China Dole

Today TaxMama wants to talk about doing business in China.

Andrew in the Tax Parlor told us that he had a devastating experience with shoddy products he received from China. Since you have to pre-pay, or provide a letter of credit, you generally don’t get to see the quality of your order until after you have paid for the shipment and it’s gone through customs. And you have no recourse. It’s too costly to sue them from this distance.

Unfortunately, this is a common practice when dealing with production facilities in China. I don’t know why. Perhaps they think there are enough suckers born in enough minutes that they can steal from their customers and another will come along from whom they can steal again. Who knows?

Regardless of the reason, it’s a fact.

And if you’re contemplating getting anything manufactured in China – or anywhere offshore for that matter, make sure that you spell out all the specifications of the production, including the materials. Then, BE THERE before they start your production run to inspect all the materials and set-ups. And STAY THERE until your products are produced and PACKED. Be sure to check that your shipment contains your order and not sloppy knock-offs.

My friend faced a disaster like this 20 years ago. And despite having a buyer who was eager to buy everything we could produce; despite being in a position to provide generous returns on investment to all the investors – they all lost their money. Because my friend wasn’t in China during the production process.

Since then, I’ve advised clients who are dealing with China or other overseas producers to be present or to have a trusted agent present during the process. Those that have followed that advice have prospered. Greatly! Proving that you can do business in China and elsewhere – if you invest your time and patience too, not just your money.

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