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Can I Trust These Suppliers?

I need to know if the following factories can be trusted to do business with or not:

WIZ Technology Limited

Gold-East Electronics

In the China sourcing industry, when we talk about verifying a factory to confirm they can be trusted, we generally focus on two aspects:

1.     Due Diligence: Is the company a legitimate business and not a scam or business on the verge of bankruptcy?

2.     Quality Audit: Does the supplier have the ability to produce the products I want to buy?

Type 1: Due Diligence is an investigation of a business prior to signing a contract to ensure the company (supplier) signing the contract is who they say they are. For example, do they really have 1000 employees, 50 million USD exports, own the factory 100%, have happy customers, good financial standing (will not close doors suddenly) and so on.

There are various levels of due diligence a buyer can conduct.

Here are four options:

  1. It doesn’t cost any money for you to ask for references from the supplier and contact those references.
  2. www.SupplierBlacklist.com is also free and lists experiences with bad suppliers.
  3. For a few 100 USD, there are research firms like, www.Glo-Bis.com, who can work with the PRC government to check for any red flags.
  4. For a few 1000 USD, investigators like, www.CBIconsulting.com.cn, can go undercover and investigate the supplier’s business.

Type Two:  Quality Audit/ Factory Audit

This service is designed to ensure the supplier has the equipment and experience to make any given product. Audits can be conducted by the buyer, but usually third party experts (at 298 USD ) are hired to do the audit, as it is a specialized skill and requires proper licensing from the Chinese government. You wouldn’t ask your sales team to do engineering for example.

In my opinion, doing both your due diligence and QC audit is an essential step when sourcing from China. Perhaps I am jaded after living in China for a long time.  I assume the worst until proven otherwise. Trust BUT verify.

If you like, I can put you in touch with representatives of the service providers mentioned above so they can reach out to you and explain how their due diligence and quality audits can protect you.

I would also like to draw your attention to the following blog post which may be of interest to you:

Genuine products from China?

Let me know how your project works out.

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 )

 

 




One thought on “Can I Trust These Suppliers?

  1. AvatarPatricia Dulaney

    Trust and reliability of suppliers are very important. As buyers or consumer, you should make sure that you are dealing with trusted suppliers so that you’ll not end up crying because you got scammed.

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