A List of Chinese Manufacturers to Avoid and Why I Would (Sorta) Avoid the List

Got an email from a client the other day, sending me a link to a blog post, which in turn linked over to a “blacklist” [link no longer exists] (a word I hate and never use) of Chinese manufacturers. The client wanted to know what I thought of “such things.”  Never one to miss a blogging opportunity, I told him I’d get back to him via the blog, so here goes.

The blog post with the lists touts its lists as follows:

After years of sourcing, recording, researching and reporting, ETP has an extensive list of companies that we have identified to have been involved in and partaken in scamming their customers or mishandling their orders.

We have a database of over 3500 companies worldwide reported for fraudulent, scamming behavior and mishandling of orders. To ensure that they are not trying to contact you or are already doing business with you, simply contact us here and we can check it off this database and let you know. This is absolutely FREE, no strings.

We believe as clients and customers your faith in your supplier should be solid and all doubts cast aside. So over the last few years, we have been constantly building and updating this database, aiming to bring you the most complete blacklist available for free on the web.

Every time we have researched, performed due diligence and audited suppliers and manufacturers, they have been added to our database.

It’s not all bad! We also have an ever increasing database of factories that we have personally vetted and done business with ourselves that we know you can safely do business with. We only work with factories that adhere to international safety and quality standards, and meet our requirements for the Panda Whitelist.

Count me as skeptical. Very. And here’s why.

There are obviously good and bad Chinese product manufacturers and there are honest and dishonest Chinese product manufacturers. But there are also good and bad Western product buyers and honest and dishonest Western product buyers. Bad and/or dishonest Western product buyers might threaten to add and then add legitimately good Chinese manufacturers to a list like this, simply because they are mad at the Chinese manufacturer for not giving them the discount they thought they deserved, or whatever. I see that sort of thing all the time.

My law firm must get three requests to sue Chinese manufacturers for every one we actually take seriously. Our international dispute resolution attorneys instantly “toss” many as too small to warrant attorney time, but we also toss many because the super-angry Western (usually American) company is the one at fault. How was the Chinese company supposed to know you “needed” your product in 20 days when you do not have a contract that says this and your purchase order made no mention of that?  Do you really think your Chinese manufacturer violated your contract by simply seeking to enforce it against you even though your company is going through tough economic times?  Is your Chinese manufacturer really the one who should have known the particular requirements for product X being sold in Kansas? I could go on and on.

Just about every time we post on China manufacturing problems or scams, someone leaves a comment saying such and such Chinese manufacturing company did such and such to them. We delete all such posts because we do not think it fair for a company to be besmirched in such a way, without their having been any sort of independent assessment at all. I think the same of the above list. How does this blog verify its information? How can it?

I am not saying such a list is completely worthless, because it probably isn’t. I mean, I definitely look at product reviews on Amazon.com (though I am certain some of them are rigged) and I also oftentimes review tripadvisor.com before choosing a hotel in a strange city.  But, those sites typically have so many reviews that the over-gushers and the overly-furious ones can be discarded.  Even then though, I still use the reviews as just one factor in my choice. So I guess I am not saying one should completely ignore something like a bad manufacturers list, but I am saying it should be just one small factor in your decision on who to use for your Chinese manufacturing.

In Manufacturing Your Product In China.The Basics we recommended you first “do tons of internet research and then narrow it down to 4-5 [factories] and then fly to China and meet with those factories.” And if you are not willing to do that, we suggested you hire a sourcing company to do that for you. Incorporating a bad manufacturers list as one aspect of your “tons of internet research” would be just fine, but relying on it as the holy grail is probably not a good idea.

For our clients that will be sending large amounts of money to a Chinese company — for manufacturing or otherwise — we recommend either our law firm or they conduct at least basic due diligence investigation. China now has all sorts of quite good databases that can tell you a lot about Chinese companies. This plus a Chinese language internet search on the Chinese company is almost invariably quite inexpensive and yet incredibly valuable. If you care about the Chinese company with which you will be doing business, a basic due diligence investigation of that company is in order.

What do you think?

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