We identify potential agents or suppliers based on a quick and subjective screening.
The key, before this service is launched, is to define the profile of the “ideal agent or supplier”.
This information will orient our research, but the goal is to get a first list to work on.
SCREENING OF POTENTIAL CHINESE AGENTS or SUPPLIERS
The objectives are:
(1) to eliminate all obvious misfits, and
(2) to get down to a short-list of most suitable candidates.
FINAL VERIFICATION OF CHINESE AGENTS or SUPPLIERS
This final stage of agent or supplier qualification has to be tailored to the client’s needs. It is a function of the results of the identification and screening processes, but also of the exporter’s / importer’s particular situation. We offer two types of services, depending on the seller’s / buyer’s needs:
1. Facilities & Operations Check
2. In-depth audits:
NOTE FOR FOREIGN IMPORTERS:
SOME OF THE RISKS OF DEALING DIRECTLY WITH CHINESE SUPPLIERS
1. PRICE INCREASES AFTER DEPOSIT IS TRANSFERRED
The supplier quotes a price, gets an order and a cash deposit, and then tell the buyer the price has increased. If the buyer asks for reimbursement of his deposit, it is denied because “it was already used for purchasing the materials for your production”.
2. PRICE INCREASES UNFAIRLY FROM ONE ORDER TO THE NEXT
In most cases, suppliers simply say “material costs go up, and labor costs go up, and the exchange rate goes up, so the new price is XX USD”. They do not want to give more data that could allow the buyer to challenge their calculations.
3. LACK OF RELIABILITY: LATE DELIVERIES, INCONSISTENT COMMUNICATION
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Shipment delays announced at the last minute, even though production managers could see it coming 2 or 3 weeks before.
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Consistent over-optimism, which means consistent disappointment on the buyer’s side.
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Lack of respect of contracts in general.
4. INABILITY / UNWILLINGNESS TO REACH DESIRED QUALITY STANDARD
Some importers are flexible with quality. Give them a discount when you mess up, and the business relationship is maintained.
Others are not (if quality is below a certain standard, products CANNOT BE SOLD AT ALL in their distribution channel).
5. NON-RESPECT OF IP RIGHTS
For example, an importer asks two Chinese manufacturers to develop a new design. But only one gets the order. Here are two ways this can go wrong:
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The manufacturer that gets the order might try to produce the same design and sell it to other customers.
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The other manufacturer feels that he can do what he wants with the design. Since he did the hard work of developing prototypes, he will try to make money out of them through sales to other customers.
6. LACK OF TRANSPERENCY
The two most frequent cases where lack of transparency hurts the importer are as follows:
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Subcontracting production to a small workshop in order to cut costs (and without regard to quality requirements);
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Changing a component, a packaging accessory, or a process step.
At least 95% of the time, the importer is not informed.
FOR FOREIGN IMPORTERS:
HOW TO AVOID CHINESE SUPPLIER SCAMS
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If you cannot visit the Chinese supplier, pay for a factory audit or for a background check.
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Avoid suppliers that don’t use a company email address. Some legitimate suppliers use @yahoo.com.cn or @163.cn addresses, but generally it is not a good sign.
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Call the number you see on their website and ask to talk to your contact (bad sign if you try 3 times and they never understand your English).
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Google [the company’s name + scam]. If you find several complaints from other buyers, be careful.
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Only wire money to a company account.
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Appoint a reputable and trustworthy sourcing company
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