Showing posts with label buying from China. Show all posts
Showing posts with label buying from China. Show all posts

Wednesday, 22 June 2016

Importing From China - Things That You Need to Know

Setting up a business comes with lots of responsibility. Once you're up and running, staying on top of your day-to-day operations can be a lot of work, and sourcing products to sell takes up valuable time and resources. China remains one of the world's most popular destinations for sourcing across every product category,but its unique marketplace can be difficult to negotiate if you know nothing about the business environment there.At every stage of the procurement process, it's important to get to grips with the peculiarities of the Chinese business world.

Selection of a qualified supplier

There are many ways for you to find out some qualified suppliers in China, the traditional way is to go and meet them at local trade fairs, say, Canton Fair, one of the largest trade fair on the globe.The best way to find some qualified suppliers is to source them at local manufacturing bases,in China, each city has their pillar industries, thus there are tens of hundreds of different manufacturing bases in China, please click here to find out some popular manufacturing bases in China.The most cost-saving way to source Chinese suppliers through online B2B platforms like Made-in-China,Globalsource or Alibaba etc, which allows you to search through high volumes of suppliers using a range of different criteria. It's fast, effective and will make it far easier to single out a few promising prospects from the thousands of companies out there. However,there might be lot of business scammers online as well,they can create anything online,some Chinese companies may have an untranslated or poorly translated website that doesn't tell you all you need, so if you can enlist someone to help you search in Chinese it could a worthwhile step.

Contact these suppliers, explain your business and get a sense of who is genuinely interested in you as a customer. The ones who reply promptly to emails and have all the information you ask for on hand are worth holding onto. Give them a detailed specification and ask for samples - and when they arrive, make sure you check the packaging and instructions as well as the build quality. Do they understand and meet all the right certification requirements for the market where you'll be selling the products? Are you sure that your supplier is a qualified factory? If you're not sure, you can simply check out their registered information with local officials or a Company Verification service from local experts in China.

Auditing of Chinese suppliers

In China,not all the factories or trade companies have the right or qualifications to do business with the overseas partners directly. On the one hand,some small factories or trade companies do not have their own Export License,they have to work with a qualified export agent to 'sell'their items. So legally a qualified exporter or export agent is your direct business partner in such cases. On the other hand,each exporter has their own business business scope, no exporter can export anything whatever you need, some items need special export quota or licenses from the government. If your order is small, you can try to verify their business license and export qualifications with local officials or verify them via a local expert in China like STIN. If your order is large enough, then an on-site third-party factory or supplier inspection service is very important to stop you from future trouble before you place any orders.


Communication with the suppliers

The most important skill you can learn is negotiation. Haggling over the price, minimum order quantity and other terms of your order is far more common in China, and if you're willing to drive a hard bargain you can make real savings from original quote.

Chinese manufacturers usually work on thin margins and quality does have a price, so don't get obsessed with chasing the cheapest price. Equally, you need to be realistic in your order estimates so they can work out exactly what they need to charge to avoid losing money.

Ideally, you would communicate in the same language; hiring a translator is often a necessary step. However,whenever you communicate, always make sure you send follow-up emails in which you reiterate what has already been agreed and ask them to do the same- this will cut down on the adverse impact of the language barrier.

Of course, you also need to make sure you have a contract drawn up by a legal practitioner or a professional purchasing agent in China who has good knowledge of Chinese trade so the terms are enforceable and comprehensive.

In the event of anything going wrong, it would be ideal to discuss the issue over dinner. But of course, that's unlikely to be an option, so Whatsapp, Wechat or Skype or something similar is the next best thing. Be prepared to wait until the end of the conversation to raise the difficult subject.

Quality control management

If you can visit the factory at least once during production, then do so before the order is shipped. Alternatively, if you'd like to save more time and cost, you can consider hiring a professional QC inspection company or sending a qualified person whom you trust. It may seem like you're wasting time and resources, but it will not be frowned upon in China and is vital to make sure everything is running smoothly.

Either way, you should already have an idea of the kind of quality to expect from the samples you've approved.

Payment and delivery

Paying in instalments and hold some back until the shipment has been delivered - a 30-70 percent split between order and delivery payments is common, but this is negotiable if you want to pay less upfront or increase the number of instalments so that some payment changes hands when the goods are received.

One of the most common arrangements in terms of shipping costs if “FOB Shenzhen”, where the supplier pays to get the goods to the port of Shenzhen and then you take over. But of course, this is up for discussion if you'd prefer different arrangements.

Generally, your main delivery options are by air or sea. Air transport is a better option for small volumes or high values, or even if your products happen to be small and delicate - it's faster and can often reduce the risk of damage. Ocean shipping takes longer but is better for bulky and heavier goods. Using a reputable logistics service is vital, since they'll usually be able to manage the whole process for you.

Take the hassle out of sourcing with the ONE-STOP STIN buying office service.

STIN buying office or purchasing agent service can solve the problems for the clients from the beginning to the end, covering: Selection of qualified suppliers; Payment Risk Control; Quality Control; Shipping and Logistics Support; and even after-sale services etc. By taking the stress out of sourcing your products, you'll save valuable time and resources that you can devote to your business. Find out more about how STIN services could help you here.

Source: Alibaba Forum and STIN service team

Friday, 21 June 2013

How to Draft Contracts with Chinese Counterparties

 There are three reasons why it makes sense to have a contract with your Chinese counterparty, and only one of those reasons is enforceability in court.

1.Clarity.
The first is to achieve clarity. To make sure you and the Chinese company are on the same page. For example, if you ask your Chinese supplier if it can get you your product in 20 days, it will say "yes" pretty much every time. But if you put in your contract that the product needs to ship in 20 days AND for every day it is late, the Chinese company must pay you 10% of the value of the order, there is a great chance the Chinese company will get honest with you and tell you that 20 days is impossible. At that point, you and the Chinese company can figure out what is realistic and then you know what to expect, realistically, going forward. Needless to say, I can give countless examples of this sort of thing, but this is yet another reason why we advocate putting your contract in Chinese. Clarity before you start the relationship. It is more important than you think.

2.Stricture.
The second benefit of having a contract with your Chinese counter-party is that it will likely bring that company to heel. By this I mean that just having a well written contract that is at least potentially enforceable means that the Chinese company knows exactly what it must do to comply. And, in most cases, it might as well. Let's use the 20 day example as the example here as well. If your Chinese manufacturer makes widgets for 25 foreign companies and 5 of those have very clear time deadlines with a very clear liquidated damages provision, and the Chinese company starts falling behind on production, to which companies will the Chinese manufacturer give production priority? Of course it will put the five companies with a good contract at the front of the line.

3.Enforceability.
Here's the funny thing. My firm has written hundreds and hundreds of China contracts and we have never once been called on to litigate any of them nor am I aware of any of them having been litigated. I attribute this to reasons #1 and #2 above, but I have to admit that this also means I cannot stand up and scream that Chinese courts enforce well written contracts. Even better though, I can stand up and scream that they do certainly seem to prevent problems. Even though I cannot speak regarding the enforcement of my firm's contracts, I can say that where my firm has sued or threatened to sue or arbitrated or threatened to arbitrate on contracts written by others, we have felt that China does enforce contracts. More importantly, however, the World Bank feels the same way, ranking China 16th among 183 countries in terms of enforcing contracts. And that is a lot of the point. If your Chinese counter-party believes your contract will be enforced or even if it just believes it may be enforced, it is likely to act accordingly.

China contracts worth doing? If done right, you'd better believe it.

Copyright Notice: The Website is dedicated to providing general legal knowledge for the public; from time to time, we select some valuable legal articles and publish on the Website. Considering most of the viewers have no legal background, we will edit the articles so that the viewers could understand better the contents. In general, we obtain the approvals from the authors prior to publication. Should we fail to get the agreement from the author due to contact difficulty and directly post some articles, we promise we will remove them once we receive the complaint from the writers and take all legal liabilities accordingly. STIN service team has rich experience in dealing with legal issues here in China.

Basic Due Diligence Work for Sourcing from China

Below are some procurement recommendations :

1.Verify the name and address of the company, the manufacturing address, phone number and fax number. Cross-reference this information and the company name against other trade sites to ensure that the information is the same including contact names. Conduct a Google search on the company and their address to figure out if you could find additional information or additional suppliers that supposedly operate under the same contact information.You can also use a third-party company verification service to check them out in a professional way.

2.Refuse to deal with generic e-mail addresses like hotmail or yahoo. Only deal with specific company addresses. If the e-mail address is similar to sales01 or sales02 etc. I would assume that they are a reseller and not a manufacturer. Resellers tend to have offices of people surfing Alibaba etc, all day long trying to contact people. Conduct a whois search on the supplier's web-address. Verify the information.

3.Call the supplier at the provided phone number several times and inquire about the company and the person. Ask who is in charge and ask to speak with him. Ask your contact to send along information on the company including maps to their manufacturing site.

4.Ask for references in the USA or any other developed country, preferably the references from your own country. Require them to provide a contact name, company name, title, address and phone number. Follow-up with the references in person--not via e-mail. Ensure that they are valid references.

5.Inform the supplier that you will be visiting their location for a factory tour. Evaluate their response. It is best to hire someone to actually visit the company to verify the company's validity and business operations even if it costs you some money because it is better to minimize risk during the sourcing process. There are a few reputable companies out there that can conduct a background check for you. Contact these companies and buy the reports. It is well worth the money. Professional factory inspection or auditing service can be available from STIN group in Mainland China.

6.When procuring items for new suppliers request payment via L/C instead of T/T. Very few international manufacturers actually accept Paypal or Escrow. If you have placing a very, very large order then you might be able to get them to agree. Never pay the full balance up front.

7.Pre-shipment inspections are a must for new suppliers. You want to ensure that the goods are of adequate quality before accepting the order. Conducting a statistical sampling of goods is highly recommended. Also, if you are able to coordinate a pre-shipment inspection then you could arrange for payment of the balance upon successful completion of the inspection.

Notes:
If you are dealing with suppliers that pay brand name goods like Apple iPods, Nokia phones, please don't expect that these are manufacturers of these products. Brand name goods companies have tight controls over the manufacturing process. If the company is a manufacturer then these are most likely fake or imitation goods. If the company says they are authentic then they are either they are a reseller or possibly fraudulent.

How to source from China smoothly?

Sourcing suppliers
There are many resources to help you find suppliers. Twenty years ago, you’d mainly rely on trade magazines or other published information about manufacturers and suppliers. 
Today the process usually starts online. Supplier directories like Alibaba or Global Sources provide information about thousands of verified China suppliers and their thousands of products. When using online directories, check what steps the directory owner has taken to ensure suppliers are real. For instance, Global Sources verified suppliers have been visited at least three times, so you can be comfortable they are real companies, with real people and real offices.
Trade shows provide another opportunity to meet suppliers face to face while looking at and touching their products; the U.S. and European trade shows have a small number of China manufacturers while shows in Hong Kong and China have a greater depth of China Suppliers. 

The China Sourcing Fairs, held in Hong Kong every April and October, include an Electronics show with over 2,200 booths of suppliers, Gifts and Home show with 3,800 booths of suppliers, as well as Fashion Accessories and an Underwear & Swimwear show. The Trade Show Center here will update you on recent and future trade shows.
If youd like to save more time, cost and energy, you can also book an On-site Sourcing service from a third-party service company like STIN: www.chinabizservices.com or  www.bizinchina.cc  they can help you out with your detailed sourcing requirements in China. 

Selecting suppliers
If you’re only going to buy 10 pieces, you’re unlikely to get either domestic or overseas manufacturers’ attention. You’ll have to go through trading companies or distributors. If you have an established business that sells good volumes through your existing sales channels, and have the potential to become a good long-term business partner for the manufacturer, you’ll be able to get their attention.
When contacting the supplier, start by explaining your business and then request samples of the products you’re interested in. You’ll likely have to pay for shipping and the product, typically via wire transfer. In reviewing the samples, don’t forget to review the packaging and instructions in addition to the product itself. And remember, as the importer you are responsible for ensuring the product you are importing meets all relevant regulations. Learn what these are, in part by asking suppliers that manufacture these products whether they’ve previously exported to your region and what certifications are required for that market. You can also go to your local big box retailer and see what certifications are on similar products. 
Finally, communicate frequently with the supplier about all details of the transaction – not just the product, but also lead times and manufacturing completion dates. If you’re new to importing, think of your first order as a small initial order that helps you learn how to import from China, rather than an order that will make a profit. 

Paying suppliers

You’ll need to determine the terms of trade. Typical would be “FOB Hong Kong” which means the supplier pays to get the goods to the port of Hong Kong, and you pay to get them from Hong Kong to your warehouse. More detail on FOB and other incoterms is available on this incoterms chart.
While everything is negotiable, common payment terms are 30% at time of order and 70% when goods are shipped. The 30% payment at time of placing the order gives the manufacturer the money he needs to purchase the raw materials necessary for your order. Some buyers have negotiated other terms, like 30% at time of placing the order, 55% at time the goods ship, and 15% when the goods are received. The payment before shipping mitigates risk that the buyer won’t pay, but then puts financial risk on you as the buyer. Understand and mitigate this risk through communications with the supplier (does he seem professional) and by starting with a small order. Typical payment method is via wire transfer. Shop around – international wire transfer fees vary quite a bit from bank to bank.

When you write your purchase order or contract, make sure you have clear options including outs and specific penalties if problems (such as delays) arise.

Quality control

Having selected a supplier, placed an order, and made an initial payment, you now have to decide what you’re going to do to manage quality control. Quality control generally begins before manufacturing starts, so after having seen the sample ask the supplier what steps he takes to ensure quality control. This can include both the raw materials he’s using in the product, and also any continuous improvement to the manufacturing process. Once your order is ready, you have three choices for managing the quality of products.

(a) rely on the supplier’s quality control,
(b) have someone in your company do it,
(c) hire a third party to do it.
If you’re placing a small order (a few thousand dollars), you may choose to rely on the supplier’s quality control; for large orders this probably isn’t your best choice. If you have in-country resources, you may use those resources to inspect products on your behalf, including not just the end products, but also intermediate products during the production process and even raw materials. If you’re placing a larger order and need the products inspected, you may use a local third party inspection company like:www.chinabizservices.com , cost typically starts at several hundred US dollars) or find a third party project management company.
Regardless of who does the inspection, companies that are successfully working with China suppliers on large dollar volume orders seem to share one characteristic in common. They invest in quality assurance and quality control. This means talking to the factory in order to assess whether they have quality assurance practices in place that result in continuous improvement, and also developing extremely specific product inspection criteria. Inspection criteria may include not just the end product, but also raw materials and components.

Some Top and Well-known Trade Fairs or Expos from China

Sourcing at local trade fairs is a common way for oversea buyers to find out a qualified supplier. Choosing a right trade fair may save you a lot of time and cost in China sometimes, here are some famous trade fairs or expos in China for your reference:

Canton Fair: www.cantonfair.org.cn     ----Complex
East China Fair: www.ecf.gov.cn     ----Complex
China Yiwu Fair: http://en.chinafairs.org     ----Complex
Furniture China (www.furniture-china.cn )    --- Furniture
CIFF (http://www.ciff-gz.com )         --- Furniture
FurniSup (www.gzfma.com)       ---- Furniture Raw Materials and Accessories
CIDE (http://www.door-expo.com )   ----- Door industry
Lock China (http://www.lock-china.net )  ----- Lock industry
MICAM Shanghai (www.micamonline.com.cn)   --- Footwear Industry
CIFL (www.cifl-expo.com )      ---- Footwear Industry
CIFF (www.ciffchina.com)        ---- Footwear Industry
SFF (http://www.ilse.com.cn)         ----- Footwear Industry
Shoe Tech http://shoetech.chinaleatherfair.com    ---- Shoe materials and machinery
SLF (http://www.slfchinafair.com )         ----- Footwear Industry
DFM (http://www.dfmshow.com )        ----- Footwear materials and machinery
FLOWEXPO (www.flowexpo.org )
               ---  Valves, Pipe fittings, Fluid handling and control
FLUID (http://www.wsiee.com )
                ----Valves, Pipe fittings, Fluid handling and control
CDPVP (http://www.scfme.cn)
               ---- Valves, Pipe fittings, Fluid handling and control
   Or   http://www.fluid-sc.cn
Valve World (http://www.valve-world.net )  -- Valve Industry
Water China (http://www.waterchina-gz.com ) --- Water, Pipe, Pump, and Valve Industry
Tube China (www.tubechina.net)  ------ Tube Industry
CHPE (www.chpe.com.cn)   ---- Hosiery industry (socks)
Intertextile (http://www.intertextile.com.cn)   ---- Apparel fabrics and accessories
CHIC ( http://www.chiconline.com.cn )  --- Clothing and Accessories industry
SZIC (http://szic.cn)   --- Clothing industry
Canton Fabric (www.cantonfabric.com.cn )
                       ---- Apparel fabrics and accessories, yarns
Yarn Expo (www.yarnexpo.com.cn) --- Yarns, fabrics, dress materials, fibres
CINTE (http://www.cinte.com.cn)  --- Technical textiles and nonwoven industry
Home Textiles (http://www.intertextile-home.com.cn )
                       --- Home Textile and Accessories
CKCF (www.ckcf.cn )  ---- Underwear and home textile industry
SIFU (www.siuf.com) --- Underwear and intimate apparel etc
CHINA KNITTING (www.chinaknitting.com.cn) --- Knitting Industry
CTFE (www.shssny.com )  -- Textiles, fabrics and accessories industry
RHF http://www.rhfchinafair.com   -----Textile machinery, materials and accessories
Coat Expo (http://www.coatexpo.cn )  ----- Coating, Pigment industry
CIFE  (www.cifexpo.org )        --- Foodstuff
GIF (http://gzspz.com )         ---- Foodstuff
SIAL CHINA (www.sialchina.com)      --- Food and Beverage Industry
IBEC (http://www.ib-ec.com)
         - Beverage (wine, spirits, beer and other non-alcoholic beverages )
China Paper (http://www.chinapaperexpo.cn)        ---- Paper industry
CEF  (www.icef.com.cn)                     ---- Electronics
ICIF  (http://www.icif.cn/ )                   ---- Chemical Industry
Chem China ( http://www.chemchinaexpo.com )    ---- Chemical Industry
CPCA SHOW ( www.cpcashow.com )           ---- PCB, Electronic Assembly
ICE ASIA ( www.ice-x-asia.com )  
          --- Paper, film, foil and non-wovens converting industry
IWE ASIA (www.winefair.com.cn)              ---- Wine & Spirits
CIADE (www.wine-expo.org )      -----Wine & Spirits
PCHi ( www.pchi-china.com/en/ )      ----- Cosmetics and personal care products
BJBE (www.bjmrz.com)      ---- Cosmetics, beauty and personal care products
CBE (www.cbebaiwen.com)    ---- Cosmetics, beauty and personal care products
CIHE&HVAC ( N/A ) --Solar & electricity, renewable energy, heating tech and equipment etc
CEMENT TECH (www.cementtech.org) ---- Cement-related products, equipments and machinery
CAC (www.agrochemshow.com)       ---- Agrochemical and crop protection products
ADEXPO (www.expo-ad.com )      ---- Advertising-related products
FIC (www.chinafoodadditives.com)     ---- Food ingredients, additives
APFE (http://www.zyexpo.com )
      ----Adhesive tapes, protective films, optical films etc, die-cutting
CONCRETE CHINA (www.concretechina.org) – Building materials, construction equipments
SEMICON CHINA (http://www.semiconchina.org) --- Semiconductor technology and products
FPD CHINA  (www.fpdchina.org )  ---- Flat panel display
FUR CHINA (www.fur-fair.com)  ----- Fur and leather products, raw materials
CHINA FISH (http://www.chinafishshow.org )  ---- Fishing products and equipments
LED CHINA (http://www.ledchina-gz.com)  --- LED related products
SILE (www.grayexpo.com )              ----- Lighting Industry (LED)
SIGN CHINA  http://www.signchina-gz.com    ---- LED advertising
ISGF (www.sportgd.com)
     --- Sporting products (all sports-related products, equipments and tech)
ISPO CHINA (http://www.ispo.com )
             ---Outdoor sporting products, sports-related products
CIHF (http://www.c-hf.com )           ---- Hardware products
SIAF CHINA (www.siaf-china.com )     ----- Industrial automation
CNEE CHINA (http://www.cleanenergyexpochina.com)   --- New energy
CMHE (www.gzyfzl.com )      ----- Health care products, pharmacy, drugs etc
CIHE (http://www.cihexpo.com)    ---- Health care industry
CINHOE (http://www.gzspzh.com)
               ---- Nutrition, health food, Organic products, Food etc
CIHIE (www.jianbohui.com) ---- Nutrition and health-care products
CCE (www.chinacleanexpo.com )    ----- Cleaning industry
HOTELEX SHANGHAI (www.hotelex.cn )  ----- Hospitality industry
FHC ( www.fhcchina.com ) -- Food and Hospitality Industry
RLOLF (www.rlolf.com)                ------ Street lighting products
R +T ASIA ( www.rtasia.org )
        --- Windows (rollers, shutters), doors and sun protection industry
E + P SHANGHAI (www.epchinashow.com)
                 -- Electric power equipment and electrical equipment
DENTAL SOUTH CHINA (www.dentalsouthchina.com) --- Dental products and equipment
SINO-DENTAL  (www.sinodent.com.cn)
                     ---- Dental products, technology and equipment
CIFM (www.interzum-guangzhou.com)
              --Woodworking, furniture materials & interior fittings
EXPO BUILD CHINA (www.expobuild.com)
               --- Building materials, design and decoration
GBE CHINA (www.gbechina.com)  ----- Billiards and Billiards Equipment
CIAE ( www.chinaamusement.com)  ----- Game and amusement industry
CHINA JOY (www.chinajoy.net)  
            ----- Game and amusement industry, digital entertainment
CHINAPLAS (www.chinaplasonline.com)  ---- Plastics and Rubber Industry
CWEE ( www.cwee.com.cn )  ---- Wind energy products and equipment
CHINA EPOWER (www.epower-china.cn)
              --Power automation,construction, energy conservation
OIL CHINA (www.oilchinaexpo.com)   ----- Olive oil and edible oil
NEPCON CHINA (www.nepconchina.com )
                 --- SMT equipment and electronics manufacturing
IESD (www.iesdexpo.com )  ---- Surfactant and detergent industry
JEWELRY SHANGHAI (www.chinajewelryshow.com ) --- Jewelry, pearls, gemstones etc
BAKERY CHINA (www.cnbakery.com)  ---- Bakery equipments and baking products
Baking Expo (www.baking-expo.com )  ---- Bakery equipments and baking products
STONETECH (www.stonetech.org.cn)
            --- Stone process machinery, equipments, tech and products
EMC CHINA (www.emcexpo.com)
            ---MC/EMI/Certification/Safety,Electromagnetic Compatibility
CISIE ( www.cisie.cn )  ---- Starch and starch derivatives
PALM EXPO (www.palmexpo.net )  ---- Pro Audio, Light, Music and Technology
NGV CHINA (www.ngvchinaqifa.com)  ---- NGV, gas station equipment
CHINA LAB (www.chinalabexpo.com)  ----Analytic and Laboratory equipments
CISILE (http://www.cisile.com.cn)  ---- Instrument, Lab equipment and machines
JNMTE (www.jinnuo-gzjc.com) ---- Machine tools and molds
AUTO CHINA (www.china-autoshow.com)  --- Auto Industry
IAE (www.iaebj.com)  ----- Auto Industry
BUSWORLD ASIA (www.busworldasia.com) ---- Bus, Coach and Vehicles etc
Shanghai AMTS (www.shanghaiamts.com)
                 -- Automotive manufacturing industry &raw materials
SNEC PV (www.snec.org.cn)  ---- Solar energy, PV industry
Die & Mold (www.diemouldchina.com)
              -- Precision machining, mold-making, forming equipment
BITE (www.bitechina.com.cn)
      --Tourism destinations, attractions & travel-related goods & services
CITM (http://www.citm.com.cn) -- Tourism industry, travel show
CIMAE (www.cimae.com.cn)
     --Agricultural facilities, horticulture, farming materials, machinery
ACHEM ASIA (www.achema.cn)
        --Chemical apparatus & plant construction, lab&analytical tech
CERAMICS CHINA (www.ceramicschina.com.cn)
          --- Ceramics industry (products and tech )
P-MEC China (www.cphi-china.com)
             --- Pharmaceutical machinery, equipment and tech etc
CIMIE China ( www.cimie.com)
           --- Meat industry (products, tech, equipment or machinery )
HOSFAIR (www.gzhoshow.com) ---- Hotel equipment and supplies
CIMES (www.cimtshow.com )  --- Machine tool industry
EASTPO (www.eastpo.net)    ---- Machine tool industry
CBD (http://fair.cbd-china.com )   --- Building decoration industry
CBME (www.cbmexpo.com ) ---- Children, baby and maternity industry, toy industry
Toy & Hobby (http://www.chinatoyfair.com) --- Toy industry
Kids Expo (http://www.china-kids-expo.com ) --- Toy, kids products
CTE (http://www.china-toy-expo.com )  ----- Toy industry
Gifts ( http://www.chinagiftsfair.com )
                    ----- Gifts industry, watches, handicrafts etc
CIWE (www.chinaweddingexpo.com.cn)
                 - Children's Photo, photography, Photo Album &Frame
BIBF (www.bibf.net ) ---- Book Industry (trade, copyright,marketing, press etc)
COALCHEM (www.coalchem.cn)  ----Coal-chem Industry
CIPPE ( www.cippe.com.cn/ )  ----Petroleum & Petrochemical Tech and Equipment
SIFE (www.chinafranchiseexpo.com) --- Franchise Industry
ANALYTICA www.analyticachina.com --- Analytica Industry
CHMTA (www.chmta.com) ----Surgical and medical products
ReChina Asia (www.rechinaexpo.com) --- Printing consumables industry,
Printech ( http://www.printechexpo.com ) ---- Printing industry
SIM EXPO (www.szmexpo.com )  ---- Model Industry
CIBIE (www.bearingfair.cn )     ----- Bearings, Bearing Industry
PET SHOW (www.zycwsz.com)   ---- PET industry
CIPS (www.cipscom.com)        ------ PET Industry
VIV China (www.china-av.net )  ---- Animal husbandry, stock farming industry
CIFTEE (www.ciftee.com.cn )   ---- Financial banking tech and equipment
Prolights Sound (www.prolightsound.com)
                      -- Audio, AV, stage equipment, LED display
Music China (http://www.musicchina-expo.com )  ---- Music instrument industry
MICONEX (http://www.miconex.com.cn
                 --- Instruments industry, measurement instrumentation
Wire China ( www.wirechina.net ) ---- Wire and Cable Industry
CIIF (www.ciif-expo.com)  ----- Equipment manufacturing industry
Bauma China (www.b-china.cn)
                         --- Construction machinery & equip, building material machines
REIFEN (www.reifen-china.com)
            ----Tire industry, rubber & rubber products, auto parts etc
Auto Parts China (www.chinaqipeihui.com) --- Auto Parts industry
Automechanika (www.automechanika-shanghai.com)
                         --- Auto parts, equipment and service
SIPPE (http://www.sippe.org.cn)
         --- Petro, Petrochemical, Natural Gas technology and equipment
HSIM (www.baowenzhan.com.cn )
             --- Insulating materials and energy-saving technology
Inmex China (www.inmexchina.cn) ---- Maritime industry (ships, vessels etc)
CAFEXPO (www.cafexpo.cn) --- Art and Frame Industry
Appliance World (www.appliance-expo.com)
                  --- Home appliance, kitchen and bath appliance etc
CHAE (http://www.cxchae.com )  ---- Home &Household appliance industry
Household (http://www.jdpeijian.com)
              ---- Home appliance production, raw material, spare parts
Domotex Asia (http://www.domotexasiachinafloor.com ) --- Flooring industry
IWTC (http://www.mujiaohui.com/ )  ---- Wood and wood products; timber
Tea Expo (http://www.tea-shexpo.com/ )  --- Tea industry
Teaexpo (http://www.teaexpo.org.cn )    ----- Tea industry
Tea Fair (http://www.teafair.org )     ----- Tea industry
Hardware Expo (http://www.hardwareexpo.cn)
                     --- Hardware and electrical appliance industry
CIHS (http://www.cihs.com.cn or http://www.koelnmesse.cn)
                               ---  Hardware industry
CIFTIS (http://www.ciftis.org)         ---- Trade Service Industry

More information please click here.

Copyright: STIN SOURCING SERVICE TEAM

Sunday, 26 May 2013

New fraud cases and their countermeasures in China

Recently we've come across some different fraud cases from typical scams in China and I'd like to share some of them with Alibaba members here, hoping you'll learn a lesson from these cases in the future transactions:

Case One:
Product related: Chemicals (GPPS and HIPS)
Chinese Supplier: Wuhan Hangyu Co., Ltd (a so-called Gold and trust pass member on Alibaba)
Case Details:
A South African buyer placed an order for GPPS and HIPS with Wuhan Hangyu in Nov, 2012, the client also booked a STIN Company Verification service in China and confirmed that the supplier was a fully registered exporter before payment.The supplier also showed a SGS QC report regarding the target product in China and the SGS report was authentic as well. In March,2013,the client received the container and found out the product received as NOT the one they ordered at all, they look similar but not the same one in their SGS report. Then they came to a trade dispute and the client lost more than 35000 USD for this trial order. The supplier now disappeared in China and local police station is still tracing them.

As far as we know there are many business fraud in the field like Chemicals, Used Cooking Oil, and Mineral (none-ferrous metals) business etc. For those products, the order is normally big and the professional scammer can simply register a very small company in China, then vanish after they obtain the deposit or full cost from the clients worldwide. Lot of cases found that some professional scammers will use Offshore Trade companies as a tool to scam businessmen worldwide. They did have a company and they did send you the goods, but the problem is that they will send you a bag of copper scraps when you're buying Gold from them.

Countermeasures:
1.A Factory Inspection service or Auditing service from a third-party business service company like STIN is very important in China before placing any large orders.
2.A formal Purchase Contract in Chinese and an On-site Quality Control Inspection service is also very important for such cases in China.
3.If the client booked a 'Loading Process Supervision Service'from local experts in China, then such losses could be avoided as well.

Case Two:
Product related: HDMI cables
Chinese supplier: Changzhou Best International Co., Ltd (a so-called Gold and trust pass member at Alibaba )
Case Details:
A UK buyer had a deep communication on all the trade terms and conditions with this supplier in China (the direct contact is: David Lee ), later they reached an agreement on everything and got ready to make a deal, and the buyer –Mr. A ( True names are not allowed to display without permission ) remitted more than 2000 USD to Changzhou Best International Co.,Ltd in Oct, 2006, as a deposit or down payment to get the production started in China. Mr. A is very serious with his business and he employed a local inspector from STIN to offer a Basic Verification on this supplier in China before payment, and this supplier does exist in China (confirmed with local officials), the key problem is their credit was too bad ! Later the supplier could not meet Mr.A's buying demand and they didn't ship him anything. They promised to refund by T/T for several times when Mr. A claimed his payment back. They either ignored calls and messages or took it as nothing. So far they have neither shipped any goods to the buyer nor refunded. They badly ruined their image in overseas market !

Countermeasures:
1.Employing a local Chinese to report their bad credit to local government authorities in China directly and get them punished or fined. Bringing an accusation against them if your order is large enough, please note that you may have to collect enough evidence, say a formal sales or purchase contract, verification report, payment receipt etc.
2.A legitimate company could also be a cheater in international trades, you'd better pay them in full only after a Pre-shipment QC Inspection in China.

Case Three:
Product related: auto parts
Chinese supplier: Zhuji Hongxing Co.,Ltd (a Trustpass member from another famous platform in China, but I note their website www.zhujihongxing.com has been closed recently. )

Case Details:
A USA buyer----Mr.B got their information online and contacted their CEO called Tony Lin by emails. They had several pleasant communications and Tony claimed that he was the real manufacturer in China and he seemed to be a professional in this field. Mr. B bought several samples from Tony without any due diligence work in China in April, 2007. The samples were quite good. Good quality, reasonable prices , fast delivery and good communications surprised Mr.B a lot and he fully trusted Tony then, in May, 2007, Mr. B requested an OEM service from Tony's factory and placed a large order, they reached an agreement regarding every trade terms and conditions and both parties seemed satisfied with it. Mr. B paid Tony 120000 USD within 10 days by T/T after they reached an agreement as a deposit to get the production started in China. The rest balance is nearly 200000 USD and would be paid after the production. One month later, Mr.B simply wanted to learn the production information and employed a local business service company to pay a visitation/inspection to Tony's factory in China. Tony explained that he was abroad and inconvenient to meet his rep then for the first time, only a week later all his contact ways have been shut down (telephone, website and mobile phones etc), Tony disappeared in the air. Finally the local auditor went to their factory without notice (according to their address online, offered by the client ), to our great surprise, their company did not exist at all, nobody in the offices except an old man reading newspaper there. Their address is true but it's for another company in China! That's to say, the scammer is cheating the clients by using other companies' information! So Mr.B lost more than 120000 USD. ( I guess the scammer Tony just bought the auto parts from other factories in China and tried to gain the trust from foreign buyers for the first time.)

Countermeasures:
1. Samples could be good but it does not mean their massive production would be the same in China. Signing a formal contract with any of your suppliers for sake of better protect of your interests, esp when your order is large enough.
2.Fulfilling a Basic Company Verification on your supplier to make sure he is not a scammer and qualified enough to be your business partner in China.
3.Fulfilling a detailed auditing service if you'd like to place large orders and a during-production QC inspection and a pre-shipment QC inspection is very important for such cases. A local expert can help you a lot in such cases.

Case Four:
Product related: human hair products (wigs)
Chinese supplier: China better hair co., ltd (This is a SilverKey member from another well known platform----Tradekey )

Case Details:
A Portugal buyer----Mr.C got their information online and contacted Mr.Guo----the foreign trade manager from Better Hair in May, 2007. One month later Mr. C placed a trial order with them in China, amounting over 5000 USD. What Mr. C required is 100% human hair products and Mr. Guo is also selling authentic human hair wigs as well as synthetic hairs. Mr. C met lot of trouble in his market as he received lot of complaints from his customers in Portugal, claiming their product is not 100 % human hair and mixed with animal hairs and synthetic hairs etc. Mr. C suffered great loss owing to the quality issue.

Countermeasures:
1.The best way to avoid such cases is to book a Pre-shipment QC Inspection from a local expert team like STIN before delivery in China, esp when your order is large enough.
2.Don't forget to sign a formal contract with any of your suppliers, apparently this supplier is a trade company in China but they claimed to be a real manufacturer in this field. Why not audit them before payment? It would be much easier to control the quality if you deal with a factory directly. 

3 out of 3 Gold or Trust Pass Members fail site Inspection

Last week I paid several factory visitations to some Shenzhen-based companies in China upon request of some foreign buyers.
All the three companies are Gold member or Trust pass members in Shenzhen, who all claimed that they were real manufacturers of electronics in China. I’m sure most of the foreign businessmen will be astonished at the result of my visitation in Shenzhen; here is the basic information from our On-site Factory Inspection Report:
Company One: 
Declined my visitation on the pretext of goods shortage, but they promised to receive us before our departure to Shenzhen. 

Company Two: 
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 HK. 

Company Three: 
This is the best one among the three. 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 registered only on 2005.08.26; however, they claimed themselves they registered in 1999 online. 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!! 

My suggestion:
You’d better deal with larger trading companies or manufacturers directly for sake of better quality control and after-sale service in China. Lot of trading companies disguise to be a real manufacturer in China, so a factory auditing or inspection service is very necessary for a large order in China! A factory inspection can tell you everything about the supplier and it’s one of the best way to verify your Chinese supplier at present ! 

What can a factory inspection performed by a local 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 inspector can enquire about the factory’s production capacity (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 inspector 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 inspector 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. 
STIN (China) Business Service Co., Ltd (www.chinabizservices.com or www.bizinchina.cc ) offers a ONE-STOP business solution services for their clients worldwide,covering Sourcing, Quality Control, Verification, Factory Inspection, Shipping etc. Any question is welcome. 

Tips for how to find a good purchasing agent in China! 

Should I work with a Chinese purchasing agent or buying office? Lot of foreign clients raised this question to me. Actually a good purchasing agent service plays a very important role among international trade nowadays in China, it's a bridge for sellers and buyers, however, it's hard for foreign buyers to choose a good purchasing agent in China too. A good purchasing agent can act as your own 'buying office, assistants and eyes' etc. There are not only lot of Chinese individuals working as a purchasing agent but also lot of service companies like STIN offering‘Purchasing Agent’or‘Buying Office’ service in China. Of course it is better to work with a company as they are a team of professionals or local experts. I also heard that an individual purchasing agent in Guangzhou disappeared suddenly after he got lot of deposit from a French client last year.

Please also have a look at these posts: Why do You Need a Purchasing Agent and How to Find a ONE in China:

Any qualified purchasing or sourcing agent in China must feature as following:
1. Good morality and Reliability
There is a Chinese saying goes as 'All the business shall be built based on reliability and credit.’So the good agent will take‘credit, reliability and reputation’as their life, they should never cheat their clients during any formal business. How to check the credit of your‘agent’service? Ask them for references at your end and fully check them out before formal cooperation.

As a sourcing or purchasing agent, they should behave well and protect foreign buyers' interests in China at all times. He should never 'sell' his buyers to scammers in China, and never eat his own words, never cheat buyers as well as sellers. As far as I know, some purchasing agents even ask for kickbacks (commission) from both sides (the seller and buyer). This is terrible for a good purchasing agent service in China but those agents are mostly individuals as every formal service company has strict regulations on such cases in China, this is another important reason that you'd better work with a service company instead of an individual in China.

2. High-quality Service
High-quality service features as: Smooth Communication, Efficient Work, Fast Feedback etc. Some service companies require instant communication with their clients and some require 12-hour-feedback, which means all the inquiries shall be replied within 12 hours.
Good command of English or other foreign languages, both in written and verbal forms are also required. Language is very important in communication among businessmen worldwide. However, there are not so many people speaking fluent English or other foreign languages in China, esp for some individual purchasing agents.

3. Rich import and export experience
Rich experience in this field can result in a fast solution for some problem in your business in China: sourcing, quality control, shipping, customs clearance, documentation, insurance etc. Any qualified purchasing agent should also have good relationship with local government authorities and have rich knowledge on China's policies in import and export business; All the latest regulations or laws regarding export and import in China should be kept in mind.

4. Rich experience in sourcing and purchasing the target product.
As a purchasing agent he should be very familiar the target product in this field, say, how to source and purchase the target item as soon as possible?
Where is the best place for this product?
How many well-known trade fairs are linked with this product?
How can I obtain the most favourable prices? Etc
Where are the manufacturing bases for this product?
Actually each city or province in China has their own pillar industry, so you can check the market information first before sourcing suppiers or purchasing agents. For example, Liuyang is called ‘Home of Fireworks', there are more than 400000 peole directly or indirectly engaging in fireworks production or sales in China, ‘Liuyang-made’fireworks account for 70% of China market and more than 40% of global market at present. So when you're sourcing fireworks, you can simply come to Liuyang and work with some local purchasing agents there when necessary.
You can raise as many questions as possible to check your agent whether they have enough experience in this field or not before formal cooperation.

5. Be familiar with your product or industry.
Try to work with a professional agent. You have to forget them if they know nothing about the product specifications, technical descriptions or industry associations etc. For instance, if you're buying ductile iron castings, you'd better find a service company with rich experience in this field because there are so many terminology in this field. Of course there are some terminology in any other field, the same word may carry different meanings in different fields.

6. Have a good knowledge of international laws and regulations related.
As a purchasing agent, he has to learn much about some international practice, including the quota issue, certificates issue, anti-dumping issue and tax issue etc. For instance, if you sell beef to Musilin countries, your products have to been certified with a special label and ratified from your target country.

Please also have a look at this post: What is a Professional Sourcing and Why?

So when you choose a purchasing agent in China, you'd better ask more questions and be careful as well! As a professional sourcing, purchasing, business services office located in China, STIN (www.chinabizservices.com or www.bizinchina.cc) warmly welcome any reliable foreign buyer to visit and have business.Our mission is to save you more and reduce the risks in your business in China!


What to do when you receive fake products or replicas from China suppliers?

Whether you're doing some personal shopping or sourcing goods or raw materials for an import-export business, it's safe to say that buying online is one of the fastest and most convenient options available.
However, while online purchases are generally very safe transactions, there is always the chance that something could go wrong - for example, you could end up with fake products. So is there anything that can be done if you open a shipment only to find that the item inside the box is not what you were expecting? Here is a quick guide to dealing with fake products. 

Act fast
If you receive a fake product from a supplier, fast action is essential. If you are indeed working with a fraudulent seller, they could disappear quickly and there will likely be a contractual time limit to getting a refund. 

Contact the supplier
Gather proof that the items are counterfeits, present these to the seller and ask for an explanation. If they offer a refund, make sure they absorb the cost return shipping - the threat of further action can help you be more convincing, but remember to always stay civil and calm, as it's possible the vendor was unaware of the problem.
Get in touch with your payment company
If you've paid for a shipment with your credit card or PayPal, you will probably be protected against fraudulent dealings. Each company will have different procedures for processing disputes, so get in touch with them to find out how to proceed. 

Leave negative feedback
Consider leaving feedback about the situation to warn future customers about potential problems, but be sure any claims you make can be supported, as you don't want to be caught with a libel claim against you.

Contact the authorities, and the genuine brand
This will vary, depending on your location, the location of the seller and the specifics of the situation, but in most cases you should get in touch with the authorities to report the goods.
The real brand or manufacturer may also be grateful to receive tips on fake products, and the evidence you provide will help them with investigations.
Please contact MOFCOM for official assistance: www.mofcom.gov.cn 
Contact STIN service team for help if you know nothing about Chinese: