Whilst the majority of ODM business is related to exporting from China, we also assist a number of clients who are looking to sell their products into China. One particular scam came up again recently and we wanted to highlight this one.
A Chinese company expresses interest in buying your product and will invite you to meet them in China to sign a contract. They advise that a face to face meeting is very important for them in order to build long term relationships. Given the size of the Chinese market the sales manager of the overseas company decides it is worth the expense to visit this potential client.
Once in China the main contact for the sale/scam talks up the sale but generally wastes time. Once the sales looks as if it is being finalised they drop a bombshell. In order to conclude the sale and get the contract signed a small bribe needs to be paid to the CEO / CFO. After spending all this time and money you are so close to the sale it really is a let-down. At this stage the seller has 2 options.
- Walk away from this business. You loose a few days of your time and travel expenses for flights/hotels etc… in China. Due to the sunk costs of this trip many legitimate buyers are drawn into the scam. Walk away !
- You may pay the bribe and believe there is a chance to get this big contract. Upon payment of the bribe a sales contract is signed and the buyer disappears.
ODM has helped buyers in the past by calling up the potential buyers in Chinese language and arranging to meet the buyers – acting as an Rep. in China. We have also conducted internet searches in Chinese and can identify other potential customers in case this first sale does not work out to maximise value of trip.
Given the fact that ODM Shanghai has a mix of local and expat staff (and are more likely to take factories to court) most scammers will refuse or at least stall the meeting. Legitimate companies should not be phased by a local company helping you out. We offer this service as a part of our overall Quality Control business.
- China Domain Scams (life.firelace.com)
- Five Rules For Negotiating Your China Deal. (chinalawblog.com)