Highlights from: How to Do Due Diligence on Chinese Suppliers?

We’re often asked, “How to Do Due Diligence on Chinese Suppliers?”

SupplierBlacklist.com would like to thank the lawyers at AsiaBridge.com for mentioning our blacklist in their article entitled “how to do due diligence on Chinese suppliers?”.   Below are some of the highlights from their article.

You can read the full article at http://www.asiabridgelaw.com/2017/04/due-diligence-chinese-suppliers-sure-safe-business/

How To Do Due Diligence on Chinese Suppliers: Before you send money!

A good majority of the listing at supplier blacklist could have been avoided if the buyer conducted some basic due diligence.  The good news is that this kind of research can be conducted for a low cost or even free.

How to Do Due Diligence on Chinese Suppliers

 

How to be safe when buying overseas? How to do Due Diligence?

When we talk about verifying the legitimacy of a factory we are really taking a look at 3 distinct levels of security which fall under the general category of Due Diligence.

Scam Assessment:  Is the company real?

If yes, move to level 2:

Corporate Assessment:  Who owns the company? Does the seller have a good reputation? Are they financially stable?

If the research findings are positive, we move to level 3:

Quality Assessment:  Does the supplier have the ability to product the products I want to buy?

Who Conducts Due Diligence and How Much Does It Cost

Affordable options for Scam Assessments

A Red Flag Assessment (RFA) is the ideal tool for clients who are buying from Chinese suppliers.  The RFA will help you source safe, avoid scams and confirm that the terms of the deal are fair. Visit here to see a sample RFA and learn more about the service/fee structure.

Free/DIY Options For Corporate Assessments

Ask For References!

Most buyers skip this important step. But it doesn’t cost anything to ask for references and follow up with an email or phone call.  Suppliers are unlikely to hand out their entire customer list, but if they can’t give you one or two happy clients…run away and find a new supplier!

Visit the Factory

This may be the single most important step in finding the right supplier when doing your due diligence on Chinese suppliers.

Sales people in China are very good at telling you what you want to hear.  So visiting the factory can be a real eye opener and while you are there pick up a copy of the business license and verify that the name on the license is the same name as on the purchase contracts and matches the name on the bank account.

 

Free/DIY Options For Assessing the Factory’s Quality Systems

Without visiting the production site in person while doing your due diligence on Chinese suppliers, it’s hard to assess if the seller has the means to product the given product you want to buy. Do not just make it one time, but make it over and over again at the quality level, lead time and pricing point you need.

Managing Expectations about Due Diligence in China

Things change fast in China. If key managers leave or the product line is changed, good suppliers can go bad overnight.

So if you are paying for due diligence, ask how “fresh” it is!

 

In conclusion, if you want to protect yourself. Follow the rules the lawyers at AsiaBridgeLaw.com suggest:

  1. Scam Assessment (Level 1):  Is the company real?

  2. Corporate Assessment (Level 2): Who owns the company? Does the seller have a good reputation? Are they financially stable?

  3. Quality Assessment (Level 3): Does the supplier have the ability to product the products I want to buy?

 

20 comments on “Highlights from: How to Do Due Diligence on Chinese Suppliers?”

      1. Dear LucyAna,
        Please follow the forum rules and submit a post for the company you want to blacklist at https://www.supplierblacklist.com/buyer-complaint-form. We would be happy to publish it. It is not appropriate to talk about a company other than the one which belongs to this particular listing. You has been asked 12 times to follow the rules and the web team is in the process of removing the name of the company you are trying to expose from your recent comments. If you continue to ignore the forum rules you will be removed from our system and all your comments deleted.

        Please confirm you understand that you need to make a dedicated listing for the company you wish to expose and you can not post comments about that company on other company’s listings. Thanks for your understanding.

  2. i’m anand king, i knew OTHER COMPANY NAME REMOVED HERE from a trade fair, the CEO was very nice and gentle firstly, the previous orders were excellent , but when i gave them the big order , then the disaster was coming, i let the inspection agent to do the job, the inspection report was good, but when i received the goods find many defults, i suspected the supplier bribed to the inspection agent, but the inspection agent only responsible for the goods they check , not responsible to the final goods, i sent many emails and called many times , the CEO of OTHER COMPANY NAME REMOVED HERE never reply , OTHER COMPANY NAME REMOVED HEREis only a HK company, i also did not find their official office in China Mainland, where are they hiding? total fake scam scum company .! i had long time to forgot this terrible supplier, not all of chinese suppliers are bad, just need to choose the good relaible ones, for inspection agent, i choose OTHER COMPANY NAME REMOVED HERE mostly after this terrible case

      2. Dear LucyAna,
        Please follow the forum rules and submit a post for the company you want to blacklist at https://www.supplierblacklist.com/buyer-complaint-form. We would be happy to publish it. It is not appropriate to talk about a company other than the one which belongs to this particular listing. You has been asked 12 times to follow the rules and the web team is in the process of removing the name of the company you are trying to expose from your recent comments. If you continue to ignore the forum rules you will be removed from our system and all your comments deleted.

        Please confirm you understand that you need to make a dedicated listing for the company you wish to expose and you can not post comments about that company on other company’s listings. Thanks for your understanding.

      1. Dear LucyAna,
        Please follow the forum rules and submit a post for the company you want to blacklist at https://www.supplierblacklist.com/buyer-complaint-form. We would be happy to publish it. It is not appropriate to talk about a company other than the one which belongs to this particular listing. You has been asked 12 times to follow the rules and the web team is in the process of removing the name of the company you are trying to expose from your recent comments. If you continue to ignore the forum rules you will be removed from our system and all your comments deleted.

        Please confirm you understand that you need to make a dedicated listing for the company you wish to expose and you can not post comments about that company on other company’s listings. Thanks for your understanding.

    3. Dear LucyAna,
      Please follow the forum rules and submit a post for the company you want to blacklist at https://www.supplierblacklist.com/buyer-complaint-form. We would be happy to publish it. It is not appropriate to talk about a company other than the one which belongs to this particular listing. You has been asked 12 times to follow the rules and the web team is in the process of removing the name of the company you are trying to expose from your recent comments. If you continue to ignore the forum rules you will be removed from our system and all your comments deleted.

      Please confirm you understand that you need to make a dedicated listing for the company you wish to expose and you can not post comments about that company on other company’s listings. Thanks for your understanding.

  3. What I agree with is that no matter which country, visit the factories of the suppliers before purchasing the products of the suppliers. it’s hard to assess if the seller has the means to product the given product you want to buy. Do not just make it one time, but make it over and over again at the quality level, lead time and pricing point you need.

  4. I have logged in to Supplier Blacklist and I want to find the List. The instructions say: “Then click the search button and enter your keywords or a company name into the search box.” I can’t find any “search button” and can’t find the List. How do I find the search button?

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