How do I check an importer’s dependence on one overseas factory before buying?

Start with the purchasing data. Ask for orders by supplier and product line, then see how much of the importer’s sales relies on the one factory. Pay attention to whether that factory makes the best sellers or minor lines. Consider the history too: has the factory had delays, quality complaints or price changes, and how did the owner respond?

Then look at what binds the two sides. Ask whether there is a written supply agreement, who owns the designs, tooling, moulds or packaging artwork, and whether the factory sells similar goods to others. If the importer’s edge lies in products only the factory can make, the factory holds more power than the importer. Your lawyer should read any agreement.

Finally, ask about alternatives. Has the owner sourced samples from a second supplier? How long would a switch take, and what stock covers the gap? Ask who speaks the factory’s language and holds the contact. Your accountant can look at currency and shipping costs, and customs records can confirm what actually arrived. Ask how long goods take from order to shelf, and how the owner plans stock to cover the gap.

Key takeaways

• Ask for purchases by supplier and product line, and see how much rests on the one factory.
• Find out who owns designs and tooling, and whether any agreement is written.
• Ask whether a second source has been sampled and how long a switch would take.