Sourcing Packaging Machinery from China: Complete Guide and Tips
Complete Guide for Sourcing and Importing Packaging Machinery from China: Tips to Make Decisions and Avoid Risks
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If you are planning sourcing packaging machinery, whether for primary, secondary, or tertiary packaging automation, especially when it comes to making choices among bunches of offers from China, this is a blog that you can refer to help you make the right decision and your procurement a success, avoid inferior products or unethical supplier, and even to avoid deception or scam!!
General Introduction to this Blog:
- Channels by which you may source
- How and Tips to Verify Supplier’s Identity
- Pros and Cons of Different Suppliers
- Possible problems you may detect when sourcing from China that calls for special attention and alert
- Potential Risks of Sourcing from China: Avoid Bogus Company
- Channels Through Which You May Sourcing Packaging Machinery from China
- Different Kinds of Chinese Suppliers: Manufacturer or Trading Company, or Even More?
- Sourcing from a Manufacturer (Factory)
- Soucing through a Trading Company (Intermediary)
- Manufacturing & Trading Company, Paper-Tiger, Bogus Company
- 4 Cracking and Practical Tips to Spot the Identity of a Chinese Supplier
- Spot Potential Risks and Unethical Suppliers
Channels Through Which You May Sourcing Packaging Machinery from China
The first step of procurement is no doubt conducting a search to find the contact. We should put examples of what you may rely on and the basic first-step analysis of each of them.
Probably when it comes to sourcing from China the B2B Websites are the first options that may bump into your mind, no matter whether you are already familiar with those frequently heard Chinese B2B Websites or you just encounter them by conducting a search through the search engine, known the pros and cons. We take Alibaba as an example to look into the pros and cons, which are common and may also apply to other Chinese B2B websites such as Made-in-China, Global Sourcing, etc.
Advantages: Wide Range of Choice
Alibaba has been one of the most well-known B2B websites for sourcing from China. The Ali website allows you to find bunches of items and a large variety of categories that you can directly turn to and get contacts with the supplier. As the largest B2B website in China, the primary edge that Alibaba has over the other B2Bs is the wide range of options and the significant number of companies registered there.
Disadvantages: Fake Identity and Misguiding Figures
The verification system of Alibaba is supposedly reliable to verify the identity of the supplier you are contacting, however, the system is “flexible” that a one-person company or trading company can carry out the verification on the factory of another manufacturing company and thus posing a manufacturer.
Data of the verification badge seems to be reliable and what you can turn to to evaluate a supplier. The underground fact that foreigners do not know, is that these figures can be fake, and intentionally and unnaturally produced. For example, suppliers can place fake orders to get higher transaction volume so that they can appear with seemingly large business activity. This is an underground fact everyone knows in China, should you ask your Chinese supplier to confirm.
There is also a large number of companies that have just a presence on Alibaba while do not have their own official website, though this is not a definite yardstick with which to evaluate a supplier is reliable or not.
Getting in contact with suppliers in China through their Official Websites can be a complex topic to discuss. Companies with their own official websites are usually with more business acumen and awareness of brand marketing, which can be a good trait.
Nevertheless, the administrator has full control of the content on the website which can not be verified or endorsed through any 3rd party or their reference, and as a result, the content on the website can be either authentic or exaggerated and untrue.
We should cover in the following chapters tips to verify whether an official website of a Chinese supplier is trustworthy or not.
Different Kinds of Chinese Suppliers: Manufacturer or Trading Company, or Even More?
There are two basic supplier categories in China to be taken into consideration when sourcing packaging machinery from China. While the company type may not be a major factor in taking the decision on which supplier to turn to, defining and verifying the identity of your supplier can be of significant impact during your order, communication, and the total course of your procurement.
Sourcing from a Manufacturer (Factory)
Packaging machinery manufacturers usually have a limited category, though, the advantages of sourcing from a manufacturer can balance the cons. A manufacturer or factory is literally the company who actually produces the machinery on its own site. A manufacturer of packaging machinery can have a complete payroll and team of technicians and engineers, apart from salespersons. In most cases, a packaging machinery manufacturer´s category is of a limited range (global giants as exceptions).
Better Price: The advantage of sourcing from a manufacturer is that there is no intermediary intervening in the procurement. And thus the prices are lower than sourcing through a Trading Company.
Communication: Moreover, you can have more control over your products now that representatives from the manufacturer are in contact with you directly and any of your opinions and requirements can be delivered to them and supervisions of the manufacturer without any misguidance.
Expertise: Technicians and representatives from a manufacturer a usually more professional and of sound expertise in their products, rather than a representative from a trading company who should keep enacting as an airphone between the client and manufacturer.
Limited category: a factory is focused only, with expertise, on their own machinery.
Soucing through a Trading Company (Intermediary)
A trading company is actually a broker between the manufacturer and the purchaser.
Trading companies have been common during the past years in China, especially during the early 2000s and even earlier, when China took economic reform and then in the 2000s joined the WTO, giving the fact that local factories then shared little experience in dealing with exporting and shipping and the lack of professionals for international communication is also the problem.
All these factors left a niche that trading companies can step into to enact as intermediaries and earn their bread as brokers by adding gaps to the offer.
Yet during the recent years trading companies have been diminishing now that more and more manufacturers and reinforcing their international presence after having been joined by university graduates who have better language and international communication skills, and even industrial expertise.
The Advantage of Working with a Trading Company
Wide range of categories: Through their local network, a trading company can offer a large variety of products.
Facilitate Coordination (maybe): Through the network of a trading company, the buyer does not have to coordinate with various companies.
The Disadvantage of Sourcing Packaging Machinery from Trading Company
Complicate the Communication (yes): Communication through an intermediary can result in a lot of problems. Information can be misled or filtered in case the trading company is not professional enough or has no expertise in a certain area, thus quality issues and miscoordination are inevitable.
Complaints and Trade Disputes: Now that trading companies are just an intermediary coordinating between the buyer and the manufacturer. Once a dispute occurs due to quality issues or whatsoever, the trading company will convert into an obstacle to the resolving of the issue.
Scams and Fraud: Working with a trading company, if not enough discretion and importance are attached to the verification, can result in severe outcomes such as bumping into scams and fraudulence. We will cover this topic in the following chapters.
Manufacturing & Trading Company, Paper-Tiger, Bogus Company
A third category might exist which is the manufacturing & trading company.
We put it in a tone of probability for reasons that such kind of company of ambiguity can be an issue.
The company can be in fact a manufacturer that deals with export itself. In this case, and in essence, it is a manufacturer, rather than ambiguously calling it a manufacturing & trading company. A situation can also occur where a manufacturer is required by the buyer to source other machines from the local market to offer them as a package. Yet still the word, it’s a manufacturer, but engaging in sourcing.
Bogus Company (Fake Manufacturer)
However, the trading company may also pose, exaggerate and deceive the buyer that they are a manufacturer, and then outsources partial or even all of their offer from other companies. Our suggestion is that you should be cautious and careful with these ones, now that ethic and integrity is the most important factor in the business. This is for the purpose to minimize, not only the purchase cost but also avoiding quality issues and trade disputes.
We should cover in the following chapters tips to distinguish those fake manufacturers.
4 Cracking and Practical Tips to Expose a Bogus Company
With search engine results you may have found various advice about spotting a Chines company, such as checking business licenses, registered capital, copy of certification, etc… these are actually not cracking ways to figure out your supplier’s identity. For example, a trading company in essence can get registered in China as a “Machinery Company”, rather than an “Import & Export Company”, while in fact, they are in property of no site, no people, no machinery actually made by themselves.
So back to the topic… Since we have covered the two major categories of Chinese packaging machinery suppliers and discussed to a basic level the pros and cons of working with manufacturers and trading companies, and then the possible third one of paper-tiger. In this chapter, we provide some PRACTICAL TIPS for figuring out and verifying in which category the supplier in contact with you is.
Check Their Category
A manufacturer usually has a limited category, and even if their machinery covers a wide range of packaging automation, most frequently they are related to each other, for example, to form a turnkey solution. In most cases, a trading company may cover a considerable variety of machinery, covering too many sections of packaging automation. Here comes a problem, the tip to which we cover later – how to figure out manufacturers of a wide range of machinery and trading companies.
Plagiarized Machinery Image to Portray a Deceptive Well Impression
There is no reason that a manufacturer put photos taken from other places on their website for propaganda. And most usually the machinery images, in terms of styles, designs, and level of technology are in accordance with each other, which means, all detailed images appear to be unnatural. While a trading company may fill its page with images taken of machinery from different levels, different sites, and different manufacturers. This might be subtle to detect. But, deception, they don’t really have machinery that appears on their website.
They just try to portray a charming impression that they produce these well-looking machinery by plagiarizing photos and images actually of machinery by the world’s leading machinery manufacturers, however, what they really offer are shitty craps randomly sourced in the local market.
Be Careful of Fake Manufacturer, their Actors and Fake Factory Photos
A trading company posing manufacturer may place manufacturer-like photos on their websites, on which employees actually of the manufacturer are dressed in clothes with the logo of the trading company, thus disguising as a manufacturing company and concocting a deceptive company image.
As well, they tend to put a fake factory photo with their logo placed on the frontage, thus deceiving the visitor that they are a manufacturer has their or factory. However, it is easy to expose the lies by searching images on Google, soon will you find mountains of the same images but intentionally edited with different companies’ logos. Evidently, none of them are real manufacturers but only bogus companies of a few people and with their PCs only that try to deceive the visitors.
Make a Random Video Call out of Blue
Without an appointment, arranging a striking video call with the supplier during office hours in China (i.e., around 10:00 AM or 14:00 PM GMT+8) can be a crack to verifying your supplier’s identity. Ask them to pick up the device, open the camera and take a tour around their company. No excuses or hesitation allowed.
A bogus company is usually reluctant to show you the factory at immediate disposal.
Also, this is a way for “how to figure out manufacturers of a wide range of machinery and trading companies.”. Manufacturers usually have machines available at their site, while a trading company that covers a wide range of machinery can not show you all of them at once.
But still, we have to make it clear: A middleman is not necessarily a downside for your procurement.
An intermediary can sometimes bargain against the real manufacturer, whether thanks to their solid relationship, past orders, or future cooperation and offer machinery of prices even better than that if you contact directly from a manufacturer.
Spot Potential Risks and Unethical Suppliers
You can never be prudent when spotting the potential risks of dealing with your suppliers. The following tips may help you to make the decision.
Hong Kong Registered Company or Hong Kong Account for Payment
Be very cautious when you find that the supplier you are contacting has some registration info in Hong Kong, or if you are asked to settle the payment to their Hong Kong Account. This is very probably a scam. We do not cover to depth this section, now that political topics are to be involved.
A Website Full of Plagiarized Images
Check your supplier’s website, take screenshots of the images on the website and conduct an image search on Google. Unethical supplier, especially those bogus companies with few people and only computers and desks then nothing else, usually fill their websites with copyright-infringing materials plagiarized from other companies, and even sometimes from global leading companies and giants, so as to disguise a pompous figure and boast about their business.
Think about their conduct and how they’d act and what they’d offer?
It is typical that a bogus company claims that it is the leading one in almost every one of its categories, which is usually backed by no substantial references. A bogus company also exaggerates its business scope to such a level that only a sector giant can probably reach: hundreds of employees, incredible large factory sizes, boasted-off network, and service range. The truth behind these exaggerations, is usually and completely, on the contrary, a company of few people and manufactures nothing virtually.
Typical Deception by Bogus Trading Companies in China
Not all the trading companies should be defined as bogus ones now that, admittedly, some of them do have positive impacts during the process of procurement. We discuss and enumerate the typical deceptive acts by those bogus trading companies in China that mislead information, hide the truth, mispresent their identity and deceive the buyer. Some of these conducts might have been covered in the above chapters, yet to make a conclusion of them it is not necessarily verbose and redundant to mention them again.
Fake Factory Photo
They would call any of the real factories around their region, take a photo of the building, and get the original logo there on the wall removed by editing the image, and then paste their own on it, even if they tend to be extremely clumsy.
The purpose of such conduct is to deceive the buyer that they are the manufacturer. The
Show Clients Video Plagiarized Elsewhere
They would search for videos of products that are similar to what the clients require, download them and forward to their clients saying that they are videos of their past projects. This is very typical and common misbehavior committed by those bogus trading companies.
In some cases, for example, we may publish videos on local social media in China, they are then found by these bogus companies and downloaded, thereafter being uploaded by these companies to YouTube pretending that it is about there own machine, however, they are not our distributors and we don’t have any partnership with them.
The result of such an unethical act is that the clients will finally get a machine totally different from what is shown in the video and what the seller has compromised.
It is difficult to distinguish such a deception, now that not all buyers are familiar with the machines available on the market in China. The feature is that the company will assure a higher speed than what actually the machine can reach. Such misconduct is usually combined with a speeded-up video during the first stage of the communication.
Though we have been talking about the so-called tips for sourcing “packaging machinery” from China. I suppose this guide and the tips contained can be applied to occasions where you are sourcing other products as well. This is the first edition of our guide. I will keep updating this blog when new ideas bump into my mind.
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