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China Product Sourcing. How To Check On Your Potential Supplier.

Posted in China Business

Had a long conversation with a client this morning about what we as China lawyers can do to quickly and cheaply try to figure out whether a China manufacturer is on the up and up. This below is essentially a rehash of that conversation as it is a list of the steps we typically take to smoke out the fake manufacturer or a broker claiming to be the manufacturer.

1.  A Chinese language internet search. This oftentimes is enough to determine that the company is not likely to be real or that if it is real, it is not a good company with which to do business. It is amazing how often the fake China company has a website in just English, with no Chinese. This is a tell. We also sometimes can learn a lot by

2.  We call the phone number on the Chinese company’s website and/or send a fax to the fax number, to see if those check out. If they do not, we have learned a lot.

3. We search government records to make sure that the company is actually registered. Depending on the town in which the company is located, this is not always possible, but most of the time it is. Some people simply ask the Chinese company to provide its business license, and that no doubt can be helpful. But we have seen so many fake licenses that we usually prefer to simply bypass that and go right to the government source.

4. If the company registration checks out, we send someone to look at the factory to make sure that it is still there and, if possible, ask people in the area about that factory.

The above will not definitely tell you that the factory produces good product, but it will at a very low cost increase your odds. If more is needed either because our own research is inconclusive or because so much is at stake, we bring in a consultancy specialized in China due diligence.

What do you do to scope out your China manufacturers?

  • http://jacobyount.com/ Jacob Yount

    Gauge their response time and eagerness to communicate. As you said making a phone call or sending a fax (best case is Chinese-speaker on your own team to the production facility in question ).

    One thing for buyers to remember is that if the Chinese company’s communication is sparse and they don’t seem to eager to reply back, that may mean they simply don’t want your business. Perhaps their capacity has maxed out or they are simply not interested in serving you. I’ve seen buyers push factories to take their work, the factory did reluctantly and it led to poor production quality. A factory’s acceptance of a buyer’s business is not necessarily saying they will do a quality job.

  • On the Corner

    One of the easiest ways to check on a factory’s quality is to look at other products they are making in the factory and then contact the company sourcing with them already to ask questions about the professional level of the factory and their satisfaction with the product.