describe the size of a document.
    """

    BYTE = 8
    KILO = 1024

    def __init__(self, bits):
        self._bits = bits

    @property
    def bits(self):
        return float(self._bits)

    @property
    def bytes(self):
        return self.bits / self.BYTE

    @property
    def kilobits(self):
        return self.bits / self.KILO

    @property
    def kilobytes(self):
        return self.bytes / self.KILO

    @property
    def megabits(self):
        return self.kilobits / self.KILO

    @property
    def megabytes(self):
        return self.kilobytes / self.KILO

My __init__ method takes a size value represented in bits (bits and only bits and I want to keep it that way) but lets say I have a size value in bytes and I want to create an instance of my class. Is it better to use a class method or is it better to use a separate function altogether?

class Size(object):
    """
    Utility object used to describe the size of a document.
    """

    BYTE = 8
    KILO = 1024

    @classmethod
    def from_bytes(cls, bytes):
        bits = bytes * cls.BYTE
        return cls(bits)

def create_instance_from_bytes(bytes):
    bits = bytes * Size.BYTE
    return Size(bits)

This may not seem like an issue and perhaps both examples are valid but I think about it every time I need to implement something like this. For a long time I have preferred the class method approach because I like the organisational benefits of tying the class and the factory method together. Also, using a class method preserves the ability to create instances of any subclasses so it's more object orientated. On the other hand, a friend once said "When in doubt, do what the standard library does" and I am yet to find an example of this in the standard library.

First, most of the time you think you need something like this, you don't; it's a sign that you're trying to treat Python like Java, and the solution is to step back and ask why you need a factory.

Often, the simplest thing to do is to just have a constructor with defaulted/optional/keyword arguments. Even cases that you'd never write that way in Java—even cases where overloaded constructors would feel wrong in C++ or ObjC—may look perfectly natural in Python. For example, size = Size(bytes=20), or size = Size(20, Size.BYTES) look reasonable. For that matter, a Bytes(20) class that inherits from Size and adds absolutely nothing but an __init__ overload looks reasonable. And these are trivial to define:

def __init__(self, *, bits=None, bytes=None, kilobits=None, kilobytes=None):

Or:

BITS, BYTES, KILOBITS, KILOBYTES = 1, 8, 1024, 8192 # or object(), object(), object(), object()
def __init__(self, count, unit=Size.BITS):

But, sometimes you do need factory functions. So, what do you do then? Well, there are two kinds of things that are often lumped together into "factories".

A @classmethod is the idiomatic way to do an "alternate constructor"—there are examples all over the stdlib—itertools.chain.from_iterable, datetime.datetime.fromordinal, etc.

A function is the idiomatic way to do an "I don't care what the actual class is" factory. Look at, e.g., the built-in open function. Do you know what it returns in 3.3? Do you care? Nope. That's why it's a function, not io.TextIOWrapper.open or whatever.

Your given example seems like a perfectly legitimate use case, and fits pretty clearly into the "alternate constructor" bin (if it doesn't fit into the "constructor with extra arguments" bin).