due diligence
Due Diligence and QC are important. Contracts are Essential.
Executive Summary: Initial productions runs in China are particularly challenging as there are so many unknowns. Distance and language complicate transparency. This is the story of a US buyer who did everything right in terms of due diligence and quality control. But for reasons beyond his control, the entire order was defective. They had the…
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Can my Chinese supplier deliver to my potential customer in China?
Let’s say you have developed a great supplier in China that ships affordable products, on time at the agreed quality level. You are aware that the Chinese domestic market is full of potential customers. If you want to explore the opportunity to leverage your Chinese supply chain to capture China-based customers, then this…
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NDA vs NNN
NDA vs NNN. What’s the difference? Which is better when buying from China? Short Answer: NNN stands for “Non-disclosure, Non-compete, Non-circumvention” and is a more robust version of the traditional NDA (Non-Disclosure Agreement)”. Simply put, the NDA is a promise that “they won’t tell anybody outside their organization about the idea”. The NNN adds more layers of…
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Setting the Right Tone for Cooperation with China Suppliers
Many foreign buyers have struggled with their cooperation with the China supplier. If you are among them, you’ve probably looking for a guide or tips to improve your cooperation with the China Supplier. For today’s blog post, I thought I would share four advanced, yet simple, tactics that I have used to ensure there…
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Quality Control: Factory Audits & Product Inspections
Audits and Inspections Overview In this post, you will find the standard factory audits and product inspections as an essential part of the quality control when sourcing products from China regardless of the order volume. Only a naïve, new-to-China buyers would ever make final payment without inspecting the order before it leaves China. Some…
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A Simple Way to Negotiate Price
If you are looking for advice or guide on negotiating price in China, in this blog post, I will share with you a simple way to negotiate price with the Chinese suppliers. Different industries have different margins, and even within the same industry, some suppliers quote high, some quote low. So, I am sorry to…
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China Project Management Template: Who, What, When, & Why?
Even the most professional of project managers paired with intensive quality control will not be able to make a bad supplier great. So, if you find the right supplier early on, you have put yourself on the right path and both project management and QC will be much easier. Related Content: Supplier Selection &…
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Supplier Selection & Verification
Thanks to online directories like Alibaba and Global Sources, it is pretty easy to come up with a long list of potential suppliers. But it is not so easy to take this long list and narrow it down to the best one single supplier in all of China for your particular needs. Also, keep in…
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Realistic clauses help you to get support from Chinese courts
Learn how realistic clauses helps you to get support from the Chinese court. When your Chinese attorney drafts a bilingual contract for sourcing products in China, it is important to include how to address the imperative terms in the agreement when there’s a breach of contract happening. Here’s an example situation of how the…
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Hallmarks to Secure a Good Bilingual Contract in China
There’s really no excuse for not having a bilingual contract in China and these are the hallmarks of a good contract. Preparing a quality bilingual contract is likely to increase confidence in the process as you are protecting your rights and needs. It is most certainly a way of ensuring both parties understand and agree…
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Would your sourcing project get past Mark Cuban’s feasibility audit?
How do you know if your sourcing project is a good fit for China? Last month, I posted an article “Starting a Business in China: How and Where to Start” and in that article it gives information on how you familiarized the business law in China and the relevant operating requirements when starting a business…
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What is a bait and switch strategy in the China Sourcing context?
The bait and switch strategy does happen, whether you’re dealing with the trading company or sometimes even with the manufacturer themselves. You need to be explicit “We visit this factory; I want the production take place here at the location we visit.” When we post about contracts as a next blog series soon, I’ll…
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Red Flag Alert: A Product Portfolio that makes Jeff Bezos jealous!
Look at the product portfolio on the supplier’s website landing page. They’ve got a snowmobile, Segway, jet skis, bicycles, motorcycles, and even more variety when you look deeper. Come on! Not even Mitsubishi, Sony, General Electric, Philips, and Ericson combined have this type of product portfolio. So something is very fishy here. Most likely, it’s…
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Be explicit that there eventually may be a production location audit
When speaking about a production location audit, it is assumed that the building and facilities, management staff, factory workers, production, warehouse and storage, quality, and product development are all covered on gathering good information. In China, factory audits are not a legal requirement but is required if you really want to manage the risks. Why…
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Why do the scam artists target small scale foreign buyers?
Let’s talk about why the scam artists target the small scale foreign buyers. It’s pretty simple. They’re easy to find. There’re so many buyers online: eBay power sellers, people that have a small eBay store, or some online store back home and they buy ten units of this, 20 units of that. There’re so many…
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Factory ownership papers reduce the middlemen risk and fear!
Red Flag Assessment Don’t be afraid to ask for ownership papers for the factory. If the factory has some excuse about why they can’t share with you who owns the factory or a business license, that’s a big red flag. They’re obviously trying to hide something. Example (ownership papers): It may be awkward to go…
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Truth about sourcing famous brands in China, not all Apples are equal
The truth about famous international brands. If it’s fashion or electronics, please realize two things. Various major brands including apple manufacture their goods in China as it is cheaper there. This may lead the buyer to think that one can get products at a cheaper rate from China but it is not true. China suppliers that…
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Straight to the Source! Are you talking with the factory owner?
How can you tell if you are talking with the factory owner? You want to go straight to the source to find out about the production of your products. You might ask him … “How many of your employees are from Hunan province? How many from Sichuan? How many from Guangdong?” The trading companies that…
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Small buyer, high risk & E-buyer beware! Don’t fall into a scam trap!
When is it likely that you will fall into a scam trap? You’re highly likely to fall into a scam trap if you meet the criteria as a small buyer or an e-buyer. So if this describes you, be very careful. Two types of common buyers that fall into a scam trap: You’re a small…
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Focus on those factories that can clearly show production experience
How do you know if a supplier has production experience? Focus on those factories that can clearly show production experience with your particular product or the production method. When you ask “Show me some samples”, and it takes that factory weeks or months to get you some samples, it probably means that they don’t…
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Be wary of these two types of scams when sourcing in China
I’d like to share the various types of scams that you might possibly encounter if you are not vigilant. Even in this pandemic, other people might take advantage of the situation. This new series of blog articles will help you be aware and how to avoid these types of scams in China. Actually, China offers…
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China Supplier Contracts & Negotiations: PO vs Contract vs NDA – Part 1
Are you researching how to set up a China Supplier Contracts? Looking for strategies for the negotiations? In this article, I’d like to share some of the best practices and common pitfalls I have learned while spending 20 years living in Asia around dealing with China supplier contracts. You probably are clear on the concept…
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PPE Part 1: The dangers of buying PPE from “your guy’s” “China guy”
Insider’s Guide: How to buy PPE from China during Covid-19 pandemic. A growing number of people are looking into buying PPE from China for supply as the world scrambles to source equipment during the Covid-19 pandemic. Introduction to our series on buying PPE from China during the Covid-19 pandemic. A growing number of buyers are…
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How to Do Due Diligence on Chinese Suppliers?
Often I’m asked about how to do due diligence on Chinese Suppliers and how to be sure it’s safe to do business in China. How do I know if it is it safe to do business with this supplier? Are there ways to tell if this seller is legit? Is it a good factory to…
Read More 4 Simple Ways to Protect yourself in the New Year
It’s a new year and new scams are on the rise. Make sure you’re prepared. An English speaking Chinese lawyer explains the best ways protect yourself in China Be sure to register your IP. China recognizes IP if it’s registered in China and not if it’s on the market or already registered in your home…
Read More Too good to be true, rings true, whether buying or selling in China
When I wrote blogs about protecting yourself while sourcing in China, I got a call from an overseas client who was trying to sell his wine to China. He told me he would fly to China to sign a contract with his buyer. The buyer approached the company selling in China and asked to…
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Buyers Beware –Double Diligence
Tip from an English Speaking Lawyer in China: Buyer Beware! Double the Due Diligence when doing business in China! Fraud is always a concern when doing international business; but only sometimes does it actually reveal itself. We say, double your diligence before you pay. A couple days ago, a buyer voiced a complaint to me.…
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How to protect your IPR while doing business in China
How can we protect our Intellectual Property Rights (IPR) effectively in China? Q&A with Sophie: An English Speaking Lawyer in China One of my clients asked me a question today that I believe is a common concern, so I thought I should blog about it. The following are are the key points from my…
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