Tips to Distinguish Qualified Chinese Manufacturers
This is a guide for any person or company in terms of finding a trustworthy, reliable, and qualified Chinese manufacturer for their procurement and purchase plan.
Generally, and too often, SMEs turn to select their provider based principally on the appearance of the manufacturer’s website, vague promises shown on that, or unverified comments made by a sales agent. In this article, we are going to shed a light on how to select your qualified Chinese partner.
In many cases, small businesses make a selection of a factory based entirely on irrelevant factors, such as the way their website looks, or vague (and unverified) promises made by a sales agent. In this article, we explain what makes a reliable and qualified manufacturer in China.
Factors and Tips that Must be Taken into Consideration
I. Main Product
What matters most when choosing a Chinese manufacturer is their capability, skills and experience in making the very product you intend to buy – and that should not be taken for granted. Sometimes buyers tend to browse Alibaba to find registered vendors. In a few minutes of browsing, you may find many suppliers are often registered as manufacturers, yet a majority of them are very different in nature. Approximately 50% percent of the suppliers fall into this category.
There are some disorganized suppliers that sell whatever product they can get Such vendors tend to be very small trading companies, lacking in both product knowledge and long-term planning. Those are the vendors you will often find in “small volume batches”, selling anything from cell phone chargers to makeup brushes, for example. To distinguish a real manufacturer, it is important to figure that there is a principle product listed.
II. Main export markets
A reliable Chinese manufacturer is not necessarily a manufacturer that exports products to the United States, Europe, Japan, and Australia. There are many manufacturers who are really good at what they do, but they focus on the Asian, African and South American markets – or the local Chinese market. In other words, the export rate for developed markets is more of a benchmark, even for buyers located in developing markets like Nigeria or India. Manufacturers that focus primarily on developed markets tend to maintain a higher quality standard, keep defect rates low, and offer compliance with foreign product safety standards.
III. Product Safety and Regulation Compliance
Buyers located in the United States, Europe, Japan and Australia need to ensure that imported items meet one or more product standards (eg CE, FDA, CPSIA).
Confirming which standards and regulations are applicable to your product is a bigger challenge. What really doesn’t make things easy is the fact that less than 5% of manufacturers in China are able to demonstrate compliance with foreign product safety standards. That is why prior compliance is a critical factor when making vendor selection. Now, a non-compliant supplier may still be able to make compliant items – but the risk is higher.
Compliance is critical when importing from China. Importing non-compliant items could result in a forced recall, or your cargo being seized by customs authorities. You could also be forced to pay millions of dollars (or euros) in damages, should your product cause personal injury. However, while compliance does not give you legal immunity in the event someone is harmed, there is a reason why product safety regulations (and serious penalties for non-compliance) exist.
IV. Quality standards
Many might assume that the definition of a “good manufacturer” is one that produces high-quality items. That is not always the case.
For example, suppose Brand A cannot compete with Brand B in terms of quality and design, but based on the boom of the past market share Brand A is not necessarily considered as a “Bad Company”
This also applies in the world of Chinese manufacturers. There are manufacturers that are reliable and highly sophisticated specialized in small market segments. There is nothing wrong with them, but make sure the supplier is capable and willing to manufacture products that meet your Quality Requirements before putting the money on the table.
V: Registered capital – The Least Important Factor
The registered capital of a Chinese company seems to be an indicator that must be taken into consideration when evaluating a supplier, however, that fact is that when a company is registered the founder can name a specific capital and is not obligated to create a real inflow of such amount of capital. Yet, the Chinese government only requires that the company should accumulate the declared capital with a certain period, normally 50 years.
For instance, a SME can register a capital of 2.000.000,00 CNY while the company only consists of the founder and his laptop. A buy shall not get deceived by any supplier that boasts of its capital. Yet large size companies or ground companies for sure really possess a large capital but it is not of use for them to boast.
Are you surprised that you haven’t placed it as the top priority? Let me explain. Price is important, but only when paired with a product that meets the product safety standards in your country. For this reason, it is a complete waste of time to negotiate prices with a manufacturer that is not able, or is not willing, to comply with the product safety regulations in their country.
A low price is not always what it seems. Many suppliers deliberately quote low prices in order to get the buyer’s attention, with the intention of increasing prices before ordering (at this point it is too late for many importers to step back and find a new supplier) or to use cheap materials. and low quality.
Manufacturers that don’t allow a quality inspection or factory audit always have something to hide. In order to weed out unreliable manufacturers quickly in the process, I suggest that you let them know about future quality inspections and sample testing as soon as possible. This tactic tends to scare off fraudsters and low-level factories while saving a ton of time and money!
Announcing that you will not transfer money before a sales agreement is signed and sealed is also important. Chinese manufacturers that refuse to sign sales agreements generally have a reason for doing so.
A serious manufacturer should also be hesitant to offer us access to their documentation, including their business license, QMS certification, product certifications, and lab test reports. Manufacturers that refuse to give access to the aforementioned documents either don’t want you to see them, or they just don’t have them! No matter what the reason is, always stay away from those providers.
You do not need to wait two weeks for a response to your emails. Manufacturers who lack interest in your order are not worth it. Some Chinese providers also tend to avoid answering certain questions. If they deliberately avoid answering critical questions related to compliance, manufacturability, and quality – forget them and move on to the next supplier.
That being said, don’t overestimate your ability with English, and that communication between different time zones can slow things down for obvious reasons. Also, communication is two-way. It is critical that you give the manufacturer clear and consistent specifications on the product and quality requirements. Never assume that the manufacturer “must know” everything.
China is a great country, but many industries are highly concentrated in certain cities or provinces. Here is an example:
- Shenzhen: Electronics
- Xuzhou: Glassware
- Xiamen: Textiles
- Yongkang: Auto Parts
- Shantou: Toys
- Dongguan: Plastic Products
- Wenzhou: Machinery
- Suzhou: Wedding Dresses
Manufacturers located in these industrial zones have better access to components, logistics services, and skilled workers.
X. Design service
Product design must always be adjusted to the manufacturer’s production capacity, in terms of dimensions, materials, components and tolerances. Disorganized manufacturers tend to lack such insight, and are unable to provide you with information on certain technical constraints to which their product design has to conform.
It’s critical that a manufacturer can tell you what they can and can’t do before putting the money on the table. However, some vendors may go the extra mile and offer personal design assistance to their clients.
XI. Trade shows
Attending trade shows, especially in Europe and the United States, shows that the factory manager has more ambition than the average, short-sighted factory manager.
XII. Logistics options
Chinese manufacturers don’t tend to differ much, in terms of costs and shipping options they can offer. Reliable manufacturers already have established logistics companies taking over the export and shipping process. So you decide whether you want to take care of the shipment through your own agent or let your manufacturer take care of it for you.