Some of the world's largest factories are located in China. They are the dominant force in manufacturing across the board now. If you need infrastructure for your company OR run a wholesale business then considering sourcing from China must be on the cards. However, you must exercise caution. There have been numerous cases of fraudulent suppliers over the last decade. Even reputable factories are suffering email hacks where the hacker substitutes bank details. A few simple processes can avoid this but it is the experience that teaches us these things. Combined with a completely different culture, can make it extremely difficult to find a good supplier.
Why should you source from China?
Many people are concerned about sourcing from China. Mostly for fear of lesser quality or the unknown, many companies across the world have been reluctant to work with Asian countries such as China, but there are several compelling reasons why this practice has grown hugely in popularity over the past 20 years. Reduced costs and improved quality along with increased local competitiveness are primary advantages.
Reduced Costs
In general, manufacturing products in China is less expensive than in other countries. Chinese factories are frequently less expensive, product developers can get their products off the ground, into production, and onto the market much more quickly and effectively. It should be noted, however, that this is not universally true. Do your research because there are some cases where it is actually more cost-effective to produce the product closer to home especially if there is less labour required or the raw material is local to you. China’s buying power and increasingly skilled workforce is a major advantage.
Increased Local Competitiveness
Some businesses may choose to source some raw materials from their own countries while sourcing others from less-costly countries. It is critical to understand that not all products are suitable for production outsourcing to less expensive countries.
Be thorough when vetting Chinese factories for the production of your product. Inquire about their manufacturing process, current clients, quality assurance procedures, and so on. Your work does not end once you strike a deal and sign on the dotted line. Maintain a high level of quality control by requesting samples and ensuring that production runs on time. All of these tasks can be handled by a sourcing partner.
JOG International Ltd. is well well-versed in all aspects of sourcing products from China. Working with a reputable product sourcing and supply chain services company can help you accelerate the selection of the right supplier, negotiate the best price, and ship your order. JOG can help you and your supplier maintain open lines of communication by being involved in every step of production, ensuring your order stays on track.
Many successful companies that sell their own products seek sourcing and manufacturing solutions in China. However, given the market's competitiveness, they aren't overly eager to share information about their sources with other businesses, and it's understandable if you were perplexed about how to find your own reliable supplier. How can you tell if you're dealing with a legitimate operation without flying to China and inspecting the facilities for yourself?
Finding the right supplier is a difficult task, especially in the early stages. So this is a critical step. Luckily, JOG International Limited established a few steps you can take when examining potential sources that can help insulate you from scams and potentially fraudulent transactions and set you on a path towards dominating the market.
Search for the supplier
Search Google or Bing for “[company name] + scam,” “[company name] + dishonesty,” and a few variations. Other distributors and retailers who have had a bad experience with China wholesale suppliers frequently attempt to leave a trace about it on the internet. Many B2B marketplaces, such as Alibaba's, provide verification services, making it much easier to determine whether or not you can trust a particular supplier.
Furthermore, a Google search may yield information such as whether a supplier has recently participated in trade shows, which is a good indication that you are dealing with reputable China suppliers. Attending trade shows and renting a booth can be viewed as an investment in gaining new customers. Repeated attendance at trade shows also indicates that the supplier is serious about cultivating relationships with customers.
Check business licenses
Chinese suppliers must register with Chinese government officials and obtain a unique company registration number. It is too risky to continue doing business with a supplier who cannot provide you with a unique company registration number. Visit their local administrative government website or contact their local Bureau of Industry Commerce to verify the registration number.
Contact them by phone
Most scammers do not provide genuine registration information online in order to avoid being tracked down by law enforcement authorities. Call the listed phone number and ask for their registration and business license numbers.
Be wary if the only phone number they provide is a mobile number. A phone number that is not linked to a physical location could be a sign of a scam. In China, landlines have the following format: 86-10-3333-3333. 86 is the country code. Knowing this information can assist you in determining whether the number provided is even in China.
Request references
Request reference letters from the supplier's bank to verify their financial creditworthiness. To check on the supplier's track record of producing high-quality items, request references from previous customers, and don't be afraid to contact them as well.
Obtain product samples
When you have a sample in your hands, you can inspect the quality to ensure that the product is exactly what you want. Requesting a sample allows you to verify not only the quality of the product but also the legitimacy of the company as a whole. If you are required to pay for your sample, request that the funds be wired directly to the company's bank account. A company that is unwilling or unable to provide the transaction details is unlikely to be serious or interested in doing business with you.
Conduct background checks
Check all available information on a potential supplier, such as business scope, shareholders, and financial records, using third-party authentication services such as GloBis or China Checkup.
In addition to factory audits, JOG International Ltd. can provide a supplier background check service to our clients.
It is important to note that the target company is completely unaware that one of their customers is conducting this type of verification on them. However, in many cases, the customer should be proud of it because it demonstrates that they are a serious customer who is investing in building a solid and long-term supplier base.
Social media groups
There are numerous social media groups with various sellers or companies banding together to report bad and scam Chinese whole sellers. If you find your supplier's name in any of these groups, reach out and ask if anyone in the group has had any experiences, and find out exactly why before you decide to use the particular whole seller.
On-site factory or company visit
This is the most effective way to verify your suppliers – you won't know much about a company unless you visit it. You can also meet in person to discuss your products, prices, quality inspection, and delivery time expectations.
Buyers and sellers should conduct proper due diligence and research before entering into any transaction to reduce fraud. If you are meticulous in your verification process, you will know whether or not your potential supplier can be trusted.
It is critical to seek advice and support from the appropriate experts when starting a business. Since 2004, JOG International has been assisting a global client base in product sourcing and supply chain services from China. What sets us apart from others is our 20 years of experience and our dedication to offering quality products at competitive rates to our clients. Trade with trust is our company motto & a core value that sets us apart from some competitors often only interested in one-time business. We are motivated by long-term mutually beneficial relationships & gain a great sense of pride to see our products making a real-world difference. JOG International Ltd. consistently rises to the top & should be one of your primary options in product sourcing and supply chain services from China.
Finally, if you are aware of the scams and games that people play and perform the necessary checks and balances, you should be able to conduct successful business dealings with China. The rest is a matter of understanding your supplier's strengths and weaknesses, as well as how you manage the project and maintain quality controls.
Share other tips and your thoughts below.
Comments