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Can I Trust Suppliers on Alibaba or Made-in-China?

Thursday, 26th April 2012

Many people ask the question: I've gone to Alibaba or made-in-china and found suppliers. But can I trust them?

It's a great question. While these trade websites are an excellent place to start your research you do need to be aware of the risks. Here are the 3 most important risks:-

1. They Do Contain Fraudulent Suppliers.

Alibaba's CEO recently stepped down because of a corruption scandal. Alibaba staff were being bribed by fraudulent suppliers. These "suppliers” have nothing real to sell at all.

They offer products for sale at very attractive prices. Then once you've wired a deposit they take your money and run. Never to be heard from again.

Not only were Alibaba staff aware they had fraudulent suppliers on their books, but they were actively taking part in the fraud by accepting bribes to turn a blind eye.

And given they have hundreds of thousands of suppliers on their books, it’s very hard for these trade websites to verify all their suppliers.

Easy Imex is an alibaba gold supplier and I know from personal experience that alibaba's verification process consists of a short 5 minute phone call to the phone number we provided!

Don't assume that because they are a gold supplier it means they are a capable manufacturer.

However, outright conmen are not actually your greatest risk. Which leads me to risk number two…

2. Middle Men purporting to be manufacturers.

There's nothing wrong with using an agent or trading company. However, big problems occur when a middleman with no experience or poor management skills claims to be the manufacturer. Our team regularly runs into these guys.

In fact, I'd say they will likely be your biggest problem.

Some of these characters are so brazen they will actually meet up with you and tour you around "their" factory - when they may have never been to this factory before!

Their game plan is simple - offer very attractive prices to get you in.

Then subcontract manufacturing to a very cheap, low quality supplier. And a cheap supplier will use the cheapest materials and try and save money in every way possible.

They don't expect you to return for a repeat order anyway - in spite of the fact they will tell you they are "in it for the long haul"!

You may not realise you're in this situation until it’s too late.

3. You don't know who you are really dealing with.

Without seeing the factory on the ground and asking the right questions, you truly don't know who you are dealing with.

You don’t know if they are a clean, well organised factory. You don’t know their actual production capacity and capabilities. You don’t know if they have any quality controls systems in place. You don't know how much production they outsource.

Also, your perception of the supplier is skewed by speaking with the sales staff. Staff with poor English may actually represent a competent factory. Staff with excellent English may represent a poor supplier. But you have no way of knowing.

The problem is there are a lot of good suppliers in China but there's also a lot of bad suppliers and downright horrendous suppliers. And sorting the good from the bad is almost impossible to do from overseas on the internet.

It's much easier if you have your feet on the ground to establish the truth behind the supplier and the likely product quality you will get.

These trade websites are a great starting place to find suppliers, yet without doing proper follow up, you're taking a lot of risk!

I often tell people, you can use these trade websites as a starting point, but you truly have no idea who you are dealing with if using these trade websites alone.

It's one thing to source a product and get a price. It's another to source a product from a reputable manufacturer, with genuine experience and all the relevant certifications and getting them to understand your exact requirements.

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