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Seminar recordings and other resources from the Spring 2017 China Sourcing Summit

Global Sources hosts a China Sourcing Conference twice a year at their China Sourcing Fairs in April and October.  I have the honor of speaking at their events.  In case you didn’t have a chance to attend, in this blog post, I’ll share the seminar recordings and related resources.

Where to find the conference notes & video recordings?

Event Topic Recording/ Related Videos
Global Sourcing Trade Show (HK) China Sourcing 2017: Best practices & common mistakes https://www.youtube.com/watch?v=ppFv9SjzrAg

If you liked the seminar, you may also enjoy the following:

  • China Sourcing Academy A great resource for professional training.  I am honored to be one of the online instructors at the academy.
  • The Essential Reference Guide to China Sourcing (available on Amazon) or learn more about my book here.

 

FAQ: How to ensure the seller is not a scam?

Search SupplierBlacklist.com

A Corporate Assessment (CA) report can provide viability into the stability, assets & reputation of a target company.

Red Flag Assessment (RFA): Risk, Scams & Fraud exposure on a given transaction/deal when buying from a Chinese company.

 

FAQ: How to find a reputable sourcing agency?

Option A: If your project is ongoing and you could benefit from having a team working full-time on your behalf in China, then check out PassageMaker as they set up and manage virtual sourcing teams and production lines.

Option B: If your project is one-off or you don’t need full time support, please check out my list of endorsed service providers for QC, Logistics, Sourcing Agents, Engineering, Consulting and much more at www.SourcingServiceCenter.com .

 

FAQ: Where to find an English speaking lawyer in China?

www.AsiaBridgeLaw.com  Affordable, Professional, English-speaking legal & business advisory services. I am on their board of advisors and recommend them with confidence for:

  • IP Registration

  • Bilingual Contracts

  • Dispute Resolution (including Loss Recovery)

  • Business Advisory Services

  • General Legal Counsel

 

If you have additional questions about China sourcing, feel free to contact me at your convenience and I will do my best to assist you.   Looking forward to being of service and wish you successful China Sourcing.

Best Regards,

Mike

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PassageMaker’s Founder Interviewed by the Financial Times

PassageMaker’s founder (Mike Bellamy) was interviewed by the Financial Times about his professional and personal life in a special segment on how East intersects with West.

Visit www.FT.com for the full article entitled “A foot in both cultures”. Below are some highlights.

 

Blackbox assembly in China explained using Mike’s desk as a case study.

Multicultural Business and Family

The American founder of PassageMaker, a sourcing company that acts as a go-between for midsized western companies that supply retailers from factories in China, laughs when he describes how his teenage daughter symbolises this cultural ambidexterity. She picks “the eyeball out of a fish-head with chopsticks with one hand while helping herself to mashed potatoes” with the other.

Blackbox Assembly Explained

…while everyone wants the China price – ie the low costs associated with sourcing from the country’s factories – clients are just as concerned about being copied by suppliers who quickly become competitors. “We are a buyer-appointed firewall. Buyers don’t want the sub-suppliers to see too far up the supply chain,” he says.

The process used to manufacture his exercise bike-enabled desk is a case in point. Its steel legs are made by one manufacturer, the plastic table-top at another. The unit is then assembled at a factory owned by PassageMaker and shipped directly to Amazon – without even the middleman client in the US seeing the finished product.

The manufacturer of the steel legs could have been used to make the whole product but breaking up the process allows the company to protect its intellectual property. The company’s shift a few years ago from a sole focus on sourcing to protecting IP – what Mr Bellamy dubs a “black box” approach to manufacturing “to give clients a physical infrastructure to protect their IP when the IP laws don’t”

Small town USA to Shenzhen China: Learning the language

He first moved to Asia in 1993 and has been a resident of Shenzhen, southern China since 1999. Mr Bellamy jokes that more people live in his apartment building in Shenzhen than in the small Upstate NY town where he grew up. Studying Chinese was not easy. Back in the 90’s, his roommate, a Chinese engineering student, returned to their hostel with a second-hand television. “He said, ‘This is how you turn it on’,” Mr Bellamy says. “I thought, I have to learn this language otherwise people will think I am stupid.” Mr Bellamy now reads, writes and speaks Chinese.

Mike Bellamy received his double degrees in diplomacy and economics at the American University in Washington DC and later received an MBA from the University of South Carolina.  As part of his program, he took a year of graduate level courses at the Harbin Institute of Technology in north-east China and at the University of International Business and Economics in Beijing.

 

Starting PassageMaker: Honest business in a corrupt system

In 2002, he founded PassageMaker with two employees; the company would later grow to over 200 employees.

Mr Bellamy jokes that he has sourced everything from church pews and sex toys to iPod accessories. Today, the company sources $200m worth of products for clients in the US, Europe and Australia.

Unlike many large supply-chain companies in Asia, PassageMaker does not ask for a commission from the factory supplying the product as well as from the buyers. “Our compensation is 100 per cent from the clients. As soon as you take a percentage from the supplier, there’s a conflict of interest,” he says.

If this sounds like the business equivalent of being a Boy Scout in China, it is probably because Mr Bellamy’s mission for his company is based on the Rotary Club’s guiding principles. On the walls of his company’s Shenzhen offices are questions employees are supposed to ask themselves as they do business, taken from Rotary’s Four-Way Test. “Is it fair to all concerned?” and “Will it build goodwill and better friendship?” are two of the maxims on its website and walls.

 

Visit www.FT.com for the full article.

An insider’s look at costs, tax benefits, transfer pricing, arm’s length pricing and off shoring when using a HK company to buy from China.

The following is the exclusive transcript of highlights from an interview I did on the subject of “transfer pricing/ HK offshoring” with the “global from Asia” podcast.

An insiders look at costs tax benefits transfer pricing arms length pricing and off shoring when using an HK company to buy from China.

Visit https://www.globalfromasia.com/transfer-pricing/ for the full podcast.

Q: So today’s topic transfer pricing, this is something I learned about when first in China – can you explain a quick definition?

Mike Bellamy (MB): First off-  I’m not an accountant or lawyer, so today, I’m just sharing what I have learned setting up my own supply chains and managing them on behalf of our clients.  Having said that, simply put, transfer pricing works like this:

Example: you buy a widget in China at 1 USD and you sell it in your home market for 10.  Your profit was 9, you are taxed on that profit.

Let’s say you set up a HK company (or you hire one), and that HK entity buys for 1 USD and sells to your HQ back home for 9, and then HQ sells to the end user for 10.  In this case 8 bucks of markup stays with the HK entity and only 1 USD profit is on the books with the HQ.

The magic happens when you realize that if you set up a HK company or outsource it, in the right way, profits are not taxed. HK called this an “offshore transaction” and its profit is not taxed by HK if you set your HK company up right and following some simple rules set by the HK government.  Of course, when you repatriate the funds back home, you get hit with tax, but until that time…this pile of money builds up in HK and can be recycled to buy the next order “tax free” if you will.

That’s an over simplification, but you get the picture.

Q: Many business owners listening today are doing trade around the globe, buying from china, via a HK company a lot of times, selling to their company in USA – what are some normal cases for transfer pricing?

MB: While the HK tax code is very business friendly, things get complex in your home country depending on how that HK company is viewed. Now we are talking about “Arm’s length” issues.

Also, the PRC tax man is also wise to the game, especially if you own the PRC company and sell to your HK arm.  It’s a big red flag is you are selling it at a loss in China to avoid PRC profits taxes.

Q: So they should setup multiple companies? Or just buy direct from the factory from your USA company? How to value the product, at each stage in the distribution chain? There’s manufacturing, importing, wholesaling, retailing – are there standard margins people can or should use?

MB: There are actually a couple of important sub questions on there. I’m assuming you asking the question with regards to transfer pricing and keeping an arm’s length.

For example…if you own a WFOE in China, you need to be asking the question: what’s the lowest price I can sell from my WFOE to my HK company without breaking any laws in the PRC. That required some benchmarking. Kepe in mind you are going to pay taxes, I’m not suggesting breaking any laws, I am suggesting your simply optimize your global tax plan to reduce and defer taxes in full compliance with the laws in all the juristictions where you operate.

In the worst case, depending on how seriously you home country takes this “arm’s length issue”, there may be no advantage for having a HK holding company. If your government views that HK as under your “control”, then you may get taxed anyway.

Another big mistake is to count on things being “profit tax free” in HK, only to realize too late that you broke the rules about how to enjoy the  “offshore” classification. For example, if you sign deals in HK, have contracts with HK based customers, or keep a formal office with real staff based in HK…then you will need to pay HK profits tax because it’s not “off shore” business.  Granted, the tax rates are a lot better than back home in US or Europe, so paying tax in HK isn’t that bad!

Q: All governments want the max in tax income, does each country have different rules and policies?

MB: Yes, here are the questions to ask your domestic income and business tax advisor:

  1. From my government’s perspective, how do they define “control” and “arm’s length” issues regarding overseas companies that I may be associated with?
  2. If I set up a HK company, can I used it, in a fully legal way, to reduce my taxes back home?
  3. Do I even need to have a company back home? What if I moved my business to HK, how would that impact my personal income tax?

 

Q:  Mike, you are American, have a HK holding company and source from China. You talk about “doing it right”,  any tips for my listeners with regards when is the right time to setting thing up right in HK?”

MB: Don’t try to be sneaky, realize you are going to need to pay tax somewhere. So just be smart about it and find the option that is fully legal, yet reduced your global tax exposure.

If you are spending less than a few million USD in China, then setting up a HK company may be over kill. If you are spending more than a few million USD in China and you haven’t explored your options in HK, then you are doing yourself a big disservice and missing a major opportunity.

Q: What stages of a business, say an Amazon seller, should start to think about this? Is there an easy way to get started, then get more complex?

MB: At risk of sounding like a salesman, a first step can often be to work with a company, like mine (www.PSSChina.com), that has operations in China, HK and clients globally. We have a system in place already that can be leveraged for small/medium client, and when the project gets large, the client can think about setting up their own operations.

Q: Some may have their heads spinning now, what is #1 thing a listener can take away today to get started improving their business with transfer pricing/ HK off shoreing?

MB: Look at the corporate tax rate in HK vs your country. Multiply it against your annual business volume. If the difference is tens of 10…not worth the effort. If 100’s of thousands of USD, then you need to look into things a lot closer.

Related Resources:

http://www.psschina.com/passagemaker-resources

Stay out of jail by navigating product safety in China!

 

Product Safety in China: Is My Product Safe?

Physical SafetyOK

When people ask “is my product safe?” most of the time they are asking the question because they want to make sure the product won’t hurt anybody and to be sure they are not at risk of a lawsuit. We could call this “design safety”.

Meaning, for example, the product has no pinch points, sharp edges or dangerous materials. If your product is in the concept or design stages, it is very important that not only can your design engineers come up with something that appeals to the market place, but is also needs to be physically safe. Imagine spending thousands of dollars on a design only to learn that it is not fit for function or unsafe.

Regardless if you design in-house or outsource the engineering, make sure your design and engineering team are fluent in DFM and that they have a solid understanding of the regulations in your marketplace. And that brings us to regulatory compliance.

Compliance

Broken car 300x180
As mentioned above, not only should we be thinking about physical safety, but we also need to make sure that our product can be imported into our market with no complications. For example, the safety regulations for a toy, electronics, or piece of furniture can be radically different in Jordan, Jamaica and Japan. You risk wasting a lot of money if your product is not engineered from day 1 to meet those standards.

Who can you trust?

Since standards are constantly updated and vary from country to country, you are at great risk to simply take your suppliers word for it. They want your order, so of course they will say “sure it is safe.” But if the product is not safe from a physical safety or regulatory compliance point of view, and God forbid, somebody gets hurt….who are the lawyers and government officials in your marketplace going to come after? An overseas supplier in China? No way, they will come after the importer of record. And that means you.

So as buyers, it is our responsibility to confirm the product is safe. Assuming you had it engineered right, the next step is to take the prototype or sample and get it to a reputable testing lab. The big international labs stay up to date on the latest rules and regulations for all the major markets. As they have offices in China, you need not send your widget back home to be tested. Plus even the testing costs are less in China, generally speaking.

Most new importers don’t realize they can take their widget to a lab and say “I want to import this to X country, how much will you charge me to test that this product and packaging fully conforms with all standards?”. The sales guy at the lab will pull out a giant book full of protocols and prices and in a few minutes you may learn that it really doesn’t cost that much to confirm your product is safe.

Can I sleep well at night?

Well before you start patting yourself on the back for working so hard to make sure your product is safe. Don’t forget that at the lab, you simply confirmed that one unit was safe. Now you need to make sure that when full production is running, every unit that comes off the line is safe.

But it is not realistic to send 100% of production to the lab for testing, so as buyers we need to come up with a realistic factory audit, production inspection and product testing plan. The factory audit may take place once or twice a year to confirm that the shop is being managed with a Quality 1st mentality.

In other words, they are running their factory in a well-documented and “safe” manner. Production inspection should be taking place with every order before the goods ship out of China. You or an independent inspector will go to the site of production and verify what is coming off the line is safe. In this case, safe means that it matches the specs set by the master sample which was tested by the lab to be safe.

Unfortunately, you still can’t call it a day just yet. Because, unless the order is tiny, the inspection will not be 100%. It will be based on a statistically reliable sample size, using an AQL chart. While the inspector can easily check the physically properties of production pieces, it is hard for them to check the chemical properties. So some parts should be picked at random and send to the lab.

How many pieces to send to the lab each production run is a hard question to answer and there is no universal formula and if you ask that question to your government, your lawyer, a testing lab and the inspection partner you may get four different answers. But if something goes wrong in the market place and a person is hurt, you will certainly be called upon to show your audit, inspection AND testing records. So being able to show you have a plan in place is a big step in the right direction. Getting caught without a well-documented plan or recorded results will exposure you significantly if the case ever went to court.

Regulatory Compliance in China: Questions Importers Must Ask!

Regulatory Compliance in China Questions Importers Must Ask

One of my good friends is a compliance officer in the US headquarters of a major international brand. He is responsible for making sure the products his company imports are safe and meet corporate, market and governmental standards.

He is also the go-to-guy in his company when there are problems with quality and safety issues. He asked not to be mentioned by name, but was kind enough to let me share with you the following insider information about regulatory compliance in China.

Readers of my blog typically have two types of concerns when it comes to compliance:

Import/Customs Clearance and Compliance

Import/Customs compliance into US/EU/AUS to make sure they have all the right paperwork and forms filled out. That’s fairly easy to arrange but the next part is harder…

Regulatory Compliance & Safety

While importers may bring in all sorts of different product, from electronics to furniture, they all have concerns about regulatory/safety compliance. The labs are pretty good at saying “you need to test this product in the following ways to ensure the SAMPLE is compliant”, but these buyers are left in the dark when it comes to how to set up a Compliance Program to ensure that if, God forbid, some customer got hurt and the courts asked the importer to explain their compliance system, the importer would be covered. It’s not enough to say “I sent the sample to the lab” because the lawyers will say “that’s just one sample, how did you confirm there was not a change to form, fit, function that could impact safety of the product when production was taking place at the supplier or even sub supplier level?” So these importers need help setting up a comprehensive system that coordinates documentation, sample collection/testing and monitoring of the Chinese factories.

Regarding Import/Customs Clearance and Compliance

Importer should also make sure they get the legal requirements down to the country and even state level, especially in the US there are many state laws. For example, the product could get in to the country legally, but then be found to be illegal in a certain state.

Regarding Regulatory Compliance and Safety

This side of things is much harder since you have to make sure all the products coming off the production line in China are really the same as the approved sample. And most important, that approved sample need to be compliant!

The easiest option, but perhaps the more costly optional, is having a product certified compliant, that assumes an appropriate certification exists! Certification encompasses the product design (usually you need to provide the product specs and design), testing and also periodic audits and reviews. Again, it will cost more if the category is optional and there are many categories that don’t have any certification at all.

Without certification, the way to tackle it is to make sure you have setup a procedure on how and when products are tested and inspected. From the physical testing/ safety side you’ll want products tested on each design, and from chemical side you’ll want a test anytime the material changes and at a minimum once per year.

If you’re using factories where you don’t have full trust or transparency (meaning you can’t be sure about their material), you’ll probably want to have a product tested each production run at least on the chemical side. If you have full control of the material you’ll want to test in coming material and probably randomly select finished product since sometimes the manufacturing process can add restricted chemicals.

You should also look at how samples get to the lab. If the supplier sends the samples rather than having a buyer representative pick them up, then there is risk that the supplier will send a “golden sample” which is sure to past the lab test, but may not represent the quality of the products coming off the assembly line!

Regardless, at the very least, you need a well-documented process of what you do when, and make sure you follow it and keep all papers. God-forbid there is a recall or legal action, if you don’t have a well-written process, you will find it hard if not impossible to win a court case. This needs to be considered part of doing business, if the buyer wants to be in the import-export game!

How about product recalls?

It’s essential to understand the requirement for a recall. If you do get customer complaints about issues with the product, there are requirements with what you need to do especially if anyone gets hurt. So there should be a process in place for a recall, and you need to have good tracking of all products and where they are in the supply chain.

Any other things we should be asking about in terms of compliance?

One other item to consider is social compliance. Making sure the factories are audited and comply. More and more there are also environmental audits requested by major retailers. So you have to worry about that as well.

Regulatory Compliance in China: Questions Importers Must Ask!

Regulatory Compliance in China Questions Importers Must Ask!

One of my good friends is a compliance officer in the US headquarters of a major international brand. He is responsible for making sure the products his company imports are safe and meet corporate, market and governmental standards.

He is also the go-to-guy in his company when there are problems with quality and safety issues. He asked not to be mentioned by name, but was kind enough to let me share with you the following insider information about regulatory compliance in China.

Readers of my blog typically have two types of concerns when it comes to compliance:

Import/Customs Clearance and Compliance

Import/Customs compliance into US/EU/AUS to make sure they have all the right paperwork and forms filled out. That’s fairly easy to arrange but the next part is harder…

Regulatory Compliance & Safety

While importers may bring in all sorts of different product, from electronics to furniture, they all have concerns about regulatory/safety compliance. The labs are pretty good at saying “you need to test this product in the following ways to ensure the SAMPLE is compliant”, but these buyers are left in the dark when it comes to how to set up a Compliance Program to ensure that if, God forbid, some customer got hurt and the courts asked the importer to explain their compliance system, the importer would be covered. It’s not enough to say “I sent the sample to the lab” because the lawyers will say “that’s just one sample, how did you confirm there was not a change to form, fit, function that could impact safety of the product when production was taking place at the supplier or even sub supplier level?” So these importers need help setting up a comprehensive system that coordinates documentation, sample collection/testing and monitoring of the Chinese factories.

Regarding Import/Customs Clearance and Compliance

Importer should also make sure they get the legal requirements down to the country and even state level, especially in the US there are many state laws. For example, the product could get in to the country legally, but then be found to be illegal in a certain state.

Regarding Regulatory Compliance and Safety

This side of things is much harder since you have to make sure all the products coming off the production line in China are really the same as the approved sample. And most important, that approved sample need to be compliant!

The easiest option, but perhaps the more costly optional, is having a product certified compliant, that assumes an appropriate certification exists! Certification encompasses the product design (usually you need to provide the product specs and design), testing and also periodic audits and reviews. Again, it will cost more if the category is optional and there are many categories that don’t have any certification at all.

Without certification, the way to tackle it is to make sure you have setup a procedure on how and when products are tested and inspected. From the physical testing/ safety side you’ll want products tested on each design, and from chemical side you’ll want a test anytime the material changes and at a minimum once per year.

If you’re using factories where you don’t have full trust or transparency (meaning you can’t be sure about their material), you’ll probably want to have a product tested each production run at least on the chemical side. If you have full control of the material you’ll want to test in coming material and probably randomly select finished product since sometimes the manufacturing process can add restricted chemicals.

You should also look at how samples get to the lab. If the supplier sends the samples rather than having a buyer representative pick them up, then there is risk that the supplier will send a “golden sample” which is sure to past the lab test, but may not represent the quality of the products coming off the assembly line!

Regardless, at the very least, you need a well-documented process of what you do when, and make sure you follow it and keep all papers. God-forbid there is a recall or legal action, if you don’t have a well-written process, you will find it hard if not impossible to win a court case. This needs to be considered part of doing business, if the buyer wants to be in the import-export game!

How about product recalls?

It’s essential to understand the requirement for a recall. If you do get customer complaints about issues with the product, there are requirements with what you need to do especially if anyone gets hurt. So there should be a process in place for a recall, and you need to have good tracking of all products and where they are in the supply chain.

Any other things we should be asking about in terms of compliance?

One other item to consider is social compliance. Making sure the factories are audited and comply. More and more there are also environmental audits requested by major retailers. So you have to worry about that as well.

Is your Product Compliant with Government Standards?

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Exclusive Video!
Q&A with Mike Bellamy at the Australian International Sourcing Fair in Melbourne (Nov 2014).

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Topic: How to confirm if your product is compliant with government standards

If you are unable to view the video due to firewall issues, here are links to related articles:

Product certification and compliance in China – The key steps

PassageMaker’s assembly inspection facility passes BSCI audit with flying colors

About the speaker: For over a decade Mike Bellamy has been an advisor to both small and fortune 500 companies wanting to do business in China. Mike has overseen the sourcing of over 200 production classifications, ranging from components for medical and automotive applications to finished products such as toys, textiles and hardware.

How to Register, Protect, Monitor & Enforce Intellectual Property (IP) Rights in China

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Exclusive Video: How to Register, Protect, Monitor & Enforce IP Rights in China

Speaker: PassageMaker Founder- Mike Bellamy

As presented at Global Sources’ China Sourcing Fairs in Hong Kong (Oct 2014) and Johannesburg (Nov 2014)

If you are unable to open YouTube due to firewall issues, here are some related links for your reference: How to register, protect and monitor intellectual property (Part 1,2 &3 )

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“Pros to Know” award winners have provided the articles and video content listed above

PassageMaker’s assembly & inspection facility passes BSCI audit with flying colors

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The Business Social Compliance Initiative is a leading business-driven initiative for companies committed to improving working conditions in factories and farms worldwide.

PassageMaker is honored to join this effort and proud of our compliance with this industry leading standard.

The official audit report is available upon request from either PassageMaker or BSCI itself.

Click on the following links to learn more about PassageMaker’s corporate philosophy, manufacturing philosophy, vendor code of conduct, memberships and ISO accreditation.

Protecting intellectual property in China: Don’t be a guinea pig!

Protecting intellectual property in China Dont be a guinea pig

In the West we say “don’t burn your bridges”

In China they probably say “let the bridges you burn light the way”.

In a recent China Daily article, Heavy Equipment Manufacturer LiuGong (think of a Chinese knock off of Caterpillar) proudly explains how their company, over a 50 year period, leveraged naive international buyers and partners to grow their business. Here are some excerpts, be warned, you will see no sense of remorse.

An Australian customer bought a loader from LiuGong. Because the loader was equipped with an imported automatic gearbox, the mismatch between it and the supporting system caused many malfunctions. The angry customer set the loader on fire.

LiuGong discovered one of its Italian clients had repainted its products once the machines arrived in Italy because the customer said, “the ugly design cannot be changed, and the rusty look is intolerable”.

In other words, the strategy was “get the order, ship some junk, learn where the customer is not happy, and try to improve on the next order”.

I’m not sure if this strategy is part of Sun Tzu’s art of war, but it certainly is commonly used by Chinese suppliers large and small, even today. And there is absolutely no sense of embarrassment regarding the abuse of clients for unilateral gain.

Pretty smart. They found a way for early clients to finance the R&D, yet early clients don’t get any return on that investment.

The article goes on to explain that

“Mergers and acquisitions became a shortcut for Chinese enterprises to acquire technology and marketing channels, especially after the financial crisis in 2008.”

But you don’t have to have a formal JV in place for your technology to be hijacked. Plenty of technology is transferred because naive buyers share the “secret sauce” without taking protective measures like registering IP or setting a 3rd party black box for sensitive assembly. (Click here for an example.)

Related Videos:

Video 1: Finding Suppliers
Video 2: Evaluating Suppliers
Video 3: Negotiations
Video 4: Project Management and Quality Control
Video 5: Protecting Your Intellectual Property
Video 9: Returning Defective Products
Video 10: Resolving a Dispute

Buyers are often seduced by the siren’s song of low cost. But after the sweet and temporary taste of low price fades, the bitter taste of poor quality remains for a long long time.

As the article in the China Daily proudly explains, many China factories simply do not believe the expression “you have one chance to make a first impression” because there are so many international buyers (who take unnecessary risks) that if the factory screws up the order, they simply drop that project and go out and find another buyer. Repeat process until they manage to improve their product and production process.

Conclusion:

Make sure you or your representative make sure the so called factory is reputable and has experience making exactly what you want at the level of quality you expect.

Know the difference between “factory can make this” and “factory has made this”.

Protecting intellectual property in China is paramount. Don’t be a guinea pig for a Chinese factory’s R&D department.