The Asset of Integrity, Part 2: Finding a Chinese Supplier Who Won’t Rip You Off

In their February 24 issue, Businessweek reported that from 2009–2010, more than 2,300 vendors used a large, well known Chinese e-commerce website to defraud global buyers. The article described the debacle as a “systemic breakdown of integrity.”

In last month’s newsletter, we looked at how critical integrity, defined as “the adherence to moral and ethical principles; soundness of moral character; honesty,” is to the long term success of a business. We saw how the lack of integrity is not just a problem in China, but all over the world, including the U.S.

The focus of this month’s newsletter is how to find a company in China that you can trust.

As those who have been scammed have learned, firing off an email to an unknown person (for whom English is a second language) who is thousands of miles away in a country where the business culture looks nothing like ours can get you burned. The party on the other side could be one man, armed with distorted motives and a computer, or a newly formed trading company with a name that sounds like it’s a factory, or, it could be a manufacturer.

Then, if the company is legit, what do they have to offer? If it’s a factory, do they have the equipment, personnel, and experience necessary to make a quality product on time?   Are they truly interested in your business, or are they just being polite per the cultural norm?

On your side, do you know the right questions to ask to assess a Chinese supplier, and what to do if they start getting a little sideways? Can you communicate the differences between the Western business culture vs. that in China, and bring them together?

Before going further, I should add that there are legitimate companies on Chinese e-commerce websites. The question is, are you willing to put your hard earned money on the line, roll the dice, and hope you find a good supplier?

To know with certainty whether you have a good supplier in China, there’s only one way to do it: you need someone on the ground in China who understands the business culture, speaks fluent Chinese, can ask potential factories the right questions, and knows how to get problems resolved should they arise.

One alternative is to spend thousands of dollars making many week–long trips to China to build relationships, visit factories, inspect shipments, and learn the ropes of what at times seems to be a maddening way of doing business. I’ve done it, but that’s what my business is about. Most people don’t want to spend that much money and time making overseas purchases; they want to spend the precious asset of their time doing the things that grow their business, i.e. sales and marketing.

We work with three partner companies in Ningbo, Shenzhen and Qingdao who source product for us; they are our (and by extension—your) eyes and ears in China.

So how do you know they won’t scam you like those 2,300+ suppliers on the e–commerce site?

Biblical wisdom says we shall know “a tree by its fruits.” In other words, how a company has handled business in the past. Over the years, my partner companies have sourced product others couldn’t find, provided quotes quickly, communicated promptly, and taken care of problems when they’ve arisen. I know I can trust them to back up their words with action.  

(Want proof? Read testimonials from some of our customers.)

This is our 20th year in business; our focus has always been to build long term relationships with our customers. Trees that produce rotten fruit generally don’t last

China in the News

Inflation in China Running at 4.9%

Food Price inflation alone is at 11%; Chinese families living on the low end of the wage scale are spending 50% of their income on food.

World Trade Organization Reverses Ruling on U.S. Steel Duties

On March 14, appeals judges from the World Trade Organization agreed with China that “the U.S. acted inconsistently,” when it levied high tariffs on imports of steel tubes, tires and woven sacks from China, South Korea and Mexico.

China’s GDP Grows 10.3% in 2010

Expansion of 9.8% in the 4th quarter fuels growth.

Their Next Holiday

Chinese companies will be closed for the first week of May for their “Labor Day” holiday.

Please keep this in mind when planning your orders.

The Exchange Rate

Yuan to the dollar, as of today: 6.56 to 1

Rate when the Yuan was depegged from the dollar on June 19, 2010:  6.82 to 1

Change: .26 (3.8%)

About Us

Since 1991, Global Trade Specialists, Inc. has helped companies of all sizes get their products made in China from manufacturers of quality products. We are an American company who works with three trading groups in China with immediate access to thousands of manufacturing companies. We source most products made from metal, plastic, wood, stone, glass or textiles; from prototype to production. Many of our customers are first time importers; we walk you through the entire process.

More on what we do.
Products we source.

Read testimonials from some of our customers.

Email us for a free quote.