What Every Buyer Needs to Know

After narrowing down a list of potential suppliers from a few hundred to five or less, you should contact the suppliers and conduct the RFQ or request for quotation. Their feedback should allow you to narrow down the list further to only the top two or three based on pricing and nonprice attributes.

The next step is to validate if the suppliers are legitimate. There are two essential types of verification:

Type One is the Factory Audit. This is to verify that the company has a QC system in place and it as the production experience to supply you with the goods it says it can make for you.

Type Two is an Operational Audit or Due Diligence. This is to confirm that the supplier has a good reputation and is financially strong enough to stay in business long enough to complete your order. In other words, the company is not likely to disappear with your initial payment.

There are professional service providers available that conduct these types of verifications at very reasonable prices. I highly recommend you engage professional support if you do not have the skill set in place to audit factories on your own.

Here are some other tools you can use on your own which compliment the work of third-party service providers to verify suppliers.

1. It does not cost you anything to ask for references. If a supplier cannot give you a few happy clients to visit with, this is a big red flag.
2. Confirm that you have the right to visit the production line and check on your order. A supplier that comes up with a bunch of excuses why you cannot visit is one that does not have the ability to make your product and is scared that you will not like what you see if you visit. It could also be as simple as the supplier is a trading company and is worried you will cut it out of the supply chain once you realize it provides little value. Speaking of trading companies, sometimes, especially if your order is small, it makes sense to use them, but I dislike trading companies that say they are the factory when really they are just brokers.
3. Ask to see the supplier's QC manual. If it does not have an ISO- compatible and well-documented system in place for making a given product, run away. If you want to see what a Product Quality Manual looks like, you can check out a sample at www.PSSChina.com