Introduction
Outsourcing through a trader can offer certain advantages, such as reduced workload, shorter delivery times, and lower minimum order quantities (MOQs). However, it also presents negative sides like higher unit prices, and less adaptive quality and features.
Most businesses prefer to work directly with manufacturers to ensure better control over quality and cost, being directly in touch with a wider catalog and having direct access to potential customisation. Unfortunately, from abroad, it can be challenging to determine whether you are dealing with the manufacturer or a trader.
Verifying whether your Chinese supplier is a manufacturer or merely a trader is crucial for maintaining control over your supply chain, ensuring product quality, and managing costs. Manufacturers typically offer better pricing, more direct communication, and greater control over the production process.
Fortunately, solutions exist to verify and confirm that you are communicating directly with the manufacturer, ensuring your company a better position for the long term. Here are three effective methods to ascertain that your supplier is indeed a manufacturer.
Ask and Check the Company Registration, Its Registered Capital, Business Scope and Business License
Start by requesting the supplier’s company registration documents. These documents include the registered capital, the business scope, which indicates the scope of their business activities, and the business license. A genuine manufacturer will have a larger registered capital, reflecting substantial investment in manufacturing facilities and equipment. Cross-check these details with official government databases or third-party verification services to ensure their authenticity.
Steps to Verify Company Registration:
1. **Request the Business License**:
– The business license will detail the company’s registered name, legal representative, business scope, and registered capital.
2. **Verify Registration with Government Databases**:
– Use official Chinese government websites like the National Enterprise Credit Information Publicity System (NECIPS) to cross-check the details provided.
3. **Check the Registered Capital**:
– A higher registered capital suggests substantial investment in manufacturing capabilities. Compare the registered capital to industry standards for manufacturers.
4. **Examine the Business Scope**:
– Ensure that the business scope includes manufacturing activities. Traders may only list activities related to trade and sales.
5. **Use Third-Party Verification Services**:
– Engage with services like SGS, Dun & Bradstreet, or local consulting firms to verify the authenticity of the documents and the legitimacy of the business.
Identify Legit Quality Control Certificates
Quality control certificates, such as ISO 9001, indicate that a company adheres to international standards in its production processes. Ask your supplier to provide copies of their quality control certificates. Verify these certificates with the issuing bodies to confirm their legitimacy. Manufacturers typically have these certifications to assure customers of their commitment to quality, whereas traders might lack them or provide fake documents.
Steps to Verify Quality Control Certificates:
1. **Request Copies of Certificates**:
– Common certificates include ISO 9001 (Quality Management), ISO 14001 (Environmental Management), and ISO/TS 16949 (Automotive Quality Management).
2. **Verify Certificates with Issuing Bodies**:
– Use the official websites of the certification bodies to verify the certificates. For example, ISO certificates can be verified through the International Organisation for Standardisation (ISO) website.
3. **Check the Validity and Scope of Certificates**:
– Ensure that the certificates are current and applicable to the products you are sourcing. Verify the scope of the certification to confirm it covers the manufacturing processes.
4. **Look for Additional Certifications**:
– Manufacturers often have additional certifications like CE marking, RoHS compliance, or specific industry standards that traders may not possess.
Physically Visit the Address Referred by the Contact and See Whether It Is the Manufacturing Address
A physical visit to the supplier’s address can provide invaluable insights. Verify if the address provided by the supplier matches the location of the manufacturing facility. During your visit, request to meet the owner or head of sales. Observe the email address formats and compare them to those used in your correspondence. If discrepancies arise, it may indicate you are dealing with a trader. If the visit confirms the supplier is a manufacturer, consider asking a different sales representative to handle your inquiries to avoid potential conflicts of interest.
Steps to Verify Through a Physical Visit:
1. **Plan and Schedule the Visit**:
– Inform the supplier in advance about your visit and the areas you wish to inspect. Ensure you visit during working hours to see the factory in operation.
2. **Verify the Address**:
– Confirm that the address provided is indeed the manufacturing location. Check the signage and ask locals if necessary.
3. **Inspect the Facilities**:
– Look for manufacturing equipment, raw materials, and production lines. A genuine manufacturer will have substantial infrastructure in place.
4. **Meet Key Personnel**:
– Request to meet the owner or head of sales. Verify their credentials and compare their contact information with what you have been using.
5. **Compare Email Addresses and Contact Information**:
– Ensure that the email addresses and other contact information match the official company details. Discrepancies may indicate that you are dealing with a trader.
6. **Request Additional Support**:
– Ask for a new sales representative to manage your account, ensuring that the person you have been dealing with is not a middleman.