As China’s economy has grown and wages increased, so have workers’ job expectations throughout the country. This has led to a much higher rate of job mobility, as Chinese are finding it easier to leave their jobs for better opportunities, either with more pay or closer to home.
These days it is not unusual to have been working with a supplier for a long time only to find that one day your contact at the company never came back from a holiday. This can leave you in a situation where you are now working with a factory at which no one is familiar with your company or your current project. Even worse is when this happens after you have made payments for your order.
Unfortunately, beyond making multiple contacts at a factory, which in-and-of-itself is not foolproof, there is not much you can do to avoid this situation from happening. However, there are strategies you can execute for your China sourcing project to help avoid losses or delays.
Protect Yourself From The Start
To avoid any financial losses, make sure to have the sales manager’s signature as well as the company’s stamp from the very beginning when you are signing the contract. No matter how familiar you are with the factory, the salesperson’s signature on the contract is not enough. Furthermore, the bank account provided on the contract should come from the company and the name on the bank account should be the same as the one associated with the company's account. You absolutely do not want to assume the risk of dealing with a personal bank account which legally ties you to the individual rather than the legally registered business entity. It’s much more difficult for a factory to disappear than for an individual to (though not unheard of).
Get In Touch With Management
There is a saying in Chinese: 擒贼先擒王, (qin zei xian qin wang), or “To catch a thief, you first have to catch his leader”. Not that we are accusing anyone of being a thief here, but the idea is that when your contact disappears, you should locate the supervisor of that person immediately. Identify the sales manager or any other relevant senior management staff and communicate directly with him/her regarding your project. Make sure they fully understand your project and status to allow for a more seamless transition.
Identify Your Team
Find out immediately who else had been involved in your project(s) from all possible departments including sourcing, quality control, engineering and accounting. Make sure to get the contact info of those in the departments still working on your project. We suggest having your sourcing agent or at the very least a bilingual Chinese local to help you communicate with these staff members to avoid language barriers and improve response times.
The key with the above suggestions is to make sure that your only connection with your supplier is not through a single individual, both with regards to communication and to legal and financial liabilities. Even if you feel relatively confident about the relationship you have with your supplier and your contact at the factory, beware captive buyer’s syndrome and make sure you have all your bases covered.
Have you ever experienced a disappearing factory contact? How did you deal with it and were you sufficiently protected to avoid losses?
- Jane Feng- CPG Sourcing Team Leader