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If you are sourcing from China, you have probably used Alibaba, Global Sources or you have visited the Canton Trade Fair.  Once you have located a vendor, you’ll want to visit their web site, correspond via email and ask for samples.

If you are purchasing a lot of items (1000’s) or expensive items, of course you’ll want to take a plant tour to validate manufacturing facilities and working conditions.  But even with all this due diligence, you still may not know who you are dealing with.  This is because in China, setting up a business is almost a national pastime.  There are factories, resellers, representatives, channel partners…and of course, unscrupulous crooks, just like in any country.

When I am working with China sourcing clients, I coach them to take additional steps in due diligence, such as talking with references about their experience with the vendor, and hiring a local Chinese service to visit or camp out at the plant.

Recently, I came across another service that I think is very helpful.  A Silicon Valley software-as-a service (SaaS) company, called iSafeTrade, goes a step further.   They have developed a solution that scores foreign vendors based on criteria such as time in business, number of imports into the US, web site establishment date, business license, and others.  iSafeTrade provides a remarkable view into the legitimacy of a business that you cannot get elsewhere.

Qualifying your China vendor is one of the most difficult tasks in China sourcing.  You must do your homework to minimize your risk.

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