DECISION 3 HACKED ALL INSPECTORS PROFESSIONAL
Professional third-party inspection to verify the goods before payment and ensure they meet your standards is one way to protect yourself from this. After you make the payment, the factory ships an order riddled with faulty products or even scrap material.
DECISION 3 HACKED ALL INSPECTORS FULL
The factory offers you a discount in exchange for full payment before shipment. Scenario 2: Shipping a non-conforming product after full payment The factory shuts down soon thereafter and owners walk away with your deposit. In this scenario, the factory collects your deposit but never produces anything. A common deposit amount among Chinese factories is 30 percent of the total order price-a factory owner wanting to scam a buyer may charge up to 50 percent. But to get the discount, you must pay an increased deposit amount. Lawyers at Harris Bricken law firm have noticed three scam patterns evolving around factory closures: Scenario 1: Demanding a deposit and failing to deliver any goodsĪ factory may offer to sell their product at a heavily discounted rate. In this scenario, foreign buyers are that group. And Chinese police tend to overlook crimes against foreign buyers.Ī factory owner planning a scam will likely target individuals with the least risk of repercussions. According to the author of this article, it’s less risky for factory owners to cheat foreign buyers than Chinese nationals.Įmbassies have limited power in these scenarios. There is considerable legal risk in scamming a Chinese entity. Setting up deals and bringing in as much cash as possible can help owners avoid bankruptcy.Ĭould the growing economic stress push Chinese factory owners to indulge in fraudulent behavior? Why Chinese factories tend to target foreigners, rather than Chinese nationals But, according to the author of this featured article, the decline could lead to a wave of plant closures and bankruptcies throughout China’s SME manufacturing sector.Ī factory facing imminent closure will often work to make a final score. It’s unlikely the declining BCI will impact large enterprises. The Business Confidence Index (BCI) for this sector is at its lowest level since the 2008 financial crisis. Beware of these 3 Chinese factory scams in coming monthsĮconomic stress on Chinese small to medium enterprises (SMEs) is growing. garment production and emotion's influence on success in this week's roundup.Įach Sunday, we publish a list of top articles and other content related to manufacturing in areas like quality control, product development, supply chain management, sourcing, auditing and law. Factory scams, major trade war decisions, cybersecurity threats, U.S.
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