Some
fascinating insights into the tricks used by unscrupulous Chinese
suppliers to part western businesses from their money in this post from fellow China blogger Dan Harris of law firm Harris & Moure.
It's probably old hat for China old hands, I guess, but required reading for neophytes.
Dan makes the point that there are plenty of good manufacturers in China but you're not necessarily going to find them if all you rely on is a listing on a website or a faxed price list.
That's why its so important to do due diligence on new Chinese suppliers and there are plenty of local companies that specialise in this area.
A due diligence report from a local firm can cost less than $1,000, although it will be in Mandarin. At the very least, it will confirm that the supplier you plan to use actually exists. Dan says:
I have seen far too many times where companies have ordered and paid for product only to later learn that the 'company' from whom they were buying the product does not really exist. My firm is right now seeking to recoup more than $2m for product that was never delivered by a company that never really existed. Do not let this happen to you."
Another problem, and one I have heard from plenty of other sources, is that the goods delivered are not up to scratch. The attitude towards quality is often starkly different, according to Titoma, a Taiwanese firm that helps western electronics designers manufacture in China:
The famous Chinese phrase 'Cha bu duo' meaning 'It's not too far off' for many a factory still means 'ready to ship'."
The company argues that quality inspection has to be an essential part of any strategy to outsourcing manufacturing to China. Paying for good quality inspection is an"insurance premium" that no experienced China buyer goes without.
Again, there are plenty of third-party firms which, for a price, will do quality control inspections. Another option is to employ someone locally that you trust to keep a hawk-like watch over the products that get made and, equally importantly, ensure they are the same products that end up in the crate.
Hat-tip to Dan for finding Chief Asia Inspector, a fascinating site that gives a behind-the-scenes look at quality control in China and other Asian countries. The blog is run by AsiaInspection, a firm that charges from $288 for a quality control inspection anywhere in China.
Another good blog on the trials and tribulations of sourcing from China is Chinawhite, which has an amusing story on quality control here. Unfortunately, Chinawhite seems to have gone quiet in recent months.
