AboutHank S Expertise Ask me about sourcing products in China, finding manufacturers in China, importing from China, developing new products in China, moving manufacturing to China, price negotiations with suppliers in China, and logistics-related issues.
Experience I lived in China from 1993 to 2003 where I learned Chinese and worked in the fields of logistics, marketing and manufacturing services. I have visited hundreds of factories in China. I am authorized by the NYS Unified Court System as an interpreter of Mandarin Chinese. I have an MBA in international business and entrepreneurship. I work in a U.S. company as product development and sourcing manager.
Education/Credentials MBA, International Business & Entrepreneurship, City University of NY
BA, East Asian Studies & Chinese, City University of NY
Studied international trade taught in Chinese at the University of International Business & Economics in Beijing
Chinese language study at Beijing University & Nanjing University
I am planning on purchasing some electronic devices from China. How will I be sure that the company I will be purchasing goods from will ship the products after I make the payments? Is there any kind of contract I should into? What if that company does not act in accordance to what stated in the contract? Please advise. Thank you very much.
Answer You should read my previous posts. Yours is one of the most commonly-asked questions in this forum.
The short answer to your first question is: you CAN'T be sure the company will ship the products after you make payment. This is why there is such a thing as a Letter of Credit (L/C). I'm not going to explain L/C's here (you can look it up), except to say that they're expensive, and if you're not buying in relatively large quantities (e.g. 10,000 dvd players or something) then it doesn't make sense.
At the very least you need to have someone (1) visit the supplier in China to confirm they're legit, and (2) inspect the goods before they ship. This costs money. I can't tell you how many people are too cheap to do this, and they foolishly wire money to some stranger in China who they never hear from again. Or they get a shipment of garbage. So that little bit of money they were trying to save by not doing their due diligence turns into a much bigger loss.
If you want to be an "importer", then you will be buying in large quantities (FULL CONTAINER LOADS -- if you don't know what this means then you're not an importer). And when you amortize the cost of hiring someone to do the vendor vetting and quality inspection, that cost is negligible.
But if you are trying to go shopping from China, then you will almost certainly get burned. Even if the company you're dealing with is honest and legit, too much can go wrong to just leave everything up to fate without taking proactive steps to verify that the supplier has done everything in accordance with your instructions and expectations.
Contract? Sure you can write a contract. But what good is a contract with a thief? Let's say the company you're dealing with isn't a company at all -- it's just some fraudster. And let's say he signs your contract and steals your money anyway. Now what? If you couldn't afford a few hundred bucks to do due diligence on the supplier and QC your shipment, then why on earth would you spend thousands of dollars or tens of thousands to litigate against some random scammer in China? A contract is only useful if you're dealing with a legit business and if you're in a position to enforce it.
What you need is to have someone who is qualified to judge the legitimacy of this vendor go and visit them face to face on your behalf and report back to you. Then you can pay the vendor a 30% deposit when you place the order, and have someone inspect the shipment before you pay the balance. Depending on where your vendor is located, I can have my inspector do this for you for a few hundred dollars. Or simply Google "China inspection services" and you'll find a million companies offering this service.
