Gary Huang talks through his chinese factory nightmares and has three for us in this show from Brazil to Chemicals and also ROCKS…
The Chemical Chinese Factory Nightmare
This was a Brazilian client sourcing chemicals from China.
It was a powder found on Alibaba, the site looked okay and he visited it in person. He met the factory management and the production line which looked okay.
- So he advised the client it was safe to place the purchase order.
- After production was finished, they wired the money and waited, and waited and waited. And the factory was shutdown and everyone had gone!
- The money was wired to a bank account (make sure the company name on your invoice matches the supplier bank account)
- They had a 30% downpayment and 70% on the shipment
- They DID not arrange the inspection of the end product before releasing the payment
The Solar Air-Conditioner Chinese Factory Nightmare
- Another client was looking for a solar air conditioner and had chinese factory nightmares of his own
- Limited number of suppliers in China for this product
- Gary paid a visit to the factory in a district of China
- They were picked up by the Factory boss in his black Audi from the train station
The Factory Owner’s car parking space
- He drove them to the factory and dropped them off to go park his car (first red flag – if it was his factory he’d have the prime parking spot)
- The factory was big and modern, but they were manufacturing only ‘electric’ air conditioners not ‘solar’ ones that Gary was after
- Gary asked where the solar air conditioners were and was told that there was a very large order for the electric ones currently hence the production run
- He then took them to an Annex of the factory and showed them one of the solar air conditioners that the factory sells and they had sent the quotation for
- The pieces of the puzzle did not add up for Gary, he needed to really see:
- See the production line
- The raw materials of the solar collectors
- Gotta see people assembling these
Red Flag 2 – Staff did not Acknowledge the Factory Boss
- The last red flag was when they went into the office and then walked through the factory
- No-one acknowledged the ‘factory’ boss as he walked through the factory – a major red flag
Red Flag 3 – The Showroom was 90% a Different Product from Mine
- The showroom was showing 90% electric air conditioners with only one solar version
- This led Gary to understand that this was not the Factory Owner but a middle-man
The Rocks Chinese Factory Nightmare
- The container of rocks
- You have to do your proper due diligence on your order
- They sent the payment after ONLY weighing the container before it was loaded on the ship
- It arrived and they had paid for a container of ……… ROCKS!
- This has happened in the past and will doubtless happen again
- You MUST do an inspection before releasing payment or you could end up with a container full of rocks