China. Hearing this country name, people will think of opportunity. What products can I source from China, what business can I make there, what business opportunity can I have there, etc. On the other hand, people also know, the challenge is not easy. Many scams, tricks, and other things happen, moreover the language is also hard to be learnt! But, don’t worry, the good thing is, every problem, every challenge, has a way out. Hope this article can help you 🙂
Set Your Mind Set
Try being radical… A writer says, “When buying from China, adopt the mindset that everything will go wrong, until the opposite has been proven.”
I do agree with that mindset. I don’t wanna scare you, but based on our team’s experience in handling our customers, many bad things do happen when doing product sourcing in China. Even our project managers, who are responsible to manage the inspection and get contact with the suppliers, often get mad with the suppliers because what they say is different with the reality.
But, once again, every problem has their way out 🙂 Let’s stay positive!
Here are the 7 steps that you can try from the start to prevent any scams when sourcing in China:
1. Supplier Screening
Avoid choosing the wrong supplier from the start! Wrong supplier means scammer and other forms of unqualified suppliers. They are suppliers who are unable to ensure compliance with local regulations and your own quality requirements.
Keep in mind that pricing is not the only different factor between suppliers. These 6 points are the main point when you choose your supplier’s credibility:
1. Registered Capital
2. Business Scope
3. Compliance with overseas regulations and standards (e.g., REACH and ASTM F936)
4. Quality Certification (e.g., ISO 9001:2008)
5. Buyer References
6. Bank Account Status
(see our Supplier Audit services here)
After this stage, maintain contact with as many suppliers as possible, at least 3 to 4 times.
2. Ask for Product Samples
Verify the suppliers capability to match your quality requirements. A product sample can based on an original factory design, with or without branding. The purpose is to verify whether the supplier is capable to deliver what you want or not.
3. Sign a Sales Agreement
This is very very important, but most of the time, this term is forgotten or underestimated by people. Prevent quality issues before they occur. The biggest source of quality issues is miscommunication about quality requirements and the supplier capability to comply.
Make it clear and detail. Sales Agreement must be signed and stamped by the legal representative, and automatically it gets serious attention from the higher levels of the company. The purpose of the Sales Agreement is to communicate your product related requirements, and not only that, it will take action if the supplier for any reason fail to comply.
4. Paying suppliers
Keep note to never pay everything in advance. The key is you must give the supplier an incentive to follow your instructions. How and when, the supplier is paid is the incentive. Think of it as don’t waste your bullets!
Actually, Chinese suppliers are much easier to deal with as long as they have something to gain, of in other words, money! The secret it selling the goods on the domestic market is not a good option for the supplier. Please keep in mind, don’t settle the payment until quality and regulatory compliance is verified.
Inspection is also an important issue here. Use the third party inspection company or maybe if you have your own engineer who can check send him! The reason is to be objective, not to be subjective. On the other hand, you also have your job! It’s your job to provide the inspection company with the complete information they need to properly carry out the inspection. It’s you, who define what quality is good or not, so define it properly to your inspection company!
(see our Inspection services here)
6. Laboratory testing
Verify compliance with all applicable regulations, before shipment. There are a several things that cannot be seen or checked during the inspection, therefore you need a lab test. Moreover, inspection is done by checking several batches of your products, NOT ALL (check this article to find out, why don’t we inspect all of your products). You can ask the inspector to randomly pick your product to be tested on lab. When it is tested on lab, it will give you more insight whether your products are based on your requirement or not. Why can lab test give you a broader insight? Your products are manufactured in bulk. If 1 product is tested on lab and it is found that, e.g the materials do not comply with what the supplier told you firsthand. It means that, all of your products have the same problem!
(see our Laboratory Testing service here)
7. Use High quality Export packaging
You are about to reach the finish line, make sure you don’t fall at the finish line. Every layer of business wants to minimize cost. Chinese suppliers tend to use cheap and substandard packaging materials, and you know the outcome, right? But, you can provide them clear packaging requirements. It is as important as the quality requirements for the product itself. I give you some points for a better packaging:
1. 5 layer export cartons
2. Wooden freight pallets
3. All cartons strapped to the pallets
4. Plastic wrapping around all cartons
5. Freight remarks for easy identification (destination, importer, product, HS code)
And don’t even believe your supplier provide them, unless you check them! You can go for a Container Loading Supervision as your final check before your product go to your hand!
(see our Container Loading Supervision service here)
Sourcing in China may be challenging. But, I believe nothing is impossible. We need courage and perseverance to try and try all over again. I hope that this article can help you, best of luck 🙂
Adopted from China Importal