Locating Safe Suppliers in China
By Ron Cune
There are numerous negative stories circulating about doing business with Chinese companies. Some business people let themselves be influenced by these tales and based on the preconception formed they decide not to go to China, referring to the country as the “Wild East”.
We have firsthand experiences with companies that have no intention of achieving a win-win situation. Unfortunately, it is difficult to achieve things via legal channels in China. In addition, the contact may, after seizing his chances, simply disappear.
Taking great risks can be avoided by a more conservative attitude when meeting a new company. Firstly, it is of importance to analyze how the contact between you and the future partner came about. In case the contact was established via internet or a meeting at the stock exchange, instead of via an existing reliable relation, caution is advised.
For most people, the first step towards analyzing reliability is a visit to Google. If the name of the company yields no results, there is always the possibility of basing the search on the company’s phone number.
When this yields no results either, or when the website of the company is not convincing enough, a phone call to the general number is advisable. In this case, it is wise to let the call be made by a Chinese speaking individual. A reputable organization will, even in China, have a receptionist who, during normal working hours, can connect your call to different departments. In case the phone is not answered after consecutive attempts, it can be construed as a bad sign.
Should you be able to make contact, ask after the sales department and explain your situation. General information, references, business licenses and payment processes are readily available in companies with nothing to hide.
Finally, untrustworthy companies can easily be recognized considering that they are often (too) quick in offering an extremely attractive business proposal.
If it appears to be too good to be true, it usually is.
Ron Cune, Dragondancers
September 30th, 2008 at 1:29 pm
Great advice. It is amazing how many times I have been called by someone wanting to sue a Chinese company that never even existed.
September 30th, 2008 at 4:38 pm
http://www.chinawhys.com/
I recommend to visit this website when you want to know more about business risks in China, or when you have experienced troubles.
Mr. Peter Humphrey is the founder and senior adviser of ChinaWhys. He has spent more than 30 years dealing with China and Eastern European countries. After two decades as a foreign correspondent in Asia, Eastern Europe and the Balkans, he has spent the past 10 years as a risk management specialist focused on white-collar crime prevention, fraud investigation and crisis mitigation for multinationals in Asia.
I once met Peter in London, he might still remember my name “Ryan Zhao at Golden View” when you write him. I hope you don’t have the real need to contact Peter…
Regards,
Ryan Zhao
ryan@gvlocalization.com
October 1st, 2008 at 1:56 pm
Nice post - I’m consistently amazed at buyers who jump into business relationships with Chinese based suppliers having performed many times no due diligence at all! One note here is that if you are seriously looking at getting into business with an individual or organization overseas there is absolutely no substitute for hiring a 3rd party quality and investigation company to perform an on-site evaluation on your behalf. More on this type of service here: http://www.intouch-quality.com/services/supplier-identification-and-evaluation/
October 7th, 2008 at 11:38 am
Living in Beijing I know and would certainly recomend Peter Humphrey. A real professional.
If you are at the enquiry stage, or even more entrenched, also take a look at our website www.spearheadchina.com . I can assure you it will do you no harm
October 8th, 2008 at 1:41 am
It would be more safty to hire 1~2 professionals located in China to help your business, or via the 3rd party to start complete new business with new suppliers. You maybe know some “cheat” companies already are with attractive website, nice phone answer .
October 15th, 2008 at 8:30 am
Dears
As per my experiance working with China, I suggest as under:
1. Don’t beleive any one. Pick up the suppleirs of your own through various websites of such Chinese companies (some of them may never exist beyond one person who would be cheat).
2. Go to China, check your self, see the product, choose its quality and give order.
3. Once the order is ready, go the respective factory yourself again and check the quality of goods, if its OK. pack them in front of your eyes, seal the contaienr with your seal and see this container seal at the time of custom in your country. If the seal is not as per your expectation, refuse the goods. Mention in your order and LC this clause.
This is hard I know but there is know alternative to this. I know it involves money, time and if you add that to the actual price you are paying you may find the goods expensive than your recent purchases from other countries.
Another way is to locate a clean person who charge resonably and source and gurantty your quality and would be willing to reimburse your expenses in case quality is off, when recived.
I am an Indian and we have learnt this hard way with our 14 years of sourcing and now manufacturing in China. Based on that we now help fellow business people also against a fee.
Oh China ????
RAJEEV
Email: chemtel@vsnl.com