I have a quick question. I am about to place an order with a manufacturing company in China for the 1st time. They have been communicating very well with me, so I feel comfortable with them in that regard. However, since it is my first time, I am nervous in general. Can you please let me know what concerns or questions I might ask them before I place the order.

ANSWER:

Hi Lisa,

Thanks for your questions.  While it is good to have a comfortable feeling based on e-mail and perhaps a face to face at a trade show, I’d like to stress the need to have an audit (3rd party or done on your own) to verify if the supplier can actually do all they say they can do (quality, lead time, IP protection, customer service, raw materials…).  The two most cost effective and just plain effective things you can do are

  1. Independent audit BEFORE place the PO and sending $
  2. Product Inspection by a 3rd party (or yourself if you have experience doing QC audits of Chinese factories) before the goods ship from China, and BEFORE final payment is made.

As these two items costs hundreds not thousands of USD, I would go so far as to say a new buyer would be putting themselves in great danger if they opt not to do these steps.

In my orders to new suppliers, I like to do a 3rd step which is to verify the financial stability of the supplier. Operational Due Diligence is also affordable and will answer the key items such as:

  • Does this supplier have a good reputation among buyers, suppliers and staff?
  • Are they in a solid financial situation and unlikely to disappear with my funds?

Best wishes on your sourcing program.  Please continue to stay in touch; I am interested to see how things work out for you and hoping my suggestions get you pointed in the right direct. If you need help finding service providers for the auditing and due diligence, you can find the CSIC’s endorsed service providers here.  I am also happy to make a personal introduction for you to their management to ensure you get the best support possible for you.

 

Best Regards,

Mike Bellamy

Chairman of the Advisory Board, China Sourcing Information Center

China Operations Director, PassageMaker Sourcing Solutions

Author, “The Essential Reference Guide to China Sourcing.

Blogger, www.ChinaSourcingInfo.org

LinkedIn Profile: http://www.linkedin.com/pub/michael-bellamy-author-business-owner-volunteer-advisor/8/52a/389