China sourcing as part of your strategic sourcing strategy

China sourcing can be very challenging. However, in terms of cost, international buyers simply cannot ignore the benefits of sourcing from China for products, suppliers, and raw materials.  But the fact that China is a developing country means scams are inevitable; the lack of understanding and knowledge of business ethics and culture can further increase the risks. Doing direct sourcing from China well does require entrepreneurs to conduct diligent research on how to avoid scams and find reliable China factories.

As a buyer, you may be asking questions like:

– Does the factory have product liability insurance?
– Can my supplier handle my engineering needs?
– How to ensure the seller won’t rip me off?
– What payment methods are safest?

How do you avoid scams and stay clean?

There are different ways and means of doing this and, as the decision maker, you have to keep your eyes and ears wide open before you commit your capital.

Here are some ways to avoid becoming a victim:

Verify the suppliers – One of the most cost-effective routes toward how to source suppliers from China is diligent research, either using major search engines or leveraging sourcing platforms. From the thousands of suppliers listed, you can filter the results and streamline the process of finding valid suppliers. You should look for a sourcing platform with a good reputation providing genuinely reliable information. Check out Supplierblacklist.com, which is a user generated list of bad suppliers in China.

Conduct site visits –While this can be quite costly, seeing how the factory operates firsthand before sealing the orders is always a safe play. To maximize cost-effectiveness, you can draw up a list of pre-screened suppliers and then arrange multiple visits for one single trip. Local intelligence and knowledge from some sourcing services can always be useful. We strongly advise you to do a factory audit before placing any orders. See more about supplier audits here.

Adopt an official payment gateway –Avoid using unofficial payment gateways like Western Union or individual accounts. Legitimate suppliers should have official bank accounts and follow the proper payment procedures and taxation requirements laid down by law.

Implement strict quality control – It is also important to examine your orders during and after production. Sending a QC representative from your company to the factory is the best way of executing this essential mission. Alternatively, hire someone you trust or any third party with the expertise to act on your company’s behalf. See more about inspection before, during and after the production here.

Join China sourcing events –There are many events or services that facilitate buyers and sellers meeting. These give you a chance to get to know more suppliers at one time and compare their backgrounds for further investigation. Starting the dialogue face to face also gives you a better idea of a supplier’s track record. Learn more about China’s biggest trade fair, the Canton Fair here, and about trade fair representation here.

Source: Tradegood

Check out also these articles related to scams when sourcing:

– China Law Blog writers stories about China Business Scams And How To Avoid Them

– A step-by-step guide of How to Avoid Scams, Middle-Men, and Fraud on Alibaba.

– Our previous blogpost about Mistakes when sourcing in China

See more at SBEInspection.com

Don't be shellfish...