As a European company in the automotive or machinery industry, there are many elements to keep in mind when you are sourcing in China: price, quality, the delivery time of the products etc. After the project is launched, there is also a series of contract documents that need to be signed with the supplier. The contract documents are the most critical part of the entire project. Once the contract is in effect, it is legally valid and binding, so the purchasing contract should be carefully reviewed before it is signed. In this article, we will share with you some considerations when signing contracts with a supplier in China.

Finally, after three years of uncertainty caused by COVID-19, a new phase full of hope and new opportunities has begun: we will continue to help more customers find suitable suppliers in China.

Supplier selection is one of the most important activities performed in today's business environment. Making a wrong decision in this field can result in operational and financial problems for the company. Based on previous experiences, sourcing experts already know that selecting a supplier from the lowest bid is not ideal, as lower prices usually hide lower qualities. From this perspective, the Total Cost of Ownership (TCO) concept is a reliable tool for successful supplier selection. In general, TCO is a calculation intended to highlight the difference between the short-term purchase price and long-term cost that occur during the entire life cycle of the item in the organization. Such analysis can also help to make critical make vs. buy/outsource comparisons.

As a company, sourcing goods from China can go like this: - Chinese suppliers have presented you with perfect samples, so-called "golden samples", but in mass production, the quality of the final product is suddenly significantly lower - You are offered low-cost production processes, but in the end the total cost surprises you