Expert talk part 3, Dan Harris: Buy samples, cover all the bases

Have you been following our Q&As with sourcing experts and practitioners? You might have noticed a common thread, then. That is, product samples can spell the difference between a successful sourcing journey and an importing disaster.

As John Niggl put it, “Buyers who skip the product sampling stage do so at their own peril. The benefit that comes from being able to “try before you buy”—review and approve a sample before committing to an order—is simply too great.”

Gary Huang, meanwhile, underscored the importance of product samples by comparing it to an audition where you can get a glimpse of quality and capability.

For part 3, we have Dan Harris, the founder of the Harris Bricken law firm, a boutique international law firm focusing on small and medium sized businesses that operate internationally.

Dan writes ChinaLawBlog.com as a source of China legal and business information. He and his firm have been helping foreign companies, mostly American, Canadian, European and Australian, navigate China for more than 15 years. He said there’s no way to stay out of ecommerce as it’s crucial for so many of his law firm’s clients.

Global Sources (GS): What’s your take on buying product samples from China? What are the challenges?

Dan Harris (DH): As a lawyer, three things always scare me about foreign companies having a sample made by a Chinese factory:

• First, does the foreign company have an agreement (enforceable in China) that will stop the Chinese factory from copying the foreign company’s product and selling it around the world?
• Second, did the foreign company apply for a Chinese trademark before it revealed its brand name to people in China? This is critical because the first to apply in China almost always gets it, regardless of whether it was previously registered outside China.
• Third, many foreign companies just assume that if they get a good sample, they just assume the products will match the sample and if it does not, they will be legally protected. Neither of these are true, though.

GS: Do you have a story of sample orders gone wrong?

DH: We have definitely seen nightmare scenarios. The most common is when a foreign company has a Chinese company make the molds and make the sample, and then learns that the Chinese company is using the molds and selling the product.

Oftentimes when this happens (surprise, surprise), the Chinese factory is also supplying bad quality products to the foreign company. This way the Chinese company can not only sell the foreign company’s own products for less, it can sell better quality products.

GS: Despite these challenges, what benefit do buyers get out of product samples?

DH: You can use [samples] to determine whether the factory is capable of meeting your quality standards. The problem is that one Chinese factory might have another Chinese factory make your sample.

GS: Global Sources helps buyers purchase samples instantly, solving this problem.

DH: [This service] is a good way for buyers to make sure they are getting what they want.

A buyer can also protect his IP, tooling, designs, etc. by using an NNN Agreement that is enforceable in China and by seeking to register your company name, brand name and logos before you reveal any of those to anyone in China.

GS: A buyer gets samples from three or more manufacturers. All samples meet his requirements and he’s satisfied with quality? Which manufacturer does he work with?

DH: I am a big believer in having the client visit the factory and meet with the people in person. This usually tells a lot.

GS: How can Harris Bricken help buyers with the sample order stage?

DH: We help with the contracts and the IP registrations. I have to note that the biggest change we have been seeing from our clients in terms of buying from China is that they very much want to start buying from elsewhere in Asia, and from Eastern Europe and Latin America.