Too often, importers select their Chinese manufacturer based on feelings, rather than through conscious decisions. In many cases, small businesses choose a factory based on completely irrelevant factors such as the way their site looks, or on the basis of vague (and unverified) promises made by a sales agent.
How to recognize a reliable Chinese supplier in 14 steps: In this article, we explain what the fundamental characteristics of a competent and reliable supplier are.
This list mainly refers to the technical factors that a manufacturer must be able to meet in order to make a product that complies with regulations and your quality requirements. It is unlikely that a manufacturer who cannot meet one or more requirements will become a long-term partner.
1) Main Product
What matters most when choosing a Chinese supplier is their ability, expertise and experience in making the same product you intend to buy. This should never be taken for granted.
Spend a few minutes on Alibaba and you will find many suppliers, often registered as manufacturers, offering products of a very different nature. This is not necessarily a bad sign. There are many reputable manufacturers selling related products (for example: watch manufacturers sell nylon straps). I would say that about 50 – 60% of the suppliers listed on Alibaba fall into this category. That said, if you’re specifically looking for watch straps, go find a manufacturer that specializes in straps rather than a watch manufacturer that sells straps as a side business.
Then there are the opportunistic (and disorganized) merchants or small wholesalers who sell any kind of merchandise they come into possession of. Such vendors are often tiny companies lacking both product knowledge and long-term planning.
These suppliers stand out for having paltry minimum purchase quantities (MOQs) and sell everything from phone chargers to makeup brushes. These traders can rarely, if ever, offer the supply of a product in the long term, let alone comply with European safety standards.
2) The main export markets
A reliable Chinese manufacturer is not necessarily a manufacturer that exports its products primarily to Europe or the United States. There are excellent producers who, however, focus on the Asian and African markets; or on the Chinese domestic market.
Manufacturers that primarily target developed markets tend to maintain a high level of quality, low defect rates, and also tend to comply with European and American safety regulations.
3) Product safety compliance
Buyers based in Europe or the United States must ensure that imported products comply with one or more regulations. There are various types of product safety standards and norms to follow, such as:
- Electrical safety regulations (e.g. CE, EMC)
- Chemicals and substances regulations (e.g. REACH and FHSA)
- Product packaging regulations (e.g. PPPA)
- Physical and mechanical standards (e.g. ASTM and EN ISO)
- Regulations on toys and children’s products (e.g. EN 71 and CPSIA)
- Textile product regulations (e.g. OTEXA)
- Labelling regulations (e.g. the Tariff Act 1930)
Confirming which rules and regulations are applicable to your product is not always easy. What certainly does not make things any easier is the fact that less than 5% of Chinese manufacturers are able to demonstrate compliance with European safety standards. Therefore, antecedent compliance is a crucial factor when making a selection of suppliers. A supplier without prior compliance may still be able to produce RoHS compliant products, but the risk is much greater.
Compliance with regulations is crucial when importing from China. The importation of non-compliant items can lead to mandatory withdrawal, or to the seizure of the cargo by the customs authorities. You may also be forced to pay millions of dollars in damages, in case your product causes personal injury. However, while regulatory compliance doesn’t give you legal immunity in case someone gets hurt, there’s another reason why product safety standards (and the severe penalties related to non-compliance) are implemented.
A CE-compliant laptop charger is much less likely to pose a fire hazard than a cheap charger without the safety mechanisms.
4) Chemical control
Some substances such as phthalates, lead, cadmium and formaldehyde are banned or strictly regulated in most markets, especially if they are used in toys and other children’s products. That said, numerous regulations also restrict the presence of certain substances in textiles, jewelry, and a wide range of other consumer goods.
In the European Union, chemicals and substances are regulated by the REACH Directive. In the United States, the legal situation is more fragmented and flexible. In California, substances contained in consumer goods are regulated by California Proposition 65. However, it is still allowed to sell products containing these regulated substances within the states, as long as a label is attached to the product or product packaging informing of the presence of these substances.
But such labels that inform that the consumer risks impotence or can develop cancer with the use of your product, is not good for business. Therefore, most importers prefer to ensure compliance with current substance control regulations. What most importers are not aware of is that only a minority of Chinese manufacturers are aware of the chemical content of their products. Those who are aware of this also tend to demonstrate prior compliance with product safety directives.
The root cause of this problem is not to be blamed on the manufacturers involved in final assembly, but on their subcontractors of raw materials and components.
5) Quality standard
Most people believe that the definition of a “good manufacturer” means producing high-quality items. This is not always the case. H&M certainly can’t compete with Dior in terms of quality and design, but it can do so based on the surge in the share price over the past decade. And few people think that H&M is a “bad company”.
This is also true in the context of Chinese production. There are reliable and extremely sophisticated manufacturers that specialize in a modest market segment. There is nothing wrong with that, but before sending the payment, make sure that the supplier is capable and willing to make products that match your quality requirements.
6) Quality Management System
The manufacturing process is not a science. It’s not a question of “if” there will be defective items, but how many will be. To minimize the number of defective items, the manufacturer must check the quality before, during, and after production. This procedure is called a “Quality Management System”, or QMS (the acronym for Quality Management System). Roughly speaking, the operation is as follows:
- Control of materials and components supplied by subcontractors.
- Checkpoints that carry out visual inspections (to detect cosmetic defects) and functional tests (to detect functional defects) during production.
- Visual inspection and functional testing of fully assembled units.
The QMS must also specify how to handle faulty drives. Registers should also be compiled for any future reference and statistics.
When it comes to QMS compliance in China, there are three categories of manufacturers:
- Those don’t adopt any QMS, and they also honestly tell you that they are not compliant (85 – 90%)
- Those who claim to be QMS compliant and are happy to show a certificate to support that claim, but do not apply the actual quality management procedure. (10 – 15%)
- Those do not adopt any QMS or claim to do so. (5 – 10%)
The most popular QMS used by Chinese manufacturers have ISO 9001 certification. The compliant supplier must be able to show an ISO certificate and documentation of previous inspections. In my opinion, what really matters is not the type of QMS (unless a specific protocol for a certain product is required by law), but that manufacturers give a detailed explanation of how their QMS is set up and that they support these statements with the relevant documentation.
7) Share capital
The share capital, at the moment, is specified on the business license. The amount of share capital is a very good indicator of the size of a producer’s business. In fact, it is rather unlikely that a company with a small amount of capital could be a producer. What is considered a sufficient amount of capital varies between different industries and is determined by comparison with the “industry average”.
For a watch manufacturer, one million yuan (the Chinese currency) is a decent amount, while I would think twice before working with an electronics manufacturer that has figures ten times lower than that amount.
8) Price
Are you surprised that I didn’t put price as a top priority? The price is important, but only if connected to a product that complies with the product safety standards in force in Italy. Therefore, it is a waste of time to negotiate prices with a manufacturer who is unable, or unwilling, to comply with European safety standards.
A low price isn’t always what it seems. Many suppliers deliberately report low prices to capture the buyer’s attention, with the intention of increasing the price just before the order (at this point, it is too late for most importers to find another supplier), or using inexpensive and substandard materials.
Even though a manufacturer may have the technical expertise to produce your items, that ability is of little use if the supplier doesn’t cooperate or has no interest in working with you.
9) Transparency
Manufacturers who do not allow quality control or factory inspection always have something to hide. To eliminate unreliable manufacturers early in the process, I suggest you inform them as soon as possible of upcoming quality inspections and spot checks. This tactic tends to scare away scammers and low-level factories, saving you a lot of time and money!
It is also important to inform that you will not transfer any amount of money before the sales agreement is signed and stamped. Chinese manufacturers who refuse to sign sales agreements generally have a reason for doing so.
A reputable manufacturer should also not hesitate to allow access to their documentation, including business license, QMS certification, product certification, and lab test reports. Manufacturers who refuse to give you access to these documents either do not want you to see them or, more simply, do not have them! Regardless of the reasons they give, always stay away from these providers.
10) Communication
You wouldn’t have to wait for two weeks to receive a response to your emails. Manufacturers who are not interested in your order are not worth your time. Some Chinese suppliers also tend to avoid answering some questions. If they intentionally avoid answering the fundamental questions related to compliance, production capacity, and quality, forget them and move on to the next supplier.
That said, don’t overestimate their knowledge of the English language, and remember that communication between different time zones slows things down, for obvious reasons. In addition, communication is mutual. It’s critical that you give the manufacturer clear and consistent product specifications, as well as quality requirements. Never take anything for granted.
11) Location
China is a huge country, but most industries are concentrated in a few cities or provinces. Here is a list:
- Shenzhen: Electronic Systems
- Xuzhou: Glass objects
- Xiamen: Textiles
- Yongkang: Auto parts
- Shantou: Toys
- Dongguan: Plastics
- Wenzhou: Glasses
- Suzhou: Wedding dresses
Manufacturers based in these industrial districts are more likely to obtain components, logistics services and skilled workers.
12) Design Service
The design of a product must always be adjusted on the basis of a manufacturer’s manufacturing capacity in terms of dimensions, materials, components and tolerance. Disorganized producers tend not to have such an overview; therefore, I am unable to provide you with information on certain technical limitations that your product design must comply with.
Before putting money on the table it is essential that a manufacturer tells you what they can and cannot do. However, some suppliers don’t do this right away and offer their customers in-house design support, assisting with product labeling design, product packaging artwork, and more.
13) Trade fairs
Participating in trade fairs, especially in Europe and the USA, shows that a manufacturer has higher ambitions than average, as opposed to a short-sighted factory manager.
14) Alternatives for logistics
Chinese manufacturers don’t tend to differentiate themselves much in terms of the freight fees and shipping options they can offer. Reliable manufacturers have already established which logistics companies take care of the export and shipping procedures. So it’s up to you whether you want to handle the shipment through your own agent, or let the manufacturer take care of it for you.
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