Working with Chinese Companies: Do Your Due Diligence
by Carrie Hinkel on November 19th, 2007
More U.S. companies are working with Chinese vendors because of the discounted price on a variety of products. Some of these business relationships will work out, and others will not. Just like when dealing with American companies, there are Chinese companies that are good, and others that are in the business of taking your money and giving you shoddy merchandise in return.
To ensure that the Chinese vendor you’re interested in doing business with is trustworthy and reputable, you need to do an extensive background check as well as some online research before you place an order or give them money. Now, Chinese companies aren’t particularly forthcoming with customer references, so you will need to determine if they have a good reputation on your own. But, don’t worry, there are plenty of ways to see if a Chinese company is honest and provides quality products.
What you can do to help insure that a Chinese vendor is reputable:
1. Do a search on Google. Enter in the Chinese company’s name and see what information comes up. Take the time to read everything. You may also want to check other search engines, like Yahoo! to make sure that you are reading as much information as you can.
2. Talk to other U.S. importers. There are several websites devoted to businesses that import products from outside the U.S., including China. One site is TheImportForums.com , but there are also plenty of others, like the Importing/Exporting board in the goWholesale Forums . Ask members if they have heard of the company, or if they have had any experiences with them. Remember, members are on these sites because they want to share information, so most likely they are more than happy to answer your questions.
3. Have a professional research company find out for you. Believe it or not, there are companies out there whose business it is to do research, check references and perform background checks on foreign businesses and their owners. One company that specializes in Chinese companies is Chinese Company Research Services . There are several other companies out there as well, so if you do some research on Google you will come up with a list of research companies and then you can pick the one you are most comfortable with.
4. Talk to the U.S. Embassy in China. They have a Commercial Service division set up specifically to help U.S. companies do business in China. They can be of great assistance in helping you find reputable companies as well as telling you which ones to stay away from. Their website is: http://www.buyusa.gov/china/en/ .
Doing business with Chinese companies doesn’t have to be risky or even nerve wracking. You just need to do plenty of research before deciding to work with a particular vendor. If you don’t, you very well may end up with a pile of junk at your warehouse – and when that happens, good luck getting your money back. Avoid the hassles and headaches by feeling comfortable about a Chinese business before you hand over any money for products.