Manufacturing or choosing to have services done overseas has its risks and benefits. The wise decision would be to hire a third-party sourcing company in China that will act as the middleman between you and the Chinese factory or Chinese suppliers. China sourcing companies can even help you source out raw materials and perform other services for your company, including quality control. Hiring these companies also have their risk, but with the right choice, the benefits are endless and mutual. Even though outsourcing to China has become more commonplace, many entrepreneurs still make mistakes that cost them thousands if not millions of dollars. Here are three mistakes that you should avoid when choosing China sourcing companies:
- Miscommunication
From quotations to contracts, many things can get lost in translation especially because of the language barrier. The best thing to do would be to hire a Mandarin speaker that can act as a translator during meetings. This would ensure that what both parties wish to express come across accurately and no important details are left behind.Contracts are especially important and you would be surprised at how they are often overlooked. Written agreements always trump oral contracts and verbal quotations do not hold much water in court. Write up a contract and make sure to get professional legal assistance (don’t just download a pre-written format online). - Failure to Do Due Diligence Research on the background of the China sourcing company you want to work with. Look at their website, social media (Facebook, Twitter, LinkedIn) and verify their registration and certification. Do they have a local business license? Businesses in China should be registered with China’s AIC or Administration for Industry and Commerce and their records can easily be accessed online for verification purposes. Also, are they certified members of international business institutes such as the European Chamber of Commerce in China, among others?
- Failure to Clarify Limits and Capabilities Here’s a fact: Some suppliers have a habit of overpromising but underdelivering. Make sure to clarify their limits when it comes to production and their quality standards, equipment, and expertise. Can they manufacture your product? How much can they produce in the time frame you request? If they cannot handle your orders or products cannot delivered in time, move on and look for another company that can.