China is such a great source for a wide range of commodities with low cost, but for many buyers, the problem is that so many suppliers make them puzzled, some are with good quality, some not, some are real manufacturers, some even don’t exist. I believe that most buyers have learned some basic tips to verify qualified suppliers, here I just want to introduce a few examples of potential risks I experienced myself.

I’m a Chinese guy, used to work for a mid-east trading company headquartered out of China, the company buy many kinds of commodities from China, like furniture, motorcycle, e-bike, home appliances, electronics , blanket etc. This way, I had chance to travel many places, Beijing, Shanghai, Guangzhou, Yiwu, Hangzhou------to visit those factories or markets in person, everywhere I went, I took pictures of products and factories and sent to the overseas office by mails, also I gave my own opinions about the suppliers as a reference for the head quarter’s decision-making.
Many buyers from out of China only know something about their suppliers through internet, and can’t evaluate in person, which increase the risk of their business.

It’s not that I always have to do travel thing, travels only took a small proportion of my job. I used to look into the suppliers through their sites(English and Chinese) first, Sometimes, only a look at the supplier’s website, you can tell that if it’s cheating or not, like some addresses do not really exist, etc. There are also some bad guys who are using other companies’ websites, in this case, I’ll call for a verification. Also, in some well-known B2B websites, there are some bad guys doing cheating thing, even they are with gold membership.

For example, one time in 2008, one of my colleagues in the headquarter wanted to buy some computers and parts, she chose by herself a supplier located in Beijing, and transferred about USD 20,000 to them, she waited some days and then urged the supplier for delivery, but to her horror, the supplier delayed time after time, just would not send goods. At last, my boss sent me to Beijing to try to get the money back.

When I got there following the address on their site(they are a gold member of a famous B2B website), to my big surprise, it’s only one of a hotel’s rooms, there’s definitely no such a company. So I phoned them but the phone’s closed.
I called the police, but they would not take care cos it’s a trans-national fraud as they said, I tried hard for 2-3 days, frotunately got about 80% of money back finally. so exhausted.
Another potential risk is about the supplier’s reputation, you require them to use good materials and even check the sample carefully for that. Yes, there’s no problem about the sample, but they could change poor materials after you place a big order.
Take my story for an example, the company ordered 60 units of steam ovens from a factory in Guangdong in 2007. I was sent there for negotiations and inspection. The price is good, we required that the ovens must be made of 0.8mm thick Japan or Korea made stainless steel, but the factory changed it into 0.6mm thick China made stainless steel. I found out and demanded them to change back, first they found a lot of excuses to explain that the materials were ok, I sent one piece of materials to SGS for inspection in person, it proved that they did cheat, to this step, they have to put it right.
For one thing, bad guys are only a part of all suppliers, there’re many good suppliers in China. But sometimes the bad ones do make small or big harms toverseas buyers.
Therefore, I’d like to give a few suggestions to those buyers who are sourcing or plan to source from China but without an office in China, just for reference.
1. Pay a business visit to the supplier in person as far as possible, seeing is believing, it deserves if you want a long and pleasant cooperation, especially for some big and important orders;
2. If you are not available, then try to find one Chinese friend you can trust on to act on your behalf in China, you can have him/her as your representative.
3. If your business scale really big, and your demands are very diversified, then establish a sourcing office in China could be a good idea, this’ll be convenient for travel and management.

Sure, there are many other stories about my work , I’ll write some other posts in the future, hope this post to be of a little help to you.