Basic Due Deligence steps for Sourcing Products from Abroad !

tantk · 14-07-2006, 01:37 PM

Basic Due Deligence Steps for Sourcing Products from Abroad!

Below are some procurement recommendations :

1. Verify the name and address of the company, the manufacturing address, phone number and fax number. Cross-reference this information and the company name against other trade sites to ensure that the information is the same including contact names. Conduct a Google search on the company and their address to figure out if you could find additional information or additional suppliers that supposedly operate under the same contact information.

2. Refuse to deal with generic e-mail addresses like hotmail or yahoo. Only deal with specific company addresses. If the e-mail address is similar to sales01 or sales02 etc. I would assume that they are a reseller and not a manufacturer. Resellers tend to have offices of people surfing Alibaba etc. all day long trying to contact people. Conduct a whois search on the supplier’s web-address. Verify the information.

3. Call the supplier at the provided phone number several times and inquire about the company and the person. Ask who is in charge and ask to speak with him. Ask your contact to send along information on the company including maps to their manufacturing site.

4. Ask for references in the USA or another developed country. Require them to provide a contact name, company name, title, address and phone number. Follow-up with the references in person--not via e-mail. Ensure that they are valid references.

5. Inform the supplier that you will be visiting their location for a factory tour. Evaluate their response. It is best to hire someone to actually visit the company to verify the company's validity and business operations even if it costs you some money because it is better to minimize risk during the sourcing process. There are a few reputable companies out there that can conduct a background check for you. Contact these companies and buy the reports. It is well worth the money.

6. When procuring items for new suppliers request payment via L/C instead of T/T. Very few international manufacturers actually accept Paypal or Escrow. If you have placing a very, very large order then you might be able to get them to agree. Never pay the full balance up front.

7. Pre-shipment inspections are a must for new suppliers. You want to ensure that the goods are of adequate quality before accepting the order. Conducting a statistical sampling of goods is highly recommended. Also, if you are able to coordinate a pre-shipment inspection then you could arrange for payment of the balance upon successful completion of the inspection.

Notes:

1. If you are dealing with suppliers that pay brand name goods like Apple iPods, Nokia phones, please don’t expect that these are manufacturers of these products. Brand name goods companies have tight controls over the manufacturing process. If the company is a manufacturer then these are most likely fake or imitation goods. If the company says they are authentic then they are either they are a reseller or possibly fraudulent.

Christina · 31-07-2007, 11:16 AM

Thank you for the suggestion, I think it's very useful for me!

Luka.Liao · 21-08-2007, 07:17 AM

2. Refuse to deal with generic e-mail addresses like hotmail or yahoo. Only deal with specific company addresses. If the e-mail address is similar to sales01 or sales02 etc. I would assume that they are a reseller and not a manufacturer. Resellers tend to have offices of people surfing Alibaba etc. all day long trying to contact people. Conduct a whois search on the supplier’s web-address. Verify the information.

Please don't overanalyze something that was meant to be hypothetical.We are a big supplier in China,but as a salesman,we can use our privates email to contact customers.Your others points I agree except the 2nd point.

abctradind · 21-08-2007, 04:18 PM

also you can use a third party to verify the suppliers .

wholesale_gifts · 21-08-2007, 04:55 PM

Quote:

Originally Posted by Luka.Liao

2. Refuse to deal with generic e-mail addresses like hotmail or yahoo. Only deal with specific company addresses. If the e-mail address is similar to sales01 or sales02 etc. I would assume that they are a reseller and not a manufacturer. Resellers tend to have offices of people surfing Alibaba etc. all day long trying to contact people. Conduct a whois search on the supplier’s web-address. Verify the information.

Please don't overanalyze something that was meant to be hypothetical.We are a big supplier in China,but as a salesman,we can use our privates email to contact customers.Your others points I agree except the 2nd point.

I would like to reiterate the origional point. Never, EVER, deal with a large manufacturing company that uses "free" email accounts like hotmail, msn, gmail, etc as a primary point of contact. The chances are they arent who they say they are.

D M · 21-08-2007, 05:06 PM

Lot's of chinese companies use hotmail addresses and lots of them are perfectly legit.

wholesale_gifts · 21-08-2007, 05:13 PM

Quote:

Originally Posted by D M

Lot's of chinese companies use hotmail addresses and lots of them are perfectly legit.

Then I suggest these legit chinese companies who use hotmail accounts spend £4 to register a domain name and have proper email addresses. There are several sites I have seen who have a website (ie they also have web hosting) and are using hotmail addresses - thats just stupid!

One of the first steps I taken when vetting a company is to check that the whois info for the domain matches the contact info displayed on the website.

Otherwise....I wouldnt touch them with a barge pole.

**BillyA** · 21-08-2007, 05:23 PM

Quote:

Originally Posted by wholesale_gifts

Then I suggest these legit chinese companies who use hotmail accounts spend £4 to register a domain name and have proper email addresses. There are several sites I have seen who have a website (ie they also have web hosting) and are using hotmail addresses - thats just stupid!

One of the first steps I taken when vetting a company is to check that the whois info for the domain matches the contact info displayed on the website.

Otherwise....I wouldnt touch them with a barge pole.

Spot on.

D M · 21-08-2007, 05:27 PM

I disagree. Most people can see past the free email address.

munidragon · 27-09-2007, 06:19 PM

I agree totally with the whole free e-mail address point and tend to stay away from those suppliers when I can. But I stupidly enough got caught by a big company who did have legit addresses through a major hosting company that I won't name. They were so good that they even had genuine registration papers etc. Just goes to show that you never can be too careful and the best option is to have a third party check them out.