China is the greatest exporter and trading country in the whole world these days. It has been the biggest exporter of goods in the world since 2009. It is not at all surprising that more companies are these days producing their items in China.
Additionally, factory scams affect China's manufacturing sector, even though China is home to many competent manufacturers, it would be advisable to use caution while doing business with Chinese companies.
Therefore, a trustworthy sourcing company on your side can be an asset to you. However, before hiring them it will be worth exploring how to verify Chinese sourcing companies.
Some imported goods were of poor quality due to dealing with unprofessional Chinese companies. Doing your homework before making a deal with any kind of Chinese company is a great idea.
China is one of the most significant producers of industrial goods due to its low cost. If you want to run your company efficiently, direct sourcing in China may be a wise choice.
However, despite the large selection of goods available, many overseas consumers may find it difficult to make purchases due to language hurdles and inconsistent business procedures. A Chinese sourcing company can be quite helpful to you in this situation.
Let us help you if the idea of a sourcing company is unfamiliar to you. A sourcing company is, in its most basic sense, a third party that helps in your search for suitable suppliers in a certain nation.
These sourcing company representatives typically are acquainted with local business cultures and procedures and may even speak the language.
However, before you deal with any such sourcing companies in China, it will be a good idea to verify the background of the company so that you may not get scammed. Let us discuss in this article how to verify Chinese sourcing companies.
What is a China sourcing company?
A sourcing company is a independent company who assists international companies in importing products made in China and who may also offer supplemental services such as packaging, customisation, ODM, OEM, and quick delivery in exchange for small fees.
What exactly does a sourcing company do?
The goal of a modern sourcing company or organisation is to assist you not only in finding affordable goods but also in ensuring the stability and legality of your supply chain.
What the top Chinese sourcing company agent can perform for your organisation is as follows:
Find new products and manufacturers
Audit existing suppliers
Negotiate and draft your contracts
Guide you about the market trends and designs
Visit companies and conduct quality audit
Reduce your risk of importing any goods from China
Manage the process of shipments and logistics
Extra customization services
Why do you have to engage a sourcing company from China?
You may find thousands of wholesale supplier companies online if you are sourcing from China for FBA.
However, choosing which supplier could offer the best quality at the most competitive price would be difficult because the majority of factory manufacturers do not speak English and can only sell their products to China buying agents or exporting companies who then sell them to international importers.
Additionally, some customers want additional assistance while purchasing products for e-commerce. A China sourcing company can be useful in this situation.
So, how to verify Chinese sourcing companies so that you may not end up getting scammed? The following are a few things that you need to do before entering any contract with the Chinese sourcing company.
1. Check the business license
Verifying the business licence is the first thing to do when performing due diligence on a Chinese company.
You can avoid scams by looking up the company's validity through a business licence. You should concentrate on the "business scope" while looking at a company's business licence.
Hiring a legal counsel to confirm a local Chinese business is the honest technique to check the business licence.
2. Verify and search their tax registration number
An 18-digit registration number has been introduced by the Chinese government. For business-related information in official records, use that number.
In Mainland China, businesses have adapted the move to have a registration number. The "Unified Social Credit Code," an 18-digit number, became operational at the end of 2017.
It is required to have the registration number of the Chinese business licence date. The following are some numbers:
The 1st number: Usually a 9 representing the registrar authority.
The 2nd number: Classification of the entity.
From the 3rd through the 8 number: Region of registration.
From the 9th to 17th numbers: Organization code.
The 18th number: check digit.
3. Search and check their customs records
You must go to the P.R. China Customs District website. You have to type in the business name, URL, or Unified Social Credit Code.
Always verify the unified social credit code for Chinese companies or suppliers. Having a Chinese company licence number, tax documentation, and customs certificates would be beneficial.
4. Check the Chinese sourcing company’s website
You must examine the website to see if the Chinese sourcing company is still valid before using them.
Sometimes a business's registration or licence number expires. The record for a corporation is available at http://gsxt.gov.cn/index.html.
For company verification, type the name of the company or the registration number. On the business licence, the upper right corner has the Unified Social Credit Code.
5. The location of the sourcing company
Browse Google's directory of Chinese sourcing companies to find a sourcing company's location. Are they foreign businesses with offices in China, or are they Chinese businesses? Select a sourcing company with a successful track record.
6. Search Google for any warnings
To look for warnings and the expiry date of the corporate page, utilise Google or Bing to know if a China sourcing company's customer service was poor in the past, according to many retailers.
Presently have legal counsel in China. Nearly all B2B marketplaces offer their user’s company verification services. To find the actual factory of nearby companies, use company verification
7. Check the experience
Chinese and Western businesses run very differently from one another. These discrepancies are primarily due to variances in culture, traditions, and thought processes.
It is advisable to pick a sourcing company with extensive knowledge of China. Companies that specialise in sourcing from China will have a wide network of trustworthy contacts that are essential to your company.
8. Check reference
Select a sourcing company that can provide you with actual references from other companies. You must not forget to visit all these reference websites and also speak with them personally.
Please inquire about the calibre of their offerings and how long they have worked with the sourcing company. Ask if they have any recommendations for any other sourcing company in China.
9. Check how they have handled quality issues
The quality of the product is crucial when purchasing goods from abroad. Ascertain the steps the sourcing company has taken to address quality issues. Make it known up front that you will not put up with a product of poor quality.
10. Check language ability
The ideal sourcing company should be fluent in both Mandarin and English. Make sure your main point of contact speaks and writes English well.
Since you might occasionally need to speak with the Chinese office personnel directly, it would be ideal if they were also fluent in English.
11. Expertise in the product you want to buy
Different sourcing companies specialise in various fields. You must confirm that the product you are interested in can be sourced by your sourcing company.
You can request past order records from your company representative or buyer references. A sourcing company that deals with just one product might be hard to come by. Therefore, request buyer references from companies in your sector.
12. Choose a sourcing company with good ethics
Several sourcing companies are allegedly receiving commissions from vendors. While such an agency can speed up the process of finding suppliers, the product's quality might be questionable. Make sure to only accept proposals from suppliers who satisfy your quality and certification requirements.
We hope you have got sufficient food for your thought so far as how to verify Chinese sourcing companies are concerned. If you are planning to source products from China, then finding the right kind of China sourcing agent will be the crucial step.
Obtaining the quality products at the affordable price and within your timeframe can help your business prosperity. Take your time to select the right sourcing agent. The future of your business will depend on it to a great extent.