The best way to find a reliable supplier in China. Part 4 of 4

What people are saying about Mulberry Fields
“I have read through quite a few of your blog posts and have enjoyed them very very much. We do business in China and face many of the challenges you describe. Much of what you write resonates with me and there are some very helpful tips”     -an apparel company in Utah.

So you have found three suppliers from your Canton Fair visit.  These are vendors you have met in person and worked closely with on samples over 2-3 months. You are pleased with their costs, the quality of their samples and, most importantly, their communication. You are beginning to feel in the comfort zone with these people. The final step is to make sure they are who they say they are.  To do this you need to visit them.

But before you visit your prospective vendors, a preliminary step should be to do a credit check on them with a China business verification service. Some of these services are expensive. Some are very reasonable but this is a step you definitely want to take before you arrange visits with any potential suppliers. The service I refer my clients to costs about $ 250 for a credit report on a Chinese company, much more reasonable than D and B who also offers this service. The report my clients receive tells them all about the company including, number of employees, date company was established, annual revenue as well percentage of domestic and overseas sales. The report will also detail any important events in the company’s history e.g. a name or location change and any litigation the company has been involved in. It is a fairly lengthy report.  In fact what you should do is ask the company some of these same questions and then cross check their answers with the credit report to make sure there are no glaring inconsistencies. You are about to risk your business on an unknown and untested supplier in a country which is a wasteland of failed sourcing ventures. It behooves you to know as much as you can about your supplier and try to establish early on if they are trustworthy or not. Credit reports push you in that direction.

Let’s say that after you run a credit report on your three prospects you do not feel the credit report of one of the vendors was acceptable. That leaves you with 2 vendors. These are the vendors you have decided to visit.

When you go to China to visit a new vendor, you should count on spending 3 full days with each vendor. In this time you can see their facility and discuss your projects with them.  You should have a factory checklist just as if you were doing an audit. But the purpose of the trip is mainly to make sure that the vendor you have been working with over the past few months does in fact own the factory (you would be surprised).  This will be apparent early on as you the vendor interact with the people at the factory.  If you have asked for photos of your vendor’s facility when you first started sampling with them (highly recommended), you will also be able to verify that the facility is the same all along. If your vendor takes you to a place that you do not recognize from earlier photos then you have a red flag.  You should also devote a full or at least half day to local sightseeing ( you are paying your respect to China by doing this and it is a very important ritual in vendor visits). What you don’t want to do is rush in and rush out, as if you are telling the vendor all you care about is your product and cost. In short, the more time you spend with your supplier the better you will know them –for good or bad. Again, don’t rush in and out.

Generally you should be able to visit 2 vendors with a 7-10 day trip in China. Vendors will arrange your hotel for you ( and may even pay for it) and they will pay all your meals for you, so in a sense all you have to do is pay your airfare. That is a pretty sweet deal in and of itself. You may end up spending 3-4 K on your trip which is nothing compared to the sales you will have if you are able to deliver quality product to your customers when they want it.

www.theeastasiaco.com

Here are the other posts in this series:
Part 3
Part 2
Part 1

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