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Really Bad China Manufacturing Companies: Our Secret List Revealed

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Contract manufacturing listHere’s the reveal: We have no such list.

Pretty much every week, someone writes one of our manufacturing lawyers about the following:

  1. To ask about a particular overseas manufacturer;
  2. To complain about a particular manufacturer and to ask us to tell our blog readers about this company or report them to such and such government or embassy or to ask; and/or
  3. To ask us whether we have or know of a list that ranks manufacturers on their trustworthiness/reliability/quality;
  4. To ask if they buy “through” Alibaba whether they will “be protected.”

1. Our standard response to those seeking information about a particular manufacturer is as follows.

There are hundreds of thousands of contract manufacturers around the world and our international lawyers have worked with just a small sliver of those and we are not familiar with _____ company. We can though help you determine the reputation and the financial wherewithal of _____ company. See Basic China Due Diligence. Is This Chinese Company Legitimate? and China Partner Due Diligence. The fees for this very much depend on the depth of our investigation, which can range from just making sure the company actually exists and is licensed to manufacture the products you want it to make for you, to full-on credit reports and even talking with its vendors and customers. In turn, the scope and depth of the due diligence that will make sense for you will depend on the monetary and IP risks you will be taking by doing business with this particular company.

2. Our standard response to the request that we report bad suppliers on this blog or some embassy or to some government is as follows:

We do not list problem manufacturers (or great manufacturers) on our blog because we have no good and fast way to determine that what one person tells us about a particular manufacturer is accurate or not. To be blunt, much of the time when product buyers have problems with their overseas manufacturer, the fault does not lie solely with the manufacturer. As far as us reporting X manufacturer to Y government or Y embassy, that virtually never has any impact and so we would not feel right charging anyone for us to do that, but there is, of course, nothing stopping you for doing that.

3. Our standard response to whether we have or know about a list that ranks manufacturers on their trustworthiness/reliability/quality is that we have no such list nor is there any such list we recommend. I then usually suggest that if they do not deem it worthwhile to spend money for due diligence on their potential suppliers they should at least do a Google search on them.

4. My standard response on whether buying “through” Alibaba will “protect” them is no.

Finding the right manufacturer overseas is not easy and, if anything it is getting more difficult because it typically involves more countries than in previously.  See The China-US Trade War and the Winner is….MEXICO and The US-China Future: Meet Vietnam, Thailand, Mexico, Malaysia, Turkey, and the Philippines.

A few weeks ago, I got an email from a self-described “avid” reader of this blog with the following question:

I am looking to have ______ made in either China or Thailand but I don’t have enough money to hire anyone to help me with product sourcing or even to visit the factories before I choose one. I also cannot afford any legal help for my contracts. What do you advise I do to protect myself.

My response was the following sentence: “My advice is that you wait until you have more money and, if possible, you in the meantime start out strictly domestically.” The avid reader responded with one word: “Thanks.”

Whenever I speak about how to protect yourself when doing business overseas I talk about the following as the three keys:

  1. Good partner. In other words, be sure to choose a good supplier and the right supplier for you.
  2. Good contracts. Your contracts should be enforceable and protect you from key risks, such as IP theft and bad and late product.
  3. Good IP registrations. Trademarks, copyrights and/or patents.

I sometimes add a fourth: good quality control/good monitoring.

There are no shortcuts. And there is no list. Sorry.

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.

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    • Slimey

      These are turd world countries. There is a reason they are turd world. :cool:




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