Nearly every week we receive and hear about cases where a foreign company faced problems on importing from China, for different reasons. If you want to go into business with a Chinese supplier, but are concerned about quality or safety issues, and even about payments terms, know that if you take some preventive measures on your side, you can safely import from China.
There are several common fears or dilemmas among foreign companies willing to import from China, a lot of examples of what works and what does not work, as well as numerous ways to avoid problems and mistakes on doing business.
As for the common concern of quality and safety compliance of goods produced in China, it is very important to be aware that you can find all types of products and quality from Chinese suppliers and it is your responsibility to make sure you choose the right supplier and that what you are importing safe goods. In this regard, the following measures are advisable:
- Be aware of quality certificates and compliance, trade tariffs and barriers;
- Make sure that the Chinese manufacturer or supplier is familiar with safety regulations of the market where you are willing to sell;
- Visit the manufacturer (or entrust a professional to do so) to check whether the safety compliance standards match with your requirements;
- Communicate with Chinese manufacturers/suppliers on your product requirement again and again, and then check, check, check. (Chinese companies may not fully understand the product functions, quality requirements and life styles in western countries and hence may manufacture “good” products to their satisfaction but not to your standard);
- Get samples and send to a lab from your own network in order to test the quality;
- Verify the quality of the raw material and accessories before the production starts and during the production process;
- Conduct pre-shipment quality inspection.
What is more, foreign businesses must bear in mind some must-knows and take necessary preventive actions before and /or when importing from China:
- Select a capable and reliable supplier (There are several methods to check if a supplier is legitimate. If you are new to business and do not know how to proceed, find an import/export business training program or hire an import/export agent to guide you through the process)
- Be aware that subcontracting is very common in China and that many times you are dealing with an agent and not the actual manufacturer
- Have written contracts, signed (in China they also have to be chopped) and valid upon local laws (find a lawyer who understands the local legal environment to check the contract for you)
- Keep records of all promises regarding terms and conditions of the business
- Visit (or hire someone to do so) the factory frequently
- Avoid exposing all your intellectual property in the hands of only one supplier
- Verify raw material and accessories before the beginning and end of production line
- Communicate with people personally and by phone, but always confirm in written (double-check)
- Have a reliable supplier as backup plan
- Make Quality Control prior to shipment and 100% screen for defective goods
Should you follow the measures mentioned on this article, your chances of having problems with imports from China lower considerably or, at least, the chances that you can have a problem solved is much higher than if you decide to go into business without a preventive attitude.
Did you know that...
In most cases, export-oriented Chinese manufacturers do not have a big profit margin but live on the mere margin gained from VAT return for goods export. If the price is too low, usually means that the Chinese manufacturer does not want to lose orders to competitors and hence has compromised quality to gain a reasonable profit margin for himself.
China holds major trade fairs and China import and export Fair is held every April and October in Guangzhou (Canton Fair). Visiting trade shows is a good way to see/meet suppliers face-to-face.
Usually an initial deposit of between 30-50% will be requested by a Chinese Manufacturer to get your product/order into production.