Sourcing from China? Familiarize Yourself with these Key Supplier Documents
When looking for a supplier to source products from China with, you’re going to want to know that they’re trustworthy, capable, and able to deliver on the business agreement you hope to make with them. However, with so many suppliers to choose from, and more than a few scammers hoping to make a quick profit off of the uneducated, this can be easier said than done.To find the best suppliers and sidestep the rest, start by familiarizing yourself with the characteristics and qualities of the following documents. The better your grasp of these is, the better equipped you’ll be to pinpoint the suppliers who are legitimate, qualified, and trustworthy businesses.
Documents to Know
While there are many documents and certificates Chinese companies will often display in their showrooms or on their website, the following documents are some of the ones you’re going to want to actively pursue and verify.
The Business License
The purpose of a business license in China is to prove that a company is legally registered to do business in Mainland China. As you can imagine, then, this is usually the best place to start when approaching a potential supplier for your sourcing needs, as every business in China must be registered and possess a valid business license.
Since this is China’s foundational company certificate, suppliers are used to it being requested and should have no problem in providing you with a verifiable copy. If they are resistant to providing you with a copy, however, then that’s the kind of red-flag you should make note of and probably turn your attention elsewhere.
Testing & Compliance Certificates
Testing and Compliance Certificates, like a company’s business license, are arguably the most important documents needed in order to do business in China. These include all certificates that identify products that have properly tested and confirmed to pass specific country rules and other regulatory standards required to import and sell various products.
Documents like the FDA, ANSI, UL, RoHS, CE, and Bluetooth are all considered testing and compliance certificates, and as such, are vitally important for your company to be acquainted with. Without these documents, a factory will be unable to export their products out of China, as they won’t be cleared by customs.
For example, consider you were importing Micro Derma Rollers into the US. Since this is a skin tool that will be directly touching the skin, you’ll need an FDA certificate. If you don’t have one, then the factory that manufactured the product will still sell it, China will export it, but the US won’t allow it to pass through customers, meaning that your product will be quarantined and you’ll be charged for storage and disposal.
These certificates aren’t connected to just a specific factory either, but also to the specific product a buyer intends to import. It’s also worth noting that some factories will provide in-house testing and certification for the products they manufacture, while other might express confidence in their product passing the necessary tests, but require the buyer to pay for it the test to be conducted by a third-party.
If you’re looking for a testing company who can provide you with the right certifications, then some of the largest and most common include SGS, TUV, Rheinland, and Intertek.
Foreign Trade Registration Certificate
Where a business license is necessary for a company to do business in China, a Foreign Trade Registration Certificate is necessary for a company to engage directly in any importing or exporting business. So while this one isn’t required of every Chinese company, it is a certification you’ll definitely want to inquire your supplier about.
However, it’s not necessarily mandatory that your supplier possess one. If you ask for it and the supplier says they don’t have one, then that likely means they will be using a trading company to send you the products they’re manufacturing for you. This doesn’t have to be a bad thing, but it is something you’ll want to know ahead of time.
Bank Account Certificate
Asking for a supplier’s Bank Account Certificate is a great way to avoid some of the more blatantly fraudulent suppliers and scammers. The purpose of this certificate is to secure details regarding the company's official Mainland China bank account, which will then allow you to ensure that the account you’ll be sending money to genuinely belongs to the supplier you’re working with.
There are also a plethora of protections and restrictions on licensed bank accounts in China, so you and your company’s money will be safer in the long run.
Customs Registration Certificate
While the Customs Registration Certificate can often be confused with the Foreign Trade Registration Certificate, the two documents actually perform very different purposes. Where the Foreign Trade Registration Certificate is what allows Chinese companies to engage in the import/export industry, the Customs Registration Certificate is what determines whether that company is registered to make customs declarations with Chinese customs.
If that’s confusing, don’t worry. Most major manufacturing companies have this document on-hand, and even the ones that don’t—usually smaller businesses—will use a broker to assist with the customs declaration process. In the end, this is just a good document to ask about so you’ll be informed on the size and capabilities of the supplier you’ll potentially be working with.
Since quality is always of the utmost importance, any supplier you plan on working with should possess an ISO 9001 certificate, which signifies that the organization has a quality management system that will cover the products you are having them manufacture.
Some of the common things an ISO 9001 should cover, according to ChinaCheckUp.com, include:
Measurement, analysis, and improvement
These aren’t all the documents you could feasibly be familiar with, of course, but it does get you started on the right track as you begin looking for the right supplier for your business. It’s also important to note that, like Forbes explains, just because a company is certified “does not necessarily mean that their reputation, production capability, or quality have been verified.”
So even as you go about the process of verifying documents and seeking out the best China manufacturing companies, know that those aren’t the end-all-be-all for prospective suppliers. Performing audits, asking industry peers about their supplier experiences, and generally paying attention to how a business conducts itself are all good principles to abide by.