China supplier exit plan before onboarding

List the assets the supplier may control: molds, drawings, packaging files, component sources, inspection records, certificates, spare parts, customer-specific labels, and shipment documents. Then decide which assets the buyer must be able to recover or reproduce.

A supplier that controls only production capacity is different from a supplier that controls the product file. If the supplier holds tooling and drawings while also receiving payment through a related company, the buyer's exit risk is higher. Verification should capture that structure before repeat orders begin.

The buyer should keep its own copy of drawings, approved samples, specifications, inspection criteria, packaging artwork, and supplier approvals. Do not let the supplier become the only archive. Staff changes, disputes, and platform closures can make old records hard to retrieve.

For regulated or customer-specific products, store certificates, test reports, and batch records in a buyer-controlled folder. If the buyer switches suppliers later, the new supplier and customer may need the history.

A second source does not always mean a fully qualified backup factory. It can start as a shortlist of alternative suppliers, a second quotation, or a record of which parts would be hard to move. The point is to know the switching cost before the supplier relationship becomes strained.

For custom goods, test whether the buyer owns enough information to quote the product elsewhere. If the only workable specification sits in the current supplier's head, the buyer has not onboarded a supplier. It has outsourced memory.

Exit terms belong in the early contract, when both sides want the relationship. State how tooling can transfer, how open orders finish, how confidential files get returned or destroyed, how replacement parts remain available, and how final payment ties to handover obligations.

The supplier may resist some terms. That resistance is useful information. A supplier that refuses any discussion of tooling transfer or file return may still handle one order, but the buyer should avoid building a dependent product line around it.

Supplier risk changes. A small supplier may become critical after several successful orders. A simple product may gain private-label packaging, customer-specific testing, or dedicated tooling. Review exit risk when annual spend rises, product complexity increases, or the supplier becomes the only source.

An exit plan gives the buyer negotiating room. It also improves the current relationship because both sides understand what the buyer owns, what the supplier controls, and what must happen if the relationship ends.

An exit plan also tests how the supplier views the relationship. A supplier that handles normal commercial questions will discuss files, tooling, open orders, and spare parts in practical terms. A supplier that reacts with pressure or vague reassurances may be signaling that the buyer will have little control after payment. The buyer should capture that behavior before the supplier becomes critical.

Procurement teams can keep the conversation simple. Ask what records the buyer will receive after each order, how long the supplier will retain drawings and samples, and how a tooling handover would work if the buyer changes factories. These questions do not accuse the supplier of bad conduct. They show whether the supplier can support a professional account with clear boundaries. The answers should sit beside the onboarding approval, not in a forgotten chat thread.