Chapter 1 – Factory Visits in China are Very Important

Would you send a substantial amount of your hard earned money to someone you have not met before with only a hope that everything will be fine later – of course not!

So why are you doing this with your newly hired factories in China?

To make a fine point, visiting your Chinese factories on a regular basis is a must for all importers if you want to minimize your risks. From my first hand experience, I know Walmart’s policy is for vendors to visit every one of their factories in 3 months intervals. Walmart is a cost conscious company that would not require these visits if they didn’t believe them necessary.

Why You Should Visit Chinese Factories

You regularly take precautions to protect your company’s interest and visiting your suppliers’ factories needs to be included as an insurance policy.

As an importer, you are liable if something happens with your products. If it comes to a legal battle, it is essential that you can prove to the court that you took all necessary precautions, including evaluating the factories on a regular basis. It is just as an important task as inspecting goods before shipment and inspecting them again upon arrival at your warehouse.

Even if the court concludes you do have product liability, they will not be able to add a negligence charge that can lead to punitive damages or even criminal liability.

Another important reason is maintaining a good relationship with existing suppliers and building new ones. The Chinese business culture favors frequent personal contacts with their overseas trading partners and meeting at their factories is one preferred method.

At a minimum there are seven main reasons why you want to visit Chinese factories:

  1. You want to see whom you will entrust with your precious orders before you place them
  2. You want to meet the factory management and determine whether it is trustworthy and competent
  3. You want to see first hand which technical standards and quality management standards have been implemented
  4. You must assure the factory is complying with the Chinese Labor Laws that prohibit Child Labor and excessive working hours
  5. You want to learn which other companies are working with that factory
  6. You want to find out what the factory’s actual production capacity is as opposed what you have been told
  7. You want to see whether the factory is subcontracting part of their production to other factories and decide if you approve of the subcontractors
Information Needed by Small to Medium Sized Businesses

This eBook assumes your company to be a small or medium size importer with an established customer base in your home country or a company interested in starting their own importing business but lacking the necessary experience to do so.

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