A Sourcing Road Trip in China The DIY Way Not Good

Download this podcast
Length 11:02
Download audio file (20110223_sourcing_alibaba.mp3)

Three years ago, while in China, we were on the road with a client to source and manufacture high-end eyeglass frames. My project manager had pre-screened about twenty factories which we vetted and produced a list of ten sites for further evaluation and site visits.

I arrived in Wenzhou with the client for the first leg of the tour. Things were going well in terms of finding the right supplier. Some top of the line factories with just the right products and pricing. We had two agreements by the end of day two.

On day three my client insisted that we go visit a factory he found on the China suppliers directory website Alibaba.com After finding a potential supplier on his own, the client claimed their website looked great, they had dozens of styles to choose from, they stated they could do any kind of custom work etc, etc. I explained to my client that in my years of experience, it was unlikely we would find anything of value in such a visit and that without prescreening and vetting it might be a waste of time. But, he insisted, so I, realizing sometimes the best lesson is the one you learn first-hand, relented.

We drove almost 90 minutes off of our scheduled route. After getting lost several times we finally found the entrance to the factory.It was mid-August, about 90 degrees with 90 percent humidity. Dust was blowing everywhere and garbage was piled high all around the building.

We walked in the front door and found some curious workers on the floor. Namely, pigs, chickens and roosters. We were led up the stairs to the 2nd floor workshop where we found three people putting frames together. It turns out they were pieceworkers hired by another factory.

Politeness is a way of life in China, reg! ardless of the time it may take. While drinking tea our conversation confirmed what our eyes were seeing much earlier in this journey. Then we left.

Sinking into the back seat of the car, and after a deep sigh, my client simply said, Im sorry. Lesson learned and a better one I could not have stated as convincingly as half-a-days out of the way journey.

This is one of the more benign things that can happen to a company looking to source and manufacture goods from Alibaba.com or without a disciplined vetting process. It is therefore not surprising that recent news reports about the resignation of two top executives from Alibaba recently due to unfettered fraud on the website.

In the summer of 2005 we also visited a factory from Alibaba that a client insisted we see. It turns out it was a shell company that was supposedly manufacturing pet supplies. First words out of their mouth I dont think we can do business because our company is banned in the US for parts related to weapons of mass destruction. In that case, we thought better to skip the tea.

These stories and literally dozens of other I could recount illustrates what I have been telling individuals, start-ups, SMEs and even a few Fortune 1000 companies for six years. You can window shop on Alibaba to get a sense of pricing and product categories, but for anything else you need a plan for opportunistic through strategic sourcing, a sourcing professional and a presence on the ground in China to execute a multi-phase evaluation and vetting project.