AboutMike Dodds Expertise I can help you find answers to general questions about international business and provide guidance on more specific ones.
Experience 22 years of international business. I've been involved in joint ventures in Japan and China, WOFEs in Mexico and China, and export sales to Asia.
Question I am a small importer of religious items. Recently I have been negotiating with a company in China to manufacture Christmas ornaments from my specifications. We are now at the point where I am to send money to start the manufacture of the items. Before wiring any money I would like to know how I can determine the legitimacy of the company. Can you help?
Thank you.
Michael Randall
The Greek Soul, LLC
Answer Hi Michael,
With Chinese companies legitimacy is always a huge concern. Many companies are actually holding companies that will claim to make things, but in fact go out and locate companies to make your items.
Do some Internet searching of the company, the commercial service for your country's embassy may know. Also, online trade journals and associations may have information about your potential partner.
Do not believe anything you hear from the partner themselves and do not trust their status as a "gold" member of TaoBao.com or Alibaba.com. Neither of these sites verify their members. Your own due diligence is the only thing to trust. Chinese suppliers will gladly tell you what you want to hear.
If you want, send me the company name and other information and I'll see if there are any links to verify them on Chinese websites. I'll let you know what we find.
To further protect yourself, consider setting up partial payments based on deliverables from your vendor. Such as 30% down to cover their material and design costs. Then another 30% upon your sign off/approval of the samples they ship to you. Remaining 40% upon release of the bill of lading to the freight company.
