How to Evaluate Chinese Suppliers?

Posted by dgxchen

When sourcing from China, one of the most important things you as a buyer need to do is to make sure you are working with the right supplier. So, where do you start?

 

Define your ideal supplier. This is unique to each buyer and depends on a number of factors, including price, quality and lead time.

Define your location. Where factories are based should also play a role in supplier evaluation. While factories in China’s northern and western provinces have lower manufacturing costs, the quality is often lower. Those located along the coast and in the southern region have higher production outlay but the quality is generally better. Note as well that the farther inland you go, the more expensive your logistics costs will be.

Look in the right places. B2B websites can help buyers find suppliers, but it’s highly recommended meeting suppliers face to face. Further, always do your due diligence and verify suppliers before working with them.

You must visit the supplier yourself or pay someone to do it for you BEFORE you wire any money.

Narrow down your choices: You should narrow down potential suppliers based on non-price attributes before initiating contact. This is basically sending an email to ask for product-specific information, including price, minimum order quantity and lead time. Below are some points that are often overlooked when requesting for quotations.

  • Mould charges
  • Payment terms
  • Quality requirements
  • Bill of materials
  • Packaging

How to identify a legitimate manufacturer:

  • Avoid factories that refuse to list the name or location of the production facility.
  • Focus on factories that can clearly show manufacturing experience with your particular product or production method. They should have samples and quality documents readily available if they are a real factory.

If you are able to arrange a factory visit:

  • Do your contact’s business cards match the factory staff’s information? If the cards do not match in name, color and address, then your contact is probably a middleman.
  • Do the people at the factory clearly know your contact?
  • Look for clear information about operation size, equipment and staffing.
  • Be wary if the supplier offers a very large range of products.
  • Be aware that polished English skills do not reflect production skills. Often the most polished websites are set up by trading companies.
  • Ask for ownership papers of the factory.
  • Be explicit that the production location may be audited by you in person.
  • Spend more time on the production floor than anywhere else.
  • Visit as many sites as possible.
  • Inspect workflow systems for efficiency and check whether they are actually practiced.
  • Test your supplier’s understanding of your product’s requirements.
  • Request samples to be sent to you, to your exact specifications (pay if necessary).
  • Evaluate the factory’s quality system.

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