I am a growing business buying and selling corporate gifts and promotional materials and have been importing from China since 2007. I’ve seen a couple of products from suppliers’ websites that I like to buy, but I realized that most of them are Trademarked/Patented products mostly found in the US or Europe. 1) If I decide to buy these products from China, how can I be sure of the same quality? 2) I saw a company that has about 5 websites and claimed they are the same. They have almost all products in the world which I’ve been trying to get for year, how can I be sure they are genuine? Considering the size of my company.
Actually, your bigger concern should be how to avoid jail or having your products confiscated. If the products are patented in the US or EU, then it is highly likely they are protected in your market and China too.
China doesn’t have the best record when it comes to protecting IP, but things are getting better and better, in terms of courts enforcing IP rights in China.
Let’s say, for the sake of discussion, that the products are NOT patent protected in your specific market, but that they are patent protected in China. If you decide to buy from China, you have two big dangers.
- If the brand or trademark is famous, at the port of exit, the Chinese customs officials may ask to so see paperwork confirming ownership of the IP. If the supplier can’t provide this, then your order will be stopped and both you and the seller would be put on a blacklist and you will both have all your future orders inspected very carefully. Plus it really sucks when you have paid a deposit and the supplier refuses to give it back to you.
- The other danger is if rightful owners of the IP discover you are knocking off their product, they may go after you for damages. If their IP is registered in China and not in your home country, then the only place they can stop you is at the supply side in China. So they may get your supplier’s option closed down. This is really bad if you have multiple orders and money tied up.
If the IP is registered to somebody else in your market or China, and even if the supplier tells you to not worry about buying these products you should still worry because you are the legal importer of record into your country. If you violate somebody’s IP in your home country, your nation’s lawyers and authorities are not going to try to go after a Chinese supplier, they are going to put their hands on you because you are easy to find and have assets in your home country.
The other part of your question deals with how to verify suppliers. So let’s assume you follow the ethically correct path and you engage a lawyer (I would be happy to recommend one if needed) and confirm that you are not violating any IP in China or your home market. If that is the case, let me give some suggestions on how to verify if the supplier is legit. I think there are two kinds of checks that need to be done: Quality Audits and Due Diligence.
A Quality Audit can be conducted to confirm that the supplier has the ability to produce a given product to your desired level of quality. In China I have found people are very polite and never want to say “no”, even if you ask them if they can manufacturer something totally new to them. So as buyers we need to verify that the supplier can actual make the product we want to buy.
You can find tons of service providers by doing a google search of “china + quality + inspections”. For what it is worth, I’m comfortable recommending www.AsiaQualityFocus.com as they did good work for me and charge only a few 100 USD for this service.
The other type of verification is to check that the supplier has a good reputation among customers and is in a solid financial situation. In other words, they are not going to run away with my deposit and will be in business long enough to complete my order. There are different levels of intensity and detail among due diligence services. For your reference, I am a big fan of www.CBIconsulting.com.cn which is run by an American friend of mine who has some of the best stories among all the expats I know in China because he and his team gets to work undercover gathering marketing intelligence on suppliers. And he has come across some crazy happenings in the China supply chains.
Wishing you successful China sourcing!
Question answered by Mike Bellamy, host of “Ask the Experts” at the China Sourcing Information Center.
Mike Bellamy is an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center (www.ChinaSourcingInfo.org). He is also the author of, “The Essential Reference Guide to China Sourcing” (chinasourcinginfo.org/book) and founder of PassageMaker Sourcing Solutions (www.PSSchina.com)