Our Secret List of Really Bad Manufacturers Around the World

1. We have no such list. Sorry.

Pretty much every week, someone writes one of our international manufacturing lawyers to:

a. Ask about a particular overseas manufacturer;

b. Complain about a particular manufacturer and to ask us to tell our blog readers about this company or report them to such and such government or embassy or to ask; and/or

c. Ask us whether we have or know of a list that ranks manufacturers on their trustworthiness/reliability/quality;

d. Ask if they buy “through” Alibaba whether they will “be protected.”

2. Foreign Company Due Diligence

Our standard response to those seeking information about a particular manufacturer is to note that there are hundreds of thousands of contract manufacturers around the world and our international lawyers have worked with just a small sliver of those. We can though determine the reputation and the financial wherewithal of XYZ company by conducting due diligence on them, which is something recommend be done on any foreign company before you send it money. We virtually always charge $1500 for this service and I estimate that it has saved companies literally hundreds of millions of dollars over the years. In fact, in one instance a few years ago, we emphatically told a due diligence client NOT to buy products from a particular Chinese manufacturer and literally a week later a company wrote us to see whether we could help them recover more than a million dollars it had sent that company a six months prior, without ever getting any product.

3. Reporting Bad Foreign Manufacturers

Our standard response to the request that we report bad suppliers/manufacturers on this blog is that we do not list problem manufacturers (or great manufacturers) because we have no good and fast way to determine that what one person tells us about a particular manufacturer is accurate or not. To be blunt, much of the time when product buyers have problems with their overseas manufacturer, the fault does not lie solely with the manufacturer. As far as us reporting X manufacturer to Y government or Y embassy, that virtually never has any impact and so we would not feel right charging anyone for us to do that, but there is, of course, nothing stopping you from doing that.

3. Foreign Manufacturer Lists

Our standard response to whether we have or know about a list that ranks manufacturers on their trustworthiness/reliability/quality is that we have no such list nor are we aware of any such list that we deem worth a recommendation.

4. Alibaba’s Protections SUCK 

My standard response on whether buying “through” Alibaba will “protect” them is that it will not Alibaba has been and will always be borderline worthless. We get calls just about every week from someone seeking help with a manufactur they found on that has sent them either bad product or no product at all and Alibaba is refusing to provide them with any compensation. Truth is that YOUR contract with Alibaba has been drafted by Alibaba’s excellent lawyers to protect Alibaba, not YOU.

Finding the right manufacturer overseas is not easy and, if anything it is getting more difficult because it typically involves more countries than previously.  Whereas five years ago, 90 percent of our clients were looking exclusively at China, with a few looking at South Korea, Taiwan, Thailand, Vietnam, Cambodia or Mexico, these days, our clients are split about 50-50 between China and the rest of the world and a whole host of new countries, like India, Malaysia, Colombia, Peru, and Poland have been added to the mix.

Whenever I speak about how to protect yourself when doing your manufacturing in a foreign country, I talk about the following as the three keys:

a. Good partner. Choose a good supplier, and the right supplier for you.

b. Good contracts. Your contracts should be enforceable in the relevant country and they should protect you from key risks, such as IP theft, bad product or late deliveries.

c. Good IP registrations. Trademarks, copyrights, patents, and/or trade secrets.

I sometimes add a fourth: good quality control/good monitoring.

There are no shortcuts.

And there is no list.