Home' Trinidad and Tobago Guardian : August 17th 2017 Contents BG12 | COMMENTARY
BUSINESS GUARDIAN guardian.co.tt AUGUST 17 • 2017
Finding the right supplier in China
Whether you're afirst-
time importer or
finding the right
supplier in China
to produce your
product can be a daunting task.
Although companies and entrepreneurs
have been sourcing products and raw ma-
terials successfully from China for many
years, there are just as many that have had
bad experiences when dealing with Chinese
suppliers or manufacturers.This is true for
several companies in T&T and the Carib-
Before you begin the process of securing
the right supplier for your product, there
are numerous considerations to take into
account. For instance, location of the fac-
tory, whether they are legitimate, reliable
andengagein foreign trade are critical suc-
cess factors. Furthermore, not every man-
ufacturer in China has a license to export.
Conducting research on the supplier is a
prerequisite before placing your first pur-
chase order. There are many stories of im-
porters wanting to buy goods, paying onthe
purchase order, and then the supplier disap-
pears, taking the buyer's payment and never
shipping the goods or the product quality is
inferior and therefore cannot be sold. This scenario
is more common than you might realise.
In spite of the negative behaviours of some un-
scrupulous suppliers, China provides several benefits
including increased profitability when doing busi-
ness with factories that are legitimate and have the
production capacity, technology, and the ability to
export your products or raw materials.
Dealing directly with a factory benefits the buyer
in a number of ways including lower prices, higher
quality products manufactured and customised based
on buyer specifications, the opportunity to get quality
raw materials coupled with the low cost of labour,
which results in an affordable product.
Despite many great advantages, there are several
risks in sourcing quality goods and raw materials. To
receive what you ordered and to mitigate risks re-
quires experience in doing business in the Chinese
market, knowledge of the culture and language, and
use of your network. Buyers may need a professional
sourcing firm to partner with them to source goods
successfully from China. This idea should not be dis-
counted especially for firms that have never done
business in Asia.
The right supplier
The buyer or importer must undertake supplier
identification research ensuring that they have dis-
tinctive attributes for defining and measuring their
Defining the right supplier is specific to each buyer,
as the relative weight placed on the price, quality and
lead time (if the product is manufactured) and other
attributes differ from project to project.
Normally supplier identification research can take
four to six weeks. This process generates an initial list
of potential suppliers using web directories such as
globalsources.com and trade show directories.
If the buyer chooses to manufacture goods in China
instead of purchasing from wholesalers, it is advisable
that focus is placed on factories that clearly demon-
strate production experience with their product and/
or production method.
Information on the size of the supplier's operation,
equipment, staffing and international compliance
certifications are necessary. The potential suppliers'
brochures and websites should be reviewed against
the established attributes for the buyer's ideal sup-
plier resulting in the narrowing of the list to a smaller
number of potentials.
With this new short list of potential suppliers, the
next step is to make contact via email requesting prod-
uct specific information ie samples, minimum order
quantities, and production lead time.
Additionally, information on the actual production
location and a request for factory ownership docu-
mentation should be made. The supplier should be
told that the factory location may be audited and this
location cannot be changed without the approval of
At this juncture, the research should narrow the
field down to possibly three to five qualified suppli-
ers. Buyers should verify if the supplier has a quality
control system in place to make the desired product.
If this is not to the satisfaction of the buyer, a third
party quality auditor should be engaged to conduct
a quality assessment of the factory. Due diligence
should be carried out to ascertain whether the sup-
plier has a good reputation, no legal problems and is
Based on the results of the factory visits, the next
stage is sampling, trial order or even purchase order
placement with the top vendor or two.
The value of the process far outweighs theincon-
venience. It is clear that undertaking a thorough due
diligence investigation on suppliers prior to engaging
in a trade transaction can minimise risk and avoid
problems when sourcing in China.
Submitted by Michelle Low Chew Tung, managing
director, INVENI Business & Technology Ltd.
www.invenitt.com or email@example.com.
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