If you’re looking for a way to lower the cost of production for your company, outsourcing to China could be the solution. Many aspects need to be considered before starting this process such as
- How do you go about finding reliable suppliers?
- What steps should you take beforehand when placing orders?
- How much will this ultimately cost?
- What should you ask for in advance so that your products turn out well and on time?
Also, it is imperative to ensure that you are working with an actual factory instead of a trading company.
Why? Because when you work directly with the actual factory:
- Your purchases are cheaper and lead time shorter – increasing your profit margin by reducing expenses.
- You can make changes to the product easier or faster – improving quality and decreasing production delays.
- Communication flows better between producer and client – lowering the risks of defects in products or supply shortages due to lack of communication.
However, finding the right supplier is no easy task when it comes to knowing if they’re really what they say they are. There are four tips you can look for to make sure of this – here’s how to do so!
1. Check The Company Certificate
First and foremost, it’s a good idea to request a copy of your manufacturer’s business license which is called “营业执照” in Chinese.
Every legitimate company in China has this certification issued by the local branch of the Administration of Industry and Commerce (AIC). This is an official document that proves that the company has been officially registered with the authorities and operates legally.
If your potential supplier doesn’t have this certification, they are not authorized to operate within the country or they are operating illegally – you should stay away from doing any business with them until they get everything sorted out on their end.
No matter what they say, don’t risk your time and money. Find another vendor who does have one!
If your supplier claims to have a business license, it’s best to request a physical copy. Such documents can be used as evidence of suppliers being authentic manufacturers rather than trading companies.
Furthermore, if there is ever any dispute with the supplier, having a physical copy of their business license on hand would assist.
Once you receive the business license from them, make sure you read through them carefully and look out for sections including phrases such as produce or manufacture which are “生产，加工，制造” in Chinese.
If you’re unfamiliar with Chinese, don’t worry!
Here is a simple way:
Use your phone to scan the papers, extract words, and copy-paste to Google Translate that can be translated at 99% accuracy! The business scope is the combination of some simple words so don’t worry about the correctness.
Verifying the business license is the first step when doing due diligence on a Chinese company. It allows you to ensure that the company is legit and not looking to take advantage of you.
2. Check the Sample Address
Many Chinese manufacturing companies are willing to send out product samples when you have a detailed plan for working with them.
You can use this method to verify if your chosen manufacturing supplier understands your requirements and quality standards.
Moreover, we advise checking the address of the sample package before disposing of it. Make sure it matches up with what is included on the business license that you requested beforehand.
If both addresses match, then this manufacturing supplier may well be an actual factory rather than just someone acting as a middleman who does not actually handle production.
However, this isn’t always reliable.
Because some companies may set up offices downtown while locating their factories outside of town due to cheaper rates for renting land.
So even if the sample address isn’t the given address on the business license at all, it still could be possible that they’re a real factory.
To do so, you’ll need to ask your supplier about getting business licenses from both the company’s headquarters and its factory when checking out which is which.
3. Check the Facility Visuals
Now, many Chinese factories have the ability and technology to introduce themselves to the world through visualization.
Take our manufacturing plant Shield Works for example, we have invested heavily to create a digital footprint such as
- Uploading our facility video online: enhance transparency across our manufacturing plant thoroughly.
- Creating a virtual facility tour on our homepage: show an immersive tour of our whole production environment at a glance.
- Posting images of the facility or factory tour on social platforms: keep our followers up-to-date about our new business and encourages them to visit us when they are ready!
The purpose of checking the facility visuals is that most foreign business owners are hesitant to do business with suppliers they’ve never met before because of the potential lack of transparency. And more importantly, overseas owners can not come to China in person now to make a physical facility tour to confirm the production environments, capabilities, and quality.
If a supplier tells you that they own a huge and well-equipped manufacturing plant, but cannot provide any evidence at all, then it might be worth staying away from them until they can back up what they say with hard proof.
By checking their facilities, you will have more confidence to build trust and reduce business risk.
4. Check The ISO Certifications
Typically, not every trading company has ISO certifications but the majority of manufacturing factories do.
This is because a factory needs some specific ISO certifications for its operations to continue without interruption.
However, using this criterion when trying to determine whether a company is an actual factory or not may be inaccurate sometimes.
The reason is that some trading companies also need ISO certifications to deal exclusively in one product category so they can maintain a strong relationship with their manufacturers.
Therefore, working with such a trading company is the same as working with a real manufacturing company with a factory when it comes to particular items or categories.
However, it’s not easy for you to work with these trading companies because they usually focus on making products for their domestic partners.
Let China 2 West Help With Your Project
When selecting a manufacturer in China, you have to be careful to do due diligence.
You don’t want to work with one without first listing out your needs and requirements because you may make a hasty decision without considering every possible factor when deciding which Chinese manufacturer would work best for you.
Working with a professional manufacturing partner in China like China 2 West will make this complicated process much easier and less risky for everyone involved.
For 17 years, China 2 West has been a major player in the field of quality sourcing and product importing. Armed with a state-of-the-art OEM manufacturing and contract assembly plant, Shield Works, we have helped many western companies increase production efficiency, reduce costs and eliminate the risks associated with manufacturing in China.
If you’re looking for an all-around manufacturing company that knows how to provide one-stop solutions, then look no further than China 2 West! With our in-depth knowledge and vast network of manufacturing suppliers, we are confident that we can find what you need quickly so that you don’t have to sacrifice too much time or money to do it by yourself. If you want to know more about our sourcing services, don’t hesitate to contact us today.
