How To Not Get Cheated By Chinese Suppliers

Finding a reliable supplier or manufacturer in China can be very hard when you are running a small business and don`t have the time or money to use an expensive sourcing agency or visit the suppliers yourselves. Your only options are often sites like Alibaba.com and Made-in-china.com. You can find the perfect supplier on Alibaba.com, but you can also get burned and lose alot of money buy choosing wrongly. Alibaba.com and Made-in-china.com makes money by charging suppliers for being listed as “Gold Suppliers” and “Gold Members”. The only requirement for being golden is paying enough money to the sites. Because of this, alot of scammers and bad suppliers are unfortunately taking advantage of the system.

How do i find reliable chinese suppliers?

We always recommend people to search our database of user-reviews of suppliers and manufacturers. You can not only find suppliers from China here, but from all over the world. If you are lucky, you`ll find a perfect fit with good ratings from our users.

If you can not find anything in our database, you should start looking on a site like Alibaba.com and Made-in-china.com. But when you do, make sure to take caution and use common sense. You should follow the following steps to minimize your risk;

1. Make sure to use suppliers that have been gold-members for a few years. This ensures that the manufacturer has not been kicked out recently due to fraudulent behaviour.

2. If possible, use suppliers that have been certified by the website.
Alibaba.com for example, offers “Assessed Suppliers” and “On-site Checked”.

3. Check their website. It might sound naive, but the more professional their website looks, the more professional the supplier usually is. It is also great if they have pictures and videos from their factories and offices, but do not take it as clear evidence.

4. Google them. This one is obvious. Make sure that there are no warning signs online regarding the supplier you are considering using. People who have been scammed when sourcing overseas often writes about it in forums and blogs.

5. Get a feel of the company-representative/sales agent.
Remember that the chinese have a different business culture than yours. Sometimes they might feel pushy and a bit over the top. This is just because they really want you as a customer.

6. Call the supplier on the phone. Always do this to make sure that the contact information they have given is correct.

7. Make sure that they want the payment in a legit bank account. If the supplier want to receive your payment in a personal bank account, via western union, or in a dodgy Paypal-account, you should choose another supplier.

8. Check out China Vista Yellow Pages. Visit China Vista and search for the supplier’s name. This is an easy way to make sure that the supplier is a registered company.

9. Do the supplier attend Trade Fairs? Ask the supplier if they attend any trade fairs. Suppliers who are, are usually the more legitimate and serious suppliers.

10. Ask for references. Try to see if you can get a reference from a former/existing customer. Call them up, and ask about their experience with the supplier/manufacturer.

Now you should have a good understanding of how you can avoid fraudulent suppliers from China and you should take a look at our Ultimate Guide To Importing From China.

  1. Frank Nors says
    February 8, 2013, 7:59 am

    At a dinner with some Danish friends and client last night, I asked them ” what is people`s first impression about China or doing business relatives to China in DK.

    - ” It is so so far, that would most of Danish people would reply” one said ” lots of them are scared of its so far and do not know too much about it ”

    - ” They eat everything” , okay this sound not something new lol , but in fact, not all the Chinese people eat all weird thing

    - ” They love firework” ……..awww,

    Okay , anyway, there is quite a lot of misunderstanding and funny idea of China. When it comes to business, lots of misconception about it. I selected ten of them from one famous sourcing magazine for reference :)

    10. The government will send an inspector and will block the goods if they are below a certain quality standard.
    no, they won’t. They close some factories (a very small minority) from time to time, but they will not check if the products you buy from a supplier are acceptable in your country.

    If you want someone to help you with quality control, take the initiative and contact some QC agencies.

    9. All the companies listed on alibaba.com, or exhibiting on trade shows, are manufacturers.
    Wrong! Most of the suppliers listed on alibaba.com don’t own manufacturing facilities. They are intermediaries, and many of them will claim to be manufacturers.

    Research who your potential suppliers are. There is no substitute for factory audits and background checks.

    8. The supplier we contacted told us they are ISO9001 certified by SGS, and they work for Disney. So we are safe if we buy from them.
    ISO 9001 certifications don’t mean much in China — ignore them. If this is important to you, audit the quality system of the factory yourself.

    And customer references are cheap — they should be considered false until you have verified them yourself.

    7. In China, everything works with personal connections. I need to ask around, until someone introduces me to a good manufacturer they know.
    Bad advice. Start by defining what the ideal profile of the supplier you need looks like: what size, what engineering capabilities, what peak production seasonality, what main export market…

    Then it is only a matter of contacting many potential suppliers of screening them, and of visiting the few that look the most promising.

    6. All we need is a good factory to act as our partner. They will see that their interest is to give us high quality at low prices.
    It just doesn’t work. All importers ask their suppliers to make short-term concessions for mutual gain in the long term… And most of them disappoint their suppliers within the first two years of the relationship.

    5. All we need is a good agent who will find good suppliers and then follow up on our orders.
    Some sourcing agents do a great job. But over 90% of them should be avoided. They will actually increase your prices by getting commissions from factories, in addition to what you pay them.

    4. Most companies that export from China are middlemen. Once we find one company that offers much lower prices, it means we have found the manufacturer.
    Chances are, the price that is the lowest at the beginning won’t be low any more by the time you have wired a deposit (“raw materials are up, so we need to raise the price by 20%”).

    Or, even worse, you won’t hear from them again and they won’t ship anything to you.

    3. We need to buy directly from factories, to save money.
    If you place relatively small orders, you might be better served by a trading company. Small manufacturers generally are very disorganized and don’t have English-speaking staff.

    And, in China, the reality is seldom black or white. Factories routinely sub-contract some of their orders. Some trading companies own shares of factories. Most factories only do one final operation, but most of the potential problems originate from the components they have purchased from a sub-supplier.

    2. We can buy anything directly in China. It’s like a supermarket.
    Wrong! You can buy about anything, as long as (1) the order quantity is high enough, (2) some manufacturers have the capability to produce what you want to buy, and (3) these manufacturers are willing to sell it to you.

    Do your research, but don’t assume anything. And following up on a first order from China can take you 15 hours a week for the whole length of the project, if you purchase goods that were customized for your order.

    1. Chinese factories already work for European and American customers. They know the market expectations. They will know the safety standards, the packaging requirements, etc. better than us.
    Shockingly few of them know the safety standards inside out.

    And, if you leave some specifications up to them, they will follow their cheapest solution… which is probably not in your interest.

    So the QC is quite important if you take big orders.

    Okay, hope these could help importers on Tradesparency.com a little bit

    Cheers,

    Qing

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  2. Frank Nors says
    February 8, 2013, 10:51 am

    This was written by Qing Xu, she is a Chinese lady living in Denmark, I just find it to good not to share.

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