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Don’t Get Scammed: 5 Tips to Do Due Diligence When Evaluating a Product Assembly Company in China

Outsourcing your product assembly project to China can help reduce your total cost, giving your business a huge advantage. But that doesn’t mean you can choose any type of assembly company and expect a positive result. Making sure that you evaluate and select the right assembler is the only way to get a high-quality, hassle-free experience.

With so many options out there, it can be difficult to know whom to trust. That’s why it’s so important to do due diligence to ensure you don’t get scammed before hiring a product assembly company in China.

In this comprehensive guide, we list 5 useful tips for evaluating a product assembly company before committing to its services. Keep reading to make sure you make the right decision for your business.

1. Check Their Website and Social Presence

When you’re evaluating a Chinese product assembly company, it’s essential to check its website and social presence. Take the time to look at their accounts and make sure they have an active presence.

To reach their target audience, many Chinese enterprises that serve Western clients should have a presence on popular platforms like LinkedIn, Medium, Instagram, Quora, and Facebook. Take a look at their profile to see their activity and engagement such as how often they post, if their employees’ comment, and how much engagement they receive from followers. This can give you an idea of how reliable the company is and if they are up to date with their industry.

Additionally, analyzing the content and customer comments can give you further insight into whether the company aligns with its brand values and mission statement or not. High-quality and consistent content is a good sign that the company takes its social media presence seriously.

2. Monitor Their Reputation

When checking the assembler’s social presence, you can also search for its reputation in the industry to see what kind of reviews and news they have online.

One of the easiest ways to do so is by using search engines and social media monitoring tools to track mentions of the company’s name, products, or services. You can learn if the company has attended any international or regional trade shows or conferences and see how’s the feedback from other attendants. This can give you insights into how the company is perceived by its customers and industry peers. You can read reviews on third-party review sites for additional information about the company. Look for feedback from other buyers and customers who have used the company’s services in the past.

Also, you should take the time to explore any negative news to avoid any negative publicity or issues that the company is facing. To ensure a more thorough analysis, it can be helpful to include specific keywords such as “scam”, “fraud”, “IP leakage”, and “thief” when conducting the search.

3. Verify Their Legal Status

Many Western clients suffer from trading troubles and dispute losses because they fail to verify a Chinese business. To avoid becoming a victim of a scam, you should take further steps by verifying their business information after checking their social presence.

Every legitimate company in China should be registered and have a business license to make sure they are able to operate legally. In this case, you can request a copy of the business license from the assembler. Read the details and pay attention to

  • Company name
  • Registration status
  • Registration number
  • Registered address
  • Directors’ names
  • Shareholders’ names

Ensure the above information is the same as what they show on their website. You can also use map software to verify their HQ address and cross-check their phone number and email address. If any of their information is incorrect or they don’t have a physical address, it’s best to avoid doing business with them.

If you don’t have the time or resources to verify a company’s business license or other relevant documentation on your own, you can use a third-party verification service. These services typically charge a fee, but they can provide you with a detailed report on the company’s license and registration status, as well as other information such as financial records and legal history.

4. Conduct a Visit to Their Assembly Facility

Before you commit to a product assembly company in China, make sure the product assembler has the necessary facilities for your product.

You can ask the following questions to see if the facility can meet your requirements:

  • Is the facility equipped to handle the assembly of your product at this time?
  • Does the facility have modern, well-maintained equipment?
  • Are their employees trained to handle your product in accordance with industry standards?
  • Are their safety protocols up to date?
  • Has the company previously worked with international businesses?
  • Are they proficient in English, enabling them to communicate with ease?

If possible, conducting a site visit to the company’s physical location and its assembly facility in person can be a good idea to learn more about the company. Make sure to observe how product assembly lines and operations are conducted.

5. Make Sure they Will Protect Your IP

When evaluating a product assembly company in China, don’t forget to ensure that they will safeguard your intellectual property (IP), especially when your IP is the most valuable asset for your company.

Ask the product assembler for their IP protection strategies and ensure they have adequate policies in place to avoid IP infringement. These policies should include detailed NNN agreements and any other relevant agreements.

What’s more, make sure they have established proper security systems within their facility such as security cameras, restricted access to manufacturing and assembly areas, and secure storage facilities to protect your IP.

Secure your Product Assembly Project with Shield Works

Dealing with factories to assemble your products in China can be tricky. Protect yourself and your investments by taking precautions as above can help you take the advantage of the low cost while using the outsourcing services safely.

However, it could be a  time-consuming process to perform a full background check by yourself. That’s why many American and European companies feel more comfortable working with a western-owned and operated product assembly supplier in China. This is because they think that a company with a western management background and Chinese experience has higher standards and more positive reactions, so they don’t need to worry about being scammed and defective products.

If you’re looking for a company that has all your security needs covered, Shield Works can get you covered. We are a British-owned and managed company that specializes in the high-quality and competitive rate of contract manufacturing and product assembly services. Over time, we have developed full IP protective methods at our custom manufacturing and precision assembly facility that has proven 100% effective at preventing IP infringements.

You deserve to enjoy the peace of mind that comes from knowing what you are making and whom you are working with. Start your journey by connecting with us today for more information and see how we can fulfill your product assembly requirements.