Last week I paid several factory visitations to some Shenzhen-based companies in China upon request of some foreign buyers.
All the three companies are Gold member or Trust pass members in Shenzhen, who all claimed that they were real manufacturers of electronics in China. I’m sure most of the foreign businessmen will be astonished at the result of my visitation in Shenzhen; here is the basic information from my visitation report:
Company One:
Declined my visitation on the pretext of goods shortage, but they promised to receive us before our departure to Shenzhen.
Company Two:
Received us at an office in a Hotel, there are 3 salespersons working in the office. We cannot even find a Logo on their company in the office and on the door. They are checked out to be a small offshore trading company in China.
Company Three:
This is the best one among the three. They are a registered small trading company in China, however, they do not have their own right to export ( I mean they do not have the Certificate of Import & Export issued by local government authorities ), they normally export their goods via Freight Forwarders, for which the buyer may bear some risks.
They registered only on 2005.08.26; however, they claimed themselves they registered in 1999 online. They do not have any factories at all. They cannot show me any quality control measures and after sale services in written forms; they cannot even show me a formal sales contract!!
My suggestion:
You’d better deal with larger trading companies or manufacturers directly for sake of better quality control in China. Lot of trading companies disguise to be a real manufacturer in China, so a factory visitation or inspection is very necessary for a large order in China! A factory visitation can tell you everything about the supplier and it’s one of the best way to verify your Chinese supplier!
What can a factory visitation performed by a local bring you?
As we all know, there are many false things on the web, which perplex us often when we are going to make a decision. The case is also true with buyers who are going to buy from oversea suppliers. Here I bet a factory visitation (better by a local person) is a second-to-none solution.
1.Genuine or False?
The local person can go and check the company (the potential seller) and all its factory registration information to see if it’s a genuine and serious enterprise. This is the basic thing that any buyer has to do before any sincere cooperation!
2.Production Competence (Throughput)?
The visitor can inquire about the factory’s producing ability (also known as throughput) with the director of Production Department. How much can they produce in a month or a quarter? By learning their production competence, the buyer can avoid the risk of a delayed delivery to some extent.
3.Quality Control?
The visitor can try to get to know the factory’s quality control system with the help from the director of Quality Control Department. He can also get to know more by inspecting their assembly lines or work shops. Good quality is always one of the crucial things that buyers are always pursuing.
4.After-sale Service?
After-sale service is also important for buyers. Here the visitor or inspector can make sure if the factory can offer good and effective after-sale services and also confirm if they can include after-sale services as one clause in the contract? After-sale services can keep you free from some troubles.
5.Export License?
Some suppliers do not really have export license. Here the visitor can check the supplier’s registration information with the local customs to see if it can really export directly to the buyer’s country. This is also one of the factors that can free you from being scammed. Other qualifications of the supplier can also be checked out by a local expert in this field in China.
Thank you for your attention, good luck, everybody!
![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif){kind=icon}
Justin Yuan from Changsha, China
Why don't you disclose the details of those gold and trust pass members so that everybody can aware off?
![[em12]](http://img.alibaba.com/images/eng/style/icon/emoticons_surprised.gif){kind=icon}
YOU DA' MAN!!!! GREAT ARTICLE. HOW BOUT TELLING US WHO THEY ARE
Quoting from [Business in China]:
Really it is astonishing and at the same time sad to hear this kind of report about China companies: If this is the situation how it is possibel to find a good manuacfture and a supplier in CHINA. If this is the thing going on it is become S.African scammers.
your information is very useful. please give me a clarification. How can we verify the credibility of a company in china, without visiting china. This is a serious problem we are facing. If we find a solution to this problem we can do bigger business with chinese exporters.
this is very good info as I used to suspect about the gold and trust pass holders. Not all of them are like you mentioned here however it does impact others as well as whole market just like a single rotten potato makes whole bag worse. thanks for the information.
robinkharel
rnrdigitalworld ltd
sales@mobilephones-expert.net
London, UK
Factory Inspection..would simply mean the inspection of the factory..its address..its constitution..its business..its licences and registrations...its products..its plant and machinery..its quality control methods..its certifications and awards..its manpower..its bank accounts etc..etc.
Factory Audit...(has to be carried out by a registered Chartered Accountant-this should take in a couple of days) would simply mean preparing an audit report to verify the claims of the company for past performance on account of its sales--purchase--profit and loss--turnover--balance sheet--loans and credits(from banks and institutions)--the creditors and debtors--over a period of time(2/3 years)---and the forecast and projections of the company.
Replying to [adseaco]:
No, not quite ... the role of a factory auditor is different to a financial auditor ... please go to this link to get an insight into the meaning of Factory Audits ...
http://resources.alibaba.com/topic/17102/8_Do_I_need_a_Factory_Audit_.htm
Incidently, fraud and shipments of shoddy goods could hardly happen if members spent a couple of hundred dollars for factory audits and pre-shipment inspections before parting with hard cash to suppliers.
Do not be scared to deal with Chinese suppliers, most of us are reliable and honest. Please note that scammers are mainly in the field of electronics or some hot &fast-selling products. For example, Xbox360, actually, there is no factory so far that has been authorized to produce and sell in China, why are you buying them at extremely low prices in China? Who can afford you this product? On the one hand, some scammers making lot of replicas or fakes in China with cheaper materials. On the other hand, some cheaters got this information before and they try to 'sell' you with nothing. That's to say, they required advancement payment and did not deliver you anything at all, some may claim that your goods have been confiscated for some reasons. For some offshore companies, it's even hard for Chinese police to help you out as everybody can register a company in Hongkong with little money in China. But for other manufacturers, I think it's quite safe.