Four ways to avoid getting caught out by Chinese suppliers

2 September 2013
There are a number of telltale signs and tricks that some Chinese suppliers use on foreign purchasers. Awareness of these tricks has helped me avoid paying higher prices and avoid being scammed all together. Here are my top four. 1.    Pinching hired help Hiring a local company or individual that specialises in assisting in negotiations, or in sourcing the specific products the buyer is looking for may be counterproductive. The representative might be introducing you to suppliers who already have secret kickbacks in place for their business referrals. Buyers can avoid this by doing preparatory work with due diligence before arriving in China. Source and confirm prices and quantities before arriving at the supplier’s location. This will give you a good idea of what the prices should be, and will prevent the prices from changing when you get there. Talking about the prices when you arrive is not always a good idea. 2.    What you buy is not always what you get Personally travelling to a manufacturer does not necessarily help with getting what you paid for. The products I received in Toronto were sometimes not the perfect models I chose on the factory floor. As soon as I left the factory, they shipped me sub-par models. To avoid this trouble, I send my local China mainland buyers to the factories. Once the goods are approved, they immediately load them and ship them to my Chinese warehouse, or we inspect them after delivery at the warehouse and refuse all damaged goods. It is important to use soft diplomatic negotiations to receive discounts or replacement parts. Getting angry or using tough negotiation tactics can lead to being simply ignored by the supplier. 3.    Same product, different quality and appearance When placing continual orders of different quantities for the same products I have experienced varying degrees of quality and appearance. This happens because manufacturers can have a variety of suppliers for the same raw material or pre-assembled components. It’s important before you buy to ask a lot of questions. One of my first is to ask if they are the actual manufacturer for all the components. This may seem strange, but frequently I find the manufacturer does not make the most of what goes into the products. Most of the time they only assemble the components, sometimes up to 100 per cent. 4.    What you see is not always what you get There are many factories and suppliers in China that display identical online products. Even the images can be identical, which frequently happens on online marketplaces. Most manufacturing districts in China are grouped, with manufacturers making the same or similar products. Most of them have alliances with their competitors that work in mutually beneficial ways. Some of the images on display are actually products the specific factory has never made before. My mainland buyers always visit new factories to view new products. I suggest collecting the supplier’s address and contact information before you schedule the visit. Local representatives can identify whether the supplier’s location is the actual location by reading the Chinese characters on the walls, signs and boxes in the factory. Match supplier contact phone numbers with any actual factory brochures or business cards found on site. A more detailed article, with more tips and tricks, is available on David Jung’s websiteDavid Jung is a purchaser and supply chain manager
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