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25 Jul 2011
Click to read Part 1 of this article
Tip 4: Check the email address and email usage
I often used email address and email usage as a supplementary method to screen suppliers or business partners when sourcing in China.
If we have choices, we will choose suppliers that have a company email address over suppliers that use a free public email account to communicate with us, such as steven@163.com, steven@sohu.com, steven@hotmail.com.
Email service providers like sohu, 163 and sina have paid services as well, so you can find some suppliers will use email address like steven@vip.sina.com. That is better than a free email account but still not as professional as steven@chinawhy.net
We can generally tell the suppliers size and experience judging by the email address they use.
Suppliers with many years export experience normally care very much about their company image, so they will use an email account associated with their website domain. Small and new factories normally use free email accounts. Factory owners normally don’t have high education background, so at the beginning of their startup stages, they normally don't recognize the importance of email address and usage.
As for email usage, established suppliers will use third party email programs like Outlook to manage emails, so buyers' email will be replied to in a timely manner. They also know how to add a signature properly. With inexperienced companies you may wait for days to get replies, or they never use a signature properly, or they don’t use email subject line, and so on.
Some suppliers in China use email addresses like steven@mail.hz.zj.cn. This suggests the company has been around for a long time. In this case, hz stand for Hangzhou city, ZJ stand for Zhejiang province, CN stand for China. So if your supplier is from Shandong, Qingdao, they may use steven@mail.qd.sd.cn. Established companies will use email addresses like this in China.
Tip 5: Check the company address
I often use the company address to tell if a supplier is a factory or a trading company. 99% of factories are located either in rural areas or in the development zone, so if their addresses have village, Town, Development Zone, these are all good signs. However, if it says building in the address only, then they are trading companies.
We have stressed the risk dealing with Hongkong offshore companies. If a company is registered in Hongkong, but their operation address is in mainland China only, such as Shenzhen, Guangzhou, then it is an offshore company.
Tip 6: Call the phone number
The phone number also reveals hidden information about a supplier. For example, big companies will have a lot of extensions, so for small buyers, maybe it would be easier to deal with a supplier of your size.
Some companies use same the phone number and fax number. I would suggest buyers stay away from them, as they are not even willing to set up 2 lines, one for telephone and one for fax. In extreme case, some “companies” only use mobile phone as contact information, no landline, no fax. In both cases, you often find the “companies” are not companies at all, but individuals.
If you have the phone numbers of your suppliers, try to call the number a few times to see if you can find your contact there. Many scammers use fake phone numbers and they assume you won’t call them.
There are many other methods and tips you could use to do due diligence in China. Please share your tips below.
About the author
Steven Chow, has more than 10 years working experience in factories, trading and sourcing companies. He is the founder of Chinawhy, which offers sourcing, verification, QC and other trade-related service in China. Steven Chow is a columnist for Alrroya Newspaper, Sourcer magazine.
Comments
Steven, these are good insider tips. Thanks for sharing them. I think a lot of people don't realize how inexpensive it is to do basic due diligence on China companies. They assume it costs thousands of dollars which is simply not true (depending on the scope of the due diligence of course). You can get a basic (but useful) due diligence report for a few hundred dollars. It's worth it.
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25 Jul 2011
6 Simple Ways to Verify Chinese Suppliers (Part 2)
by Steven Chow, Chinawhy|
|
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Tip 4: Check the email address and email usage
I often used email address and email usage as a supplementary method to screen suppliers or business partners when sourcing in China.
If we have choices, we will choose suppliers that have a company email address over suppliers that use a free public email account to communicate with us, such as steven@163.com, steven@sohu.com, steven@hotmail.com.
Email service providers like sohu, 163 and sina have paid services as well, so you can find some suppliers will use email address like steven@vip.sina.com. That is better than a free email account but still not as professional as steven@chinawhy.net
We can generally tell the suppliers size and experience judging by the email address they use.
Suppliers with many years export experience normally care very much about their company image, so they will use an email account associated with their website domain. Small and new factories normally use free email accounts. Factory owners normally don’t have high education background, so at the beginning of their startup stages, they normally don't recognize the importance of email address and usage.
As for email usage, established suppliers will use third party email programs like Outlook to manage emails, so buyers' email will be replied to in a timely manner. They also know how to add a signature properly. With inexperienced companies you may wait for days to get replies, or they never use a signature properly, or they don’t use email subject line, and so on.
Some suppliers in China use email addresses like steven@mail.hz.zj.cn. This suggests the company has been around for a long time. In this case, hz stand for Hangzhou city, ZJ stand for Zhejiang province, CN stand for China. So if your supplier is from Shandong, Qingdao, they may use steven@mail.qd.sd.cn. Established companies will use email addresses like this in China.
Tip 5: Check the company address
I often use the company address to tell if a supplier is a factory or a trading company. 99% of factories are located either in rural areas or in the development zone, so if their addresses have village, Town, Development Zone, these are all good signs. However, if it says building in the address only, then they are trading companies.
We have stressed the risk dealing with Hongkong offshore companies. If a company is registered in Hongkong, but their operation address is in mainland China only, such as Shenzhen, Guangzhou, then it is an offshore company.
Tip 6: Call the phone number
The phone number also reveals hidden information about a supplier. For example, big companies will have a lot of extensions, so for small buyers, maybe it would be easier to deal with a supplier of your size.
Some companies use same the phone number and fax number. I would suggest buyers stay away from them, as they are not even willing to set up 2 lines, one for telephone and one for fax. In extreme case, some “companies” only use mobile phone as contact information, no landline, no fax. In both cases, you often find the “companies” are not companies at all, but individuals.
If you have the phone numbers of your suppliers, try to call the number a few times to see if you can find your contact there. Many scammers use fake phone numbers and they assume you won’t call them.
There are many other methods and tips you could use to do due diligence in China. Please share your tips below.
About the author
Steven Chow, has more than 10 years working experience in factories, trading and sourcing companies. He is the founder of Chinawhy, which offers sourcing, verification, QC and other trade-related service in China. Steven Chow is a columnist for Alrroya Newspaper, Sourcer magazine.
Comments 
Tim Johnson | posted over 1 year ago
Steven, these are good insider tips. Thanks for sharing them. I think a lot of people don't realize how inexpensive it is to do basic due diligence on China companies. They assume it costs thousands of dollars which is simply not true (depending on the scope of the due diligence of course). You can get a basic (but useful) due diligence report for a few hundred dollars. It's worth it.
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