China sourcing is safe with the right precautions
Category: Blog; Updated on: 2018-06-03 14:42:16; Views: 1488
Fears about scams and intellectual property infringement are common concerns and not without reason, but Mike Bellamy, a long-time China sourcer and founder of PassageMaker, said these fears are unnecessary with a few precautions.
"I've made lots of mistakes during my 15 years, and I'm crazy enough to tell you about my mistakes so hopefully you won't fall into the same pitfalls," Bellamy told an audience of buyers on October 21, the last day of the Mobile Electronics Fair.
The three most important things to consider, he said, are finding the right supplier, auditing the factories and ensuring the names on bank accounts and buildings match the name of the company.
Buyers should not settle on a deal while thinking, "I hope I found the right supplier," Bellamy said. Buyers should do enough research to be confident in their knowledge that they have found the best fit for their company.
Bellamy also recommends buyers get out and see the factory. This is one of the best ways to ensure that the factory exists and is capable of producing the products it claims it can produce in the volume it claims it can produce them.
"I like to say you need 5K to play," he said, explaining that $5,000 should ensure buyers can do things right. This includes inspecting the factory, drafting a contract, hiring an engineer to ensure specifications are correct and having enough left for an emergency flight to China if need be.
Another way people get scammed is by sending money to an account that is not actually associated with the manufacturer. Bellamy used the example of a worker who had recently been laid off from a manufacturer who then started contacting buyers with whom she had previously worked. Since she was a trusted source, at least one buyer sent money to a personal bank account she specified.
The main message of Bellamy"s talk, though, was that buyers needn't worry about the horror stories if they do things properly, including getting a good contract. Judges will enforce contracts, contrary to popular belief, he said. It just needs to be done correctly and the Chinese should match the English contract, as the former will take precedence.
He added that intellectual property can also be protected in China with a proper contract and IP registration, which he said is affordable in China, especially compared with the fees in the United States.