Why would a supplier refuse visits?
There are reasons why they might not want visitors on-site and your sales contact should be able to confirm this. Requesting a payment first is a good way to get money out of you and provides security to the supplier, but you may not be ready or willing to do that, especially if you’re, say, auditing a potential supplier before placing an order.
This type of refusal usually happens in the following 7 situations. Let’s explore each and some tips for getting around it:
1. They have highly proprietary processes
It’s possible that they have confidential processes that they don’t want just anyone to see in case they copy them.
How to get around this?
In that case, instead of refusing outright, they could mention that we cannot take photos of a certain process, or we could avoid going to a certain area. But we can probably still visit their warehouse, see their incoming inspections and outgoing inspections, talk with their quality and purchasing staff, look at some of their non-proprietary production processes, and ask questions related to quality management in general (not the sensitive process itself). This is not common with factories under 2,000 people in China.
2. You’re actually working with a trading company
You are dealing with a trading company that claims to be the manufacturer and they are afraid you might deal directly with the real factory instead of them (you’d actually probably get a lower price because you wouldn’t be paying extra margin to a ‘middleman’). This is, in many cases, the real reason.
How to get around this?
If you sign a non-circumvention agreement with them, they might let you go in as this protects them from you working with the supplier. But chances are, they don’t even want you to suspect they are “just a middleman”.
3. They haven’t seen a clear intent from your side to engage in a business transaction
If you’re a new customer the supplier may be reluctant to open up their facility and spend time with you or your auditor because they are afraid you are just a “tyre kicker”.
How to get around this?
It will usually be sufficient to issue a PO to them and show that you represent an established company.
4, Your order quantity is low
The order quantity you mentioned to them is very small in their eyes, and their motivation is low.
How to get around this?
There is not much you can do in that case. They might also still refuse some audits or inspections after they get a payment, so keep that in mind… There is nothing wrong with a smaller order quantity, so perhaps you might prefer to source a supplier that is more interested in orders of your size.
5. The words “audit” or “evaluation” scare them
They are afraid because they saw the word “audit” or “evaluation”.
How to get around this?
Instead of the more daunting words above, instead, mention that you’d like to “visit” them. We offer a service that is essentially gathering the same information as a quality system audit, but it’s simply called a “factory visit”.
6. They have too many customers
It’s probably a nice situation for businesses to be in, but it does impact their service levels for some customers at times. Oftentimes, if they have many more than they can serve, they simply serve the buyers that place the largest orders and are easier to deal with. (This was the case with the face masks, nitrile gloves, etc. in 2020 as Covid hit, but it is really not common.)
How to get around this?
Again, it’s about sourcing the right fit supplier for your needs. For example, during the sourcing process, you need to know when a potential supplier has its peak season or not. This will help you to order at times when they are less likely to be struggling under the weight of orders. Also, you’ll be able to work with a supplier who has the capacity to handle your orders, and that can usually be found out during a site visit where the auditor can see their production processes, equipment, and capacity.
7. They are testing you
They feel you are a first-time importer and you are quite uncertain about the way to deal with overseas suppliers, so they are testing you.
How to get around this?
You need to show them you have a process for qualifying suppliers and for managing your orders and that they will have to comply with your process. Faced with a ‘professional buyer’ they are more likely to back down and show more ‘respect’ that you’re an experienced operator (even if you’re still new to sourcing).
The payment matters
It’s common for Chinese and other Asian suppliers to request payment upfront before starting work, but how much you pay may either put you at a disadvantage or keep you in control of the project.
If a supplier expects to receive the full payment upfront” this is NOT advised. They will have no incentive to do a good job, to ship on time, etc. once you have sent the payment. Many of our clients have run into severe issues in the past when doing that.
Negotiating payment terms is important. Start by aiming for at least a 30/70 split, where you pay a ‘deposit’ payment of 30% and then the remaining 70% after the goods have passed a final QC inspection and are ready to ship.
You can see how this payment term works in this post.
Is an on-site visit always necessary?
If you feel that your supplier is shutting you out for some reason you need to have a discussion with your sales contact and understand the situation. If it corresponds to one of the above 7 reasons, you can make a plan of action.
If all else fails, you can still gain a lot of necessary information remotely…
Our supply chain management and QA teams have been performing hybrid work for Sofeast clients for a while: a combination of off-site and on-site work in order to source and audit/inspect suppliers.
This was accelerated by Covid as, in China especially, many suppliers shuttered their doors to outside visitors leaving buyers to either accept whatever they said and did (dangerous to accept an order without at least inspecting it, right?) or to investigate remotely which was still possible.
Remote solutions from Sofeast that give control back to you
The good news is, that there is plenty of helpful information you can gather without going on site. We have a number of solutions here for that purpose:
- Our Legal Records Check service is useful for initial screening and can alert you to any issues with a possible supplier, such as past court judgements or financial problems.
- The Certificates & Reports Verificationis also helpful for remotely checking supplier certificates & reports to verify that they have passed your required standards.
- Remote Audits are a quick and convenient method of assessing current suppliers and following up on corrective actions.
- A remote inspection can be done via video and is an excellent halfway house that helps you have good visibility over product quality.
These tend to be a bit lower cost and provide faster results than their on-site cousins, but, of course, the information won’t always be as detailed as that gained by a walk around the factory. That’s why we suggest taking a hybrid approach and performing both on-site and remote activities to reach your objectives.
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Have you been blocked from visiting a supplier’s factory before you’ve paid anything? What reason did they give and how did you get around it? Let me know by commenting or contacting us. I’m also here to help if you’re affected by a similar issue.
Are you wondering how to find a manufacturer in China who is well-suited to your needs and can also deliver on their promises?
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