09 Dec Don’t be a Victim of Factory Scams!
As a Sourcing specialist, I make it my business to find the diamonds in the rough- the cream of the crop- when it comes to selecting factories to offer my clients.
It pains me personally, as a former buyer, to hear when others around the world are tricked by Suppliers because the threat is very real for buyers to be duped by unscrupulous individuals.
Websites such as Alibaba are fantastic resources for finding factories. The Internet now brings a more connected world than ever!
However, this sword cuts both ways.
It seems we are able to find factories and see photos of them from the comfort of our homes/ office. Brilliant! However, it is also almost just as easy for individuals to upload information and photos about a factory claimed to be theirs. Not so brilliant!
One of the fundamental problems that faces most buyers, especially small-medium sized businesses is that a trip to China to search and verify factories is simply too time consuming and costly to ones purse strings.
One simple example of this problem comes from a client. His name is Adam. He is a small business owner in the UK selling Surfboards and SUPs.
As existing importers already know, the time from placing the order to receiving it is a matter of months, typically 3. (See here for more details)
To supplement the shipment, he ordered 12 more boards (from an Alibaba supplier) to be sent airfreight to reach the UK before Christmas. All was well and good… until the delivery date came and the Supplier demanded more money for ‘unexpected costs.’
The Supplier gave Adam 2 options. 1. Bite the bullet, lose his profit and pay the extra money or 2. Lose his deposit entirely. Thankfully we were able to negotiate a 3rd alternative, which was a compromise and benefited our client.
However, this attitude of changing the rules half way through is not how we play! We hear stories all too often about how people’s dreams are crushed through a harsh awakening that not everyone is as honest as we want to believe. Websites such as www.supplierblacklist.com make it their business to name and shame untrustworthy suppliers. This seems like one way to ‘out’ these crooks, but it comes at the heavy price to that one sacrificial lamb that had to lose it all in order to help the greater good.
In my previous article, I stated why now is a good time to buy from China and that is based on the weaker exchange rate than 6 months ago. Even though the Chinese currency has weakened, which is good for buyers, another issue has arised. The manufacturing sector has been shrinking for 4 months consecutively and according to the Telegraph, ‘Chinese manufacturing hits three-year low’. This has led to a number of factories closing down. So, the ones left open are competing for each order leading to further competition in these uncertain times.
In conclusion, now is a good time to buy from China due to the weakened Chinese Yuan and further competition among factories. However, you MUST be diligent and alert when selecting your supplier-to-be. Go the extra steps and ‘Don’t be a Victim of Factory Scams!’
Here are some precautionary measures to help protect yourself in order of cost:
HIGH COST- Come to China (if you can). See with your own eyes. N.B. If you don’t speak Chinese, make sure to hire a Chinese speaker that will be able to guide you and verify the documents that you are being shown.
LOW COST- Hire an Independent 3rd party to verify factories sites, paperwork and give a photographic account of the supplier. This helps assess whether their claims are supported and are legitimate.
FREE- At the very least, check their background. If they have any reputable clients or have successfully managed big orders, this is a positive sign.
China-Connexions TOP TIP- Type into Google “Name of Factory + ‘scam’ ” and see if anything negative comes up. It won’t have all the answers and can not safeguard you 100% but it will save you a headache if the too-good-to-be-true offer is actually an enemy in disguise.
My name is Michael Gale, Sourcing Specialist at http://www.China-Connexions.com. We help connect quality buyers with verified suppliers. We filter through a wide range of suppliers so that we are only left with a professional network with proven track records. We find the right factory for you, conduct Quality inspections, provide translators and help you through the purchasing process in China.
If you, or someone you know has been tricked or had the terms changed after paying, please leave a comment, share your story and help prevent this happening to others.
If you have any questions or queries, please get in touch at firstname.lastname@example.org.