Hi Kirkm,
There is good reason to be careful in dealing with your supplier. What
you should realize is that back in China somebody else is being very
worried whether he is going to get paid by you. The trade system is
developed to solve this problem partly: a 100 percent guarantee is
never possible. Depending on the products you want to buy: quality can
be an issue.
Much of what I will tell you depends on the size and the character of
your business. If it is a one-time order of low-value products: risks
are high. The larger your business, the easier it is to build in
guarantees.
To start: use an l/c or letter of credit as payment method. In that
way the bank can guarantee your money does not get lost when products
do not arrive and you at least get your goods. There are different
letters of credit for almost any situation: go to your bank for
information.
The most basic guarantee, used by many traders when they start a new
relationship with a supplier here in China: keep your first orders as
small as commercial feasible. What makes a supplier really loyal
towards a customer is the expectation of repeat orders.
When feasible, go to have a look at the factory, or send somebody to
do so. While it does not say that much, it shows a level of
commitment: the supplier will appreciate and he will be more careful
with your order if he knows you and you know him.
Do a basic internet search – or ask Google Answers to do that for you.
Is the company registered with one of the larger websites that
organize manufacturers in Asia, like Globalsources or Alibaba? Or has
the company its own website: how does it look like? While it does not
give a guarantee, when your supplier is mentioned at those sites, or
has an Internet presence, you can take them more serious than
companies who do not have that.
Following this, there are the more expensive strategies. You can ask a
law firm to investigate a firm: they can help you to do background
searches. They might have to hire specialized organizations to do this
for them, but this service is becoming more established in China.
You actually hire private-detectives to investigate a factory. A few
are active in China and the top-end are Hill Associates and the
Pinkertons.
There are some purchasing organizations who organized the large-size
buyers of goods. But then we talk about a really comprehensive
investigation: are they complying with the environmental regulations,
do they use child labor. That might exceed your question.
Good luck,
Fons
Links:
l/c's (different sections of this website give more information about
different kinds of l/c's)
http://www.mantissa.co.uk/Top6_1.asp
Sources for sourcing
www.globalsources.com
www.alibaba.com
China largest law firm
www.kingandwood.com
private investigators
www.hillcom
www.pinkertons.com
Search strategy:
Google: yourimporter.com; hill associates; pinkertons |
