Eliminate Risk and Don’t get Scammed. Payment Protection in China Using Chinese Sourcing Agents insider secrets
A – Alibaba
M – Manufacturing agreement
V – Vet manufacturers
I – Inspect products
Avoid spending money and receiving poor quality, the wrong products or nothing at all.
Buying from a Chinese manufacturer?
In this short post we cover payment protection.
Table of Contents
Why Buy Though Alibaba
If you have the option, buy through Alibaba. Think of Alibaba as Amazon, it’s in their interest for you to keep buying, so they do all they can to protect you. This does not mean things can’t go wrong. Here’s how to do it right.
Writing Manufacturing Agreements
Use a manufacturing agreement (download free sample at the bottom). This should outline:
Terms
Lead time
Pricing
Inspection
Warranty
Product specifications
Appearance
Quality
Function
Material
Packaging
Appearance
Don’t assume because you have a sample from the factory that the final product will match.
Don’t expect Alibaba to protect you if you have not defined appearance.
Be very clear with product specification.
There is no reason for a factory to reject detailed product specifications.
Click to download
FREE manufacturing agreement.docx
Quality
Quality can be defined. Cotton density, steel tensile strength, thread count, wood thickness, powder coating.
The bottom image is the original and the top is the final product. Can you see the difference?
If you don’t understand how to define appearance of quality, please get in touch.
Alibaba and your manufacturer believe this is close enough.
Do you think these are the same quality? We do not.
Function
If you buy a medical thermometer, you want it to be accurate, but what is accurate?
Many products have defined and measurable functions.
A medical thermometer would need to be CE or UKCA certified.
An actuator on a perfume bottle, how much should it spray on each squeeze, 1ml or 2ml?
Be clear about how you want the final product to function.
Material
Covered by quality but deserves an extra mention. Remember phthalates, no?
Phthalates were in all sorts of plastic products, they leak out of the product and into you, they also have links to heart disease.
Be aware that the materials used can be deadly so it’s important to know and define.
Packaging
This is part of the product so be clear about its appearance, quality, function, and material. Your packaging adds to the appearance of your product and brand.
It should also protect the product.
Buying Directly from the Factory
Now you definitely need a manufacturing agreement (free download at the bottom).
This manufacturing agreement should be in Chinese as well as English.
Imagine taking a Chinese contract to a UK court, not going to fly is it.
If something goes wrong and you end up in Chinese court and you only have an English language contract.
Of course you don’t want to end up in court trying to recover your £30k, so you want to vet the manufacturer before hand.
Ask for the factory’s:
Business licence
Owner’s ID card
Vet the manufacturer
Use the link below to check if the factory has any legal issues. If they’ve been sued a bunch of times then it’s not a good idea to work with them.
The link bellow allows you to input the factory’s name (in Chinese) to get an overview of their size and legal standing.
Inspection
You can do simple inspections for simple products, such as a video call with the factory.
If you have invested a few grand on the products then another couple on the freight and duty, it is worth not spending an extra £185 to be sure.
You’ll get an inspector in the factory for a day and you’ll receive a full report that will show if there are issues need to be corrected.
We often use www.hqts.com.
Click to download
FREE Inspection Report Sample.pdf
CautionaryTtails
These are all real
Straight up criminal
Buyer bought 20ft container of BAC50 (a chemical), received a 20ft container of water. Factory refused to help. This was not through us but before the customer worked with us.
Could have been avoided with inspection.
Initial vetting likely would have thrown up a red flag.
Incompetence
Customer ordered 5ton of mixed PU weight plates. When plates arrived, the numbers were falling off. This was through us, a very early hard learned lesson. Cost us money to compensate the customer and cost us the customer. If we did not mess that up years ago, they would still be a customer today. Could have been avoided with inspection.
Miscommunication
An order of 250,000 spray triggers were ordered, however, mid-way through talks the dip tube (tube length) was changed.
The factory made the before discussed dip tube length.
The dip tube length was stated in the manufacturing agreement which was signed by the manufacturer.
As a result, hey changed all 250,000 thanks to a thorough manufacturing agreement and an inspection.
Remember the AMVI system
A – Alibaba
M – Manufacturing agreement
V – Vet manufacturers
I – Inspect products
Protect your money and your lead time.
Please ask any questions using the comments section or through the contact form below.
Don’t forget to download your FREE 25 page manufacturing agreement written in both English and Chinese.
Click to download
FREE manufacturing agreement.docx
