Is the supplier reliable for European customers?

The risk: language barrier, time zones, no contracts

A supplier may be technically capable — but can he also function as a business partner for European customers? Is he reachable when it's business hours in the EU (8 hours time difference)? Does he speak English well enough for complex contracts? Does he know EU standards for packaging, labels, warranties? Will he cooperate when complaints come — or stall under various pretexts?

"Hard skills" (product quality) are necessary — but "soft compliance" (communication, contract, cooperation) determines whether a supplier relationship becomes a long-term partnership.

What we check

1. Contract capability per EU standard

Has the supplier accepted an EU-compatible contract? Clauses on: warranty (at least 2 years per CISG / EU law), jurisdiction (ideally neutral Singapore arbitration or EU jurisdiction), liability cap, force majeure, delivery Incoterms (FOB/CIF/DDP). Template: ICC Incoterms 2020.

2. Communication reliability

We test over 4–6 weeks before order placement: how quickly does he respond to emails? Within 24h is standard. Delays, evasive answers, or language problems on technical topics are red flags. We also check: does he respond during Swiss/EU business hours or only during Chinese office hours?

3. Existing EU references

Does the supplier have existing EU customers? We request 2–3 references — and contact them directly. Real customers give honest information on: on-time delivery, complaint behavior, innovation willingness, price discipline. Fake references are usually quickly exposed (standard answers, delayed responses, formulations similar to the sales pitch).

4. IP protection

For OEM/ODM products you need an NNN agreement (Non-Disclosure, Non-Use, Non-Circumvention) under Chinese law — not US-style NDA. See China Briefing IP protection. We check whether the supplier accepts such an agreement.

5. Certification readiness

A supplier working for the EU market should regularly accept audits — including unannounced ones. If he evades ("not possible without 4 weeks notice"), he's hiding something. Real manufacturers with ISO 9001 or BSCI have this in their DNA.

6. Banking & payment compliance

Does he accept L/C (Letter of Credit) or insist on 100% T/T upfront? L/C protects you from supplier risk. Also important: bank account in company name (not Hong Kong, not personal). And: does he accept discount for defects?

7. Language resilience

For complex contracts you need someone who doesn't just know "Hello, good price" English, but who understands technical specifications, contract texts, and complaint communication. We test this with concrete technical questions before order placement.

Consequences if ignored

• Delays on complaints — communication problems can delay complaint handling by weeks.
• No-contract delivery — if your contract specifies Chinese law and Chinese jurisdiction, you cannot effectively sue in the EU.
• IP theft — without NNN agreement, the supplier can sell your designs to competitors. What's done is done.
• No discount for defects — if not contractually agreed upfront, renegotiation after delivery is nearly hopeless.
• Sudden price increases — without long-term supply contract, the supplier suddenly raises prices 20–40% after 2–3 orders.

Sources & further reading

• ICC Incoterms 2020 — international delivery clauses
• CISG — UN Sales Law
• China Briefing — NNN Agreements
• WKO China — foreign-trade help
• BSI ISO 9001 Guide