For many Western buyers, the relationship with their Chinese suppliers begins on the factory's Web site, an exchange of e-mails or a meeting at a trade show booth. Often the factory has a sample that catches the buyer's eye and an order is placed. Other buyers have a product they want to make in China, and they award the bid to factories that can produce their product at the lowest price. But that can never equal a job done. In contrast, that is often only the beginning of the game.

One thing that frequently happens in China is that factory owners will bid extremely low — even to the point where they have no profit — just to win an order. Once they've got the business, they search for ways to cut corners so they can widen their profit margin and recover what they lost with their lowball bid. Below are three bad practices they like to resort to:

Quality fade
Years ago American government forbade lead in children’s toys. Now some Chinese suppliers switch to inexpensive cadmium. Cadmium, like lead, can hinder brain development in young children and can also cause cancer, according to latest research. This is called "quality fade" -- Chinese suppliers use inferior and cheaper ingredients to supplement more expensive materials to cut cost.

Solution: Buyers need to create an elaborate "bill of materials" -- a document that specifies what kind of materials must be used in the product. A furniture maker might specify the type of foam used in a chair's padding and what size nail will be used. The more experienced buyers will create an elaborate, highly technical bill of materials that is signed by both sides.

It’s going to be over-time
China is not Wal-Mart or Home Depot or Target or Costco. You can’t just walk in and buy 5 or 500,000 pieces in the same amount of time. Even if the contract says the lead-time is 45 days, that does NOT mean that you’ll have product in your warehouse with in 7 weeks. Just because they’ve “done it before” doesn’t mean that your production run will not have issues. Many factors can change the time needed to create a new product (or even do re-orders), like holidays, raw materials mistakes, power outages, people problems, transportation issues and bad weather. Yes, you tolerate no excuses. But you have to be more realistic working here. With the cheaper prices comes more need for management.
Solution: If they promise you the lead-time is 100 days, plan that you get the products in 125 days, so you have margin for any delays. And in the production process, check periodically with your suppliers by phone and ask them to send online to you pictures or videos of unfinished products to know what stage the production is in.

First win your trust, then cheat
In China's business environment, even suppliers that have had a long and reliable relationship with you can't always be trusted. In your first deal with your Chinese supplier, you checked it all out and thought this supplier was great. And the next time you only have a look at several batches of your whole order.

Afterwards, you don’t bother to perform quality checks. Then you began to have trouble. Those suppliers are the ones you really need to watch because once they think they have your confidence, that's when they start slipping little things in, little by little.

Solution: Every single batch has to be checked. Remember when you cut out a lot of fat in the pricing you need more QCs.