1. The law must be the last guarantee.

First of all, you need to be clear that the agreements you sign with any company or supplier in China are transnational agreements. The cost of dealing with such an Agreement is enormous, and it is basically unfavorable to non-Chinese.

So you sign a cooperation agreement with your sourcing company’s subcompany in HongKong. You need to sign with one Hongkong company which have legal relationship with your sourcing company in China mainland with the term of legal arbitration place in Hong Kong. ( Why a sourcing company must have a sub company in Hongkong ? )

Of course, if it comes to the legal settlement, which is already a very serious consequence, and there is no way for both parties to continue their cooperating business again. Then we still need to proactively take measures to prevent such trouble from occuring strategically, because this means the supply chain is broken. If you don’t have a good substitute for the business, then you will be in a dilemma.

2. Investigate the suitable manufacturers and choose a reputable one as your partner. 

First of all, research the background of companies and share composition.

Second, inquire into the background of shareholders. Check whether there are bad records, whether there is a risk of legal litigation, and whether there is a risk of capital chain rupture.

We have a series of investigation plans, you can inquire us. More in-depth interviews with management, etc.

What is the way to talk about it?

That is definitely not a one-on-one face-to-face recording on the spot. In this situation, the supplier will only give a vague answer discreetly. When you walk in the workshop with them and when you have a meal, you can ask them some questions after they relax their vigilance. These questions must contain a pile of key questions. In terms of the intellectual property issues, for example, you can’t ask them if they will sell your design to others straightforward. They must say no.

As for how to ask such kind of questions, please carefully read the following section:

18 Questions to Suppliers-How to carry out the Q & A with Chinese suppliers?

For the protection of intellectual property rights, there are two methods:

  1. The first is the open question:

Ask them what newly developed products their customers have this period. Then you say it’s old and outdated no matter what they show you and see what they say and do.

If they reject with a reason that they have signed a Non-Disclosure agreement, then you can say you are from another country, which has no impact on the original customers to see what they will do.

Take advantage of opportunities to meet suppliers on site. But all in all, you need to find an excellent and experienced translator, who can accurately convey your words to the other party and vise versa. Otherwise, the information you get is not true, which also cannot achieve your purpose.

This kind of testing needs to be carried out continuously, and problems should be handled in time.

  ❀ Monitor

Monitor the customs dataandthe goods exported by the supplier, find out your competitors. Then check if there are similar products that violate your Intellectual Property Rights. This can be achieved by visiting suppliers from time to time.

  ❀ Logo or company name on the mold

If there is a mold parton your products, you can printyour logo or company name on the mold, which has a little trick inside. But this is a technical issue, and we’re not going to talk about it here. If you develop the mold yourself, it is easier to monitor. You can get the data from the injection molding machine and you will know. But how many sourcing companies knowing injection molding machines well can you find besides us?

   ❀ Quality control and assembly 

If your product has several molds, you can considerproducing them at different factories. But this will bring another problems: quality control and how to assemble. That’s when big buyers are needed to slove the problems.