Biggest challenge to Identify and verify fraudulent suppliers

More than half of the importers interviewed in a survey conducted by Global Sources, said that verifying suppliers is the most daunting task they face when importing from China. Asking for original product and production certificates is one of the main measures buyers take when confirming exporter claims. Visiting the factory and talking to past clients are equally important, survey results show.

The survey also reveals more buyers are now willing to consider legal action if their intellectual property is compromised in the country. The majority of importers believe sourcing from reputable companies is the best way to protect their IP, but only a few file patents or register their trademarks in China.

Almost 80 buyers from various industries and with vast experience in the China sourcing business were interviewed for the survey. Most respondents are from the US and the EU.

Here are detailed results of the survey.

What are the top five challenges you face when sourcing in China?
Most buyers said identifying fraudulent suppliers is the biggest problem they currently face. With hundreds of thousands of exporters in the country, it is easy to be misled, but due diligence and proper supplier verification can help minimize risk.

Defective products and delayed deliveries are also among buyers' top concerns. Renaud Anjoran, founder of Sofeast Quality Control, gives advice on what to do after receiving bad quality products.

QC throughout the production process and sample approval/product testing are the most important things buyers should be doing, according to David Dayton, owner of Silk Road International.

Dan Harris from China Law Blog outlines the four essentials for sourcing in China that will help protect buyers.

What are the top three steps you take to verify suppliers' credentials?

Almost 70 percent of surveyed buyers ask for original certificates from suppliers, while 40 percent believe visiting the factory is the best way to verify a company.

Talking to past clients is in most cases the most effective, but many factories may be reluctant to give their customer names.

To help buyers decide on which measure works best for them, Renaud Anjoran lists the information that can be obtained from each method of verification.

What are the top three steps you take to protect your intellectual property when importing from China?

The majority of survey respondents said buying from reliable and reputable companies is most effective when it comes to protecting IP. Supplier selection is no doubt the foundation of secure sourcing from China. Here are some guidelines to follow when evaluating companies.

Asking for samples and molds to be returned is another measure many buyers take. But your contract needs to clearly specify to whom the molds belong.

Would you take legal action if your IP was infringed in China?

More and more buyers are willing to take the legal route to deal with infringements of their IP. But it is also important to take precautionary measures before you start outsourcing.

You can also opt for undercover intelligence to find out if your IP has been compromised. Read more about how much it costs.

How do you prefer to source in China?
The majority of surveyed buyers prefer to source directly from factories. A handful of importers go through trading companies, which could be advantageous in some instances.

Sometimes, it may be difficult to distinguish a manufacturer from a trading company. It is important to ask a lot of questions or pay for a background check.

More information
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