Here we finally get to the most critical part: making sure the supplier actually produces your goods exactly as expected.
It is common for some Chinese suppliers to agree to every single request before receiving your order and deposit. But once production starts, things can easily spiral out of control. Once you pay the deposit, you lose a significant amount of your leverage.
This guide is aimed at showing you exactly how to regain that control, guarantee product quality, and keep your production schedule on track.
Production Step-By-Step Guide
| Steps | How |
| 1. Purchase order contract | Indulge in the Contract. You need to draft an order contract when you’ve decided your supplier. A good contract can help you get rid of many potential troubles. |
| 4. Pre-shipment inspection | Pre-shipment Inspection. It’s the last quality check of the mass cargoes before the shipment. This time, you mainly aim to check the package, label, and product quality as well. |
| 3.Inline inspection | Production Quality Checking. To check the quality during mass production is to secure your order is on the right schedule. Meanwhile, you need to check whether the mass production sample quality is complying with the PP sample. |
| 4.Pre-shipment inspection | Pre-shipment Inspection. It’s the last quality checking to the mass cargoes before the shipment. This time, you mainly aim to check the package, label, and product quality as well. |
1. Purchase order contract
There is no such thing as a perfect contract, but a well-drafted one can easily solve or prevent major disputes. Below are the recommended terms you must include in your Purchase Order (PO).
| The signature of the representative of the supplier | Terms | Description |
| Header | TO/Vender: | ABC Company ltd 123 Hexie Road Yiwu, Zhejiang, CN 310000 |
| Ship To: | ABC Company, Inc 123 Great Street Drive Wonderland, US 45678 TEL/FAZ: +1 407 *** | |
| Date. S/N No. | 25th, Oct. 2016, S/N:20160501A | |
| General | Product Spec | a. Product name b. Photo c. Dimensions d. Material & Color e. Packing & Labeling |
| Lead time | The production time from the deposit payment. | |
| Environmental Requirements | They may comply the environmental requirements of your country. | |
| Copyright, Patents and Royalties | Supplier may not distribute or commercially sell the product and its designing to any third party. | |
| Condition of Goods | Quality control | a. Products should be in accordance with the prescribed product spec. Should the final product fail to meet the quality standard, we have right to reject the goods, and all expenses occurred should be on the supplier’s end. b. We have right to entrust a third-party institute to prosecute the cargo inspection during the production. c. We have right to delay balance payment until we receive a real and effective quality inspection report. |
| Defects | Defect rate varies upon products categories. It is usually around 1%. Some products’ inferior percentage, such as cheap accessories, might be around 5%. | |
| Compliance Testing | You should make it clear that you need a qualified product or just the certificate itself. For one situation, there is a real certificate for you but the product itself doesn’t need to pass the test. | |
| Invoices and Payment | Invoices | All invoices shall clearly specify the PO’s amount and all expenses on buyer’s side. |
| Payment terms | To negotiate the payment term. | |
| Deposit | Deposit: 30% TT (If any) | |
| Balance | Before the shipment or against the B/L copy | |
| Delivery | Transportation terms | Sea shipment, Air shipment, Railway shipment |
| Export terms | EXW, 本船渡し, CIF, DAP | |
| Package | a. Outer carton b. Shipping mark c. Pallet or Textile bag | |
| Documents | a. Bill of Lading b. Commercial Invoice c. Packing List d. Country of Origin/Form A e. Fumigation certificate f. Other documents | |
| Insurance | Clarify whether you need insurance, part shipment, and/or product liability or not. | |
| Late Delivery Clause | Deduct the penalty from the balance payment at a certain rate per day. | |
| Loss or Damage | Declare which party shall be responsible for the loss or damage during the shipping. | |
| Other terms | Attachment | Product photos, color sheet, design files etc. |
| Termination | If the supplier fails to fulfill their obligations under the Contract, shall clarify how to terminate the contract. | |
| Disputes | In case of any disputes, both parties consent that any and all proceedings shall occur in the People’s Republic of China. | |
| Validity | Term of validity | |
| Signature | The signature of representative of supplier | |
| Stamp | Use the red round stamp |
2. Initial production inspection
If you cannot visit the factory in person, you should entrust a third party to conduct the checking on your behalf. However, even if you don’t hire an inspector right away, you can still control your supply chain remotely by taking these steps:
- Request a copy of the raw material purchase list before production starts, and ask for photos of the raw materials sitting in their warehouse.
- Ask for a strict production schedule. Knowing the production cycle helps you track the lead time effectively.
- Have them send you photos of the production workshop. This gives you an opportunity to understand their management style and professionalism.
- Confirm that the pre-production preparation is underway exactly as prescribed in the schedule.
3. Inline inspection
Inline production inspection usually happens when the order is about 20% fulfilled. Again, if you cannot be there, hire a third-party inspector. Commonly, this inspection is performed using the ANSI/ASQC Z1.4 (ISO 2859-1) standard.
The goals of an inline inspection are:
- To check if the cargoes are being produced according to the PO (specifications, quantity, and packaging).
- To check the efficiency of the ongoing production line and verify if they can realistically meet your deadline based on their daily volume.
- To pull a random mass production sample and compare it directly with your approved Pre-Production (PP) sample.
- To check the defect rate early, to avoid a massive batch of inferior products at the end.
4. Pre-shipment inspection
The Pre-Shipment Inspection (PSI) is an indispensable part of the importing process. Problems detected at the factory can be easily reworked by the supplier. Finding these same issues after the container arrives at your local port is a costly disaster.
| Quality criteria | Check lists |
| Quantity | a. Pieces per box or carton b. Total boxes or cartons c. Total quantity |
| Dimensions | a. Height b. Width c. Length d. Diameter e. Thickness etc. |
| Weight & Volume | a. Net weight b. Gross weight c. Size of the box or carton |
| Color | Attach the photo of actual finding |
| Product Appearance | Compare to the PP sample |
| Product Function & Performance | a. Usage test b. Water resistance c. Dust resistance d. Mechanical testing etc. |
| Labels & Mark | Labels and shipping mark |
| Package | a. sale box b. design artwork c. protects foams (if any) d. language etc. |
| Sample Collection | Recommend collect sample for each item |
| Test & Special Requirements | 該当なし |
| Outer Package | a. Outer cartons b. Inner boxes c. Protection d. Pallets or textile bags |
We highly suggest sending a third-party inspector to the factory to report back with a professional inspection sheet. Remember, this inspection doesn’t check every single product one by one; it checks the average quality by picking random samples.
5 Expert Tips for Bulletproof Quality Control
Dual-Language Contracts
A contract is your ultimate tool. To eliminate any language misunderstandings, we strongly suggest signing contracts drafted in both English and Chinese.
The Power of the Red Stamp
This is critically important in China. You must ensure the supplier stamps the contract with their official red round seal. A red seal is registered with the government and legally binding under Chinese law. A blue seal or a simple signature often holds no legal weight.
Ask for a Fingerprint
Having the supplier’s legal representative sign and press their fingerprint on the contract is even better. Fingerprints carry strong legal authority in China, and local businesspeople are accustomed to this practice. It is a great way to gauge their sincerity.
Use Objective Third Parties
For Initial and Inline inspections, an objective third-party company is your best bet. If you are on a tight budget, explicitly demand that the factory’s internal QC team sends you a detailed inspection report with photos.
Hold the Leverage
Never wire the final balance payment bluntly. If it is a new supplier, order a Pre-Shipment Inspection. You make the decision to approve shipping or demand re-working based only on that report. Once the goods leave the factory and the balance is paid, it is incredibly difficult to force a Chinese supplier to take responsibility for defects.
We hope you find this guide helpful for your importing business! If you need a reliable partner on the ground to draft bilingual contracts, audit factories, or conduct professional quality control inspections, the team at My Sourcify is here to help. Leave your questions in the comments below!
