How to avoid common risks with chinese suppliers in foreign trade orders

As a new buyer collaborating with Chinese suppliers for the first time, it is crucial to find a reliable partner and achieve satisfactory outcomes in terms of pricing, samples, service, quality, product inspection, smooth communication, cost, payment, and after-sales support. Therefore, when you find a Chinese supplier, the following steps hope to help you clarify your thoughts:

Quote Sheet:

You can request the sales team to provide a detailed quotation sheet that includes product images, pricing, descriptions, materials, minimum order quantity (MOQ), payment methods, shipping ports, packaging methods, and whether the price includes the option to print your logo, among other information, to facilitate comparison and management of your budget.

Sample Delivery:

Once the price negotiation is concluded, you can pay the sample fee as required and have the supplier create a sample according to your specifications. Additionally, communicate with them about international courier services and the time needed for sample preparation. By confirming the sample, you can judge whether the product quality meets your expectations and whether it is competitive.

Tips:

1. Common international courier services used for shipping include: DHL, FedEx, UPS, USPS (United States Postal Service), and TNT Express
2. some common methods of international money transfer:

Telegraphic Transfer (TT): This is a commonly used method for international money transfers, where instructions are sent and received via telegraph or the SWIFT network, allowing funds to be transferred quickly and securely.

Letter of Credit (L/C): A highly secure payment method guaranteed by a bank, where the exporter can receive payment upon meeting the terms of the letter of credit.

Western Union (WU): A leading global money transfer company with a wide network of agents, enabling quick transfers to nearly 200 countries and regions worldwide.

MoneyGram (MG): Offers global fast money transfer services, allowing users to transfer money directly to mobile phones or bank accounts abroad via smartphones, computers, or tablets.

Third-party payment platforms, such as PayPal, Alipay, etc., provide convenient online payment and money transfer services, suitable for small transactions and personal use.

Bank transfer: Directly transfers funds from the payer’s account to the payee’s account, a straightforward settlement method.

Each method has its characteristics, and the choice should be based on a comprehensive consideration of factors such as the amount of remittance, speed requirements, fees, and security.

You could ask your supplier to send you sample reports before delivery to avoid wasting time and cost if the sample does not comply with the quotation specifications.

Common trade terms (Incoterms):

in international trade are established by the International Chamber of Commerce (ICC) and are globally recognized trade terms used to clarify the responsibilities, costs, and risks between buyers and sellers in international trade. Here are some common trade terms:

FOB (Free On Board): The seller delivers when the goods pass the ship’s rail at the named port of shipment. The buyer has to bear all costs and risks to the goods from that point.

CFR (Cost and Freight): The seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are on board the ship.

CIF (Cost, Insurance, and Freight): The seller has the same obligations as under CFR but also has to procure marine insurance against the buyer’s risk of loss or damage to the goods during the carriage.

Factory Assessment:

You could pay for 3rd Institution perform factory assessment for you or request your supplier sent you photos include: their showroom,production line, warehouse ,equipments, docus about quality control ,ect:

Example:

Quality Management:

To effectively manage quality in small-scale factories, the following aspects should be considered: establishing a quality management system, enhancing employee training, implementing stringent quality control measures, and introducing advanced quality management tools such as quality management software, Statistical Process Control (SPC), Failure Mode and Effects Analysis (FMEA), and Total Quality Management (TQM).

Quality Control Issues and Mitigation: : There’s a risk that the order you place based on your satisfaction with the sample may not turn out to the same standards because it has been made at a different, low-cost factory. So request quality control is very important before shippment, you could request your supplier perform internal inspection and provide inspection reports or one-on-one vedio to you:

Example:

Communication Barriers: The language barrier and cultural differences can make it difficult to convey your requirements clearly, leading to misunderstandings and quality issues.

As a salesperson in international trade, sometimes you need to overcome time zone and language issues, often requiring communication at the customer’s local time. This is a basic requirement and responsibility of a salesperson. If your salesperson often replies slowly or is unable to communicate effectively, ultimately affecting your work and orders, you can choose to change suppliers.

Production Delays and Cancellations: There’s a high risk score given to the possibility of delays and cancellations from Chinese manufacturers. You could request your supplier sent you  photos to monitor the production process, if you they refuse to do that,there must have some problems with their production, You can stipulate the delivery date and penalties in the contract to ensure that your interests are not harmed.below is the example about late delivery and penalty:

Logistic & Cargo delivery: Before delivery the cargo, You can obtain sea freight quotes either by directly contacting freight forwarding companies or by requesting your suppliers to provide the quotations. Here are some common methods and considerations for getting sea freight quotes:

Direct Contact with Freight Forwarders: You can reach out to freight forwarding companies to request a sea freight quote. It’s important to provide them with detailed information about your shipment, including the weight and volume of the goods, the port of origin, and the destination port. This will help them give you an accurate quote

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Supplier-Provided Quotes: Your suppliers may also offer sea freight quotes as part of their services. They can provide you with an all-inclusive quote that covers not only the sea freight but also local charges, sea freight charges, and destination port charges

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Online Platforms for Quotes: There are online platforms like Maersk that allow you to get instant quotes for sea and land transportation, ensuring price locks and space guarantees, with precise arrival times for your cargo

you could ask supplier send you container load reports with all details and photos:Ctn qty, SKU NUMBER, Container No, etc..

Customs Clearance: After shipping, you could ask your supplier provide

Customs Clearance Docus to you

End of Topess:

Topess With over 10 years of dedicated experience, we offer customization to meet each family’s unique needs with high-quality and cost-effective children’s playhouses, Indian teepees, and kids’modular play couches. We are not just a supplier but a partner in children’s play and educational journey. Welcome to send us email for more details!

The process to work with us:

Step 1 – Design:

You can choose the toys from our e-catalog, or we can design new toys for you.

Step 2 – Quotation:

Send us an email or call us. Then we quote toys for you based on MOQ or your QTY.

Step 3 – Sample:

Free samples provided after you make a decision

Step 4 – Test:

Necessary process in your nominated lab or our cooperated labs in China before shipping samples.

Step 5: Place the order

After confirming samples before bulk production starts!