How to check a factory before you order

Most of the serious problems in importing from China are not born in production. They are born in the choice of who produces. A factory picked without checking can deliver an excellent first order and fail on the second, or deliver a sound product two months late and ruin the season. Checking in advance is not bureaucracy — it is the only thing that meaningfully reduces that risk.

Here is what to check, in order, and what each stage is meant to rule out.

The first question: manufacturer or trading company

A great many trading companies in China present themselves as manufacturers. They are not necessarily a problem — sometimes they are the only way to buy in a small quantity, and they can give good service. The problem starts when you do not know that is what you are dealing with, because then you are negotiating quality with someone who does not control the production line.

Three questions separate them quickly:

• What is your product line? A manufacturer specialises in a narrow category. Anyone offering kitchenware, toys and electronics alike is almost always a trading company.
• Can we see the production line on video, now? A manufacturer can. An intermediary will find a reason.
• What is the registered company name? A name containing import and export terms is one clue; a name containing the category and the word factory is the opposite clue. It is not conclusive, but it points somewhere.

Verifying identity and registration

Every registered business in China has a business licence with an identification number. Asking to see it is an entirely legitimate request, and a refusal is a warning sign in itself. What to check on it:

• The registered company name, and whether it matches the name the quote reaches you from.
• The registered scope of business — whether it covers manufacturing what you are ordering.
• The year of registration. A company registered two months ago is not automatically disqualified, but it calls for a different kind of caution.
• A match between the company name and the name on the bank account you are asked to transfer money to. A gap here is an absolute stop.

Export experience

A factory that exports to Western markets has already been through the learning curve of export packing, documentation and standards. A factory selling only to the domestic Chinese market may be excellent, but you will be the one teaching it. Ask who it exports to, to which countries, and for how long.

Whether the line fits the product

This is the part that is easiest to miss. A factory can be real, registered and experienced — and simply wrong for your product. A factory producing a million units a month will not give an order of a thousand any attention, and a small workshop producing by hand will not deliver an order of a hundred thousand.

• What its minimum quantity is, and what the typical run it operates is.
• What machinery it has, and whether your product is made on it or will need a subcontractor.
• Whether it has already produced something similar, and whether that can be seen.

What to look at on the visit itself

A physical visit — yours or by someone representing you — shows things that no conversation brings out. What to look at:

1. Whether the address really is a factory, and whether its size matches what was said.
2. Order and cleanliness on the line. A chaotic line produces inconsistent products, almost always.
3. The condition of the machinery: new, maintained, or old and improvised.
4. What happens to units that fail inspection — whether there is a process, or whether they go back on the pile.
5. Whether there is internal quality control, and how it is documented.
6. Working conditions. Beyond the human question, a factory with high staff turnover produces unstable quality.

The conduct test

Before ordering, it is worth noticing how the factory deals with you. It is a good indicator of what will happen when there is a real problem.

• How quickly it answers, and what happens when you ask a hard technical question.
• Whether it says no when you ask for something impossible, or agrees to everything and evades later. A factory that agrees to every demand without qualification is a warning sign, not a good one.
• Whether it explains what it cannot do, or only what it can.
• How it reacts to a request for quality conditions in the agreement.

And if you cannot get there

Checking remotely does not replace a visit, but it is far better than nothing. You can ask for a live video call from the line — not a recorded clip — and ask them to move the camera where you want it. You can ask for photographs of specific processes. And you can, and should, send someone local to visit on your behalf.