Wednesday, 21 March 2018

4 out of 5 trust-pass members fail site inspection in China

Last week we paid several factory inspections to some China-based companies upon request of our foreign clients.

All the five companies are the so-called Gold member or Trust-pass members from a TOP B2B platform in China, all suppliers claimed that they were real manufacturers of electronics. Here are the facts after an on-site factory auditing from us in China:

Company One: 
This is a fully qualified factory and exporter, with a registered capital of more than 7,930,000.00 USD and more than 300 workers, they mainly export to European and US market.

Company Two:
Declined my visitation on the pretext of goods shortage, but they promised to receive us before our departure to Shenzhen.

Company Three: 
Received us at an office in a hotel, there are 3 salespersons working in the office. We cannot even find a logo on their company in the office and on the door. They are checked out to be a small offshore trading company in China.

Company Four: 
They are a registered small trading company in China, however, they do not have their own right to export ( I mean they do not have the Certificate of Import & Export issued by local government authorities ), they normally export their goods via freight forwarders, for which the buyer may bear some risks. They do not have any factories at all. They cannot show me any quality control measures and after sale services in written forms; they cannot even show me a formal sales contract!!

Company Five:
They 'stole' the registered information from another factory in China, that is to say,they used a factory information to register online but actually their business was operated in a totally different company in China. It's quite risky for the client to do business with such suppliers as they will disappear sometimes after they get the money from the client. One of our European clients already lost more than 20000 USD for such cases last December. The client information can be available upon request. 

My suggestion:
You'd better deal with larger trading companies or manufacturers directly for sake of better quality control in China. Lot of trading companies disguise to be a real manufacturer online, so a factory auditing or inspection service is very necessary for any large order in China! A factory inspection service can fully disclose the truth about your supplier and it's one of the best ways to verify your Chinese supplier so far!

What can an on-site local factory visitation bring you? 

As we all know, there are many false things on the web, which perplex us often when we are going to make a decision. The case is also true with buyers who are going to buy from oversea suppliers. Here I bet a factory visitation (better by a local person) is a second-to-none solution.

1.Genuine or False?
The local person can go and check the company (the potential seller) and all its factory registration information to see if it’s a genuine and serious enterprise. This is the basic thing that any buyer has to do before any sincere cooperation!

2.Production Competence (Throughput)?
The visitor can inquire about the factory's producing ability (also known as throughput) with the director of Production Department. How much can they produce in a month or a quarter? By learning their production competence, the buyer can avoid the risk of a delayed delivery to some extent.

3.Quality Control?
The visitor can try to get to know the factory's quality control system with the help from the director of Quality Control Department. He can also get to know more by inspecting their assembly lines or work shops. Good quality is always one of the crucial things that buyers are always pursuing.

4.After-sale Service?
After-sale service is also important for buyers. Here the visitor or inspector can make sure if the factory can offer good and effective after-sale services and also confirm if they can include after-sale services as one clause in the contract? After-sale services can keep you free from some troubles.

5.Export License?
Some suppliers do not really have export license. Here the visitor can check the supplier's registration information with the local customs to see if it can really export directly to the buyer's country. This is also one of the factors that can free you from being scammed. Other qualifications of the supplier can also be checked out by a local expert in this field in China.