May 5, 2015 by Andrew Minalto - 50 Comments

Trip to China: £3000 vs Factory Inspection: £70

china-factory-inspectionSo you have found that perfect supplier in China, using Alibaba or any other sourcing platform, you’ve made sure the company isn’t a scam, and everything went through fine with your sample order…

But now it’s time for you to send your first real order.

Be it for £1k, £3k, £10k or more – there’s a worry inside you that stops you from making that payment. You simply fear getting scammed, especially if it’s your first importing deal or first time ordering from that particular supplier.

So what can you do? How do you keep your chances of getting scammed to an absolute minimum? I have already talked about safe payment methods on my blog, and that is one incredibly important aspect, but there’s also one more thing you can do to fully verify the supplier that you’re dealing with. And that is – doing a factory audit/inspection using a 3rd party inspection service.

How does it work? It’s a pretty straightforward process – you hire an inspector who goes to the supplier and does an independent review on the company in question. This means checking the company’s registration documents, bank account information, office, manufacturing, warehouse facilities and many more things!

In essence it’s almost like you’re visiting the supplier yourself, just without the huge costs associated with a trip to China! I have been using such inspections for many years now and they’re really valuable when assessing new suppliers to deal with as well as checking the product quality while still in the pre-shipment stage.

Today we’re going to cover how this all works in detail so that you can use this as a guide in the future, when conducting your own supplier inspections.

1. First things first – letting your supplier know about the up-coming inspection.

You don’t want to hire an inspector to visit a supplier you haven’t been in contact with! They may simply refuse entry or won’t cooperate at all.

Of course normally you will already be in communication with the supplier as you contacted them to get more info about products (prices, MOQs etc.) and placed a sample order. So they already know who you are.

When you’re ready to do the inspection, simply let your supplier know that you would like to check their company using a 3rd party inspection service. In most cases, genuine suppliers won’t have any problems with this and accept it as standard procedure.

If your supplier refuses an inspection for any weird reason, for me personally, that would ring alarm bells and it usually means something is wrong. Either they’re not what they say they are or they’re hiding something from you… whatever the reason – if this scenario occurs, I would seriously reconsider using that supplier for a full order. The only valid excuse to not do an inspection would be if they’re on holiday or attending a trade show; any other stories I simply wouldn’t believe.

And if they say they’re on holiday right now or attending a trade show, they won’t have any problems doing an inspection a week or two later.

So once you have agreed with your supplier that you’ll do an inspection, the next step is to…

2. Find a company/individual to do the inspection for you!

There are many companies, individuals, and websites online offering this service and prices start from $50, going up to $300 and more. I’m sure many of these services are totally legit and usable but I like to keep things simple and use Alibaba’s Inspection service page where you can hire dozens of different inspection companies and be protected in your transaction:

alibaba-inspection-servicePayments are made via Escrow and this means that you only release the funds once you’re happy with the service received. Another plus is that you can pay using your credit card or various other payment methods (wire transfer, Moneybookers/Skrill and many more).

Another huge plus is that you can see and review the FEEDBACK for each service, left by real users/customers.

If you click on Find Inspectors, you’ll see a huge list of inspection services, sorted by number of completed transactions. On the same page you can also see pricing details as well as information about what region each service provider works in:

alibaba-inspectorsPrices are usually given per inspection day/man-day, in USD. This basically means a full inspection of one supplier.

Once you have found a company that you want to use for inspection, proceed with the next step, which is:

3. Ordering an inspection service on Alibaba!

To make your life easier, I can simply recommend using a company called Richforth as they:

  • Have a long established track record
  • Have one of the cheapest prices – just $103 for an inspection
  • Cover all major regions/cities in China

You don’t even need to contact them prior to placing your order! You simply go ahead and click on the company name, then ORDER INSPECTION.

After that you’ll be asked to login to your Alibaba account. If you don’t have an account yet, simply create one – it’s FREE!

On the next stage you’ll be provided with an order form:

order-inspectionIn Inspection Type select Full Inspection or Factory Audit, which basically mean the same thing.

Is this a re-inspection? No (if this is your first time inspecting this factory).

P/O number – if you have a pro-forma invoice ready to be paid, you can put that number here. It’s for your own reference only.

Desired inspection date – choose tomorrow or the day after tomorrow (provided they are work days of course).

Shipping date – leave it empty as it does not relate to factory inspection.

In the next block you simply enter the inspection location information e.g. the address and contact details for the person you have been dealing with:

inspection-addressYou can usually find this information on a company’s Alibaba profile, but if not, simply ask your supplier!

inspection-address-2Next, the inspection requirements block; here you can simply leave comments on anything specific you want the inspector to pay close attention to. It could be the quality of materials used (with images), quality control procedure, cleanliness of the factory and other things that are important to you. Most of this will be provided within the standard report anyway so you just need to leave comments on specific requests here:

inspection-requirementsIn the last comment block you can leave your email address where you want the report to be sent to.

After clicking on Submit, your order will be completed but pending payment. You simply click on Pay Now to proceed with payment. I usually just use my VISA card for these payments as it’s quick & easy but if you prefer, you can choose from any of the payment methods provided on the payment page:

inspection-paymentAfter you have paid for your order, that’s it! Just sit back and wait for the inspection to be done and a report sent over. Sometimes the inspection company will contact you if they need any further details from you, say they need to verify the supplier’s contact details. But apart from that, there’s nothing you need to do.

4. Report evaluation

Depending on which day of the week you place your order, you’ll receive a final report within 3-4 business days, in most cases. And it will look like this:

factory-auditUsually it will be around 20 pages long, in PDF format for easy viewing on any device and computer. Full of various details, inspection results, pictures of the factory, office, warehouse, product samples and much more. Feel free to study my sample report to get a feeling of what info you should expect from such a report.

In the beginning of the report you’ll find general information about the company – their legal name, registered address, year established etc. etc. It’s all pretty self explanatory and you’ll see instantly if something is wrong with the company and what they’ve told you.

There are a few key elements you need to keep an eye on:

  • Year Established – the longer the company has been established the better, of course. This number should also match the company’s profile on Alibaba (not necessary the Gold status year but the established year in their About Us page).
  • Bank account information – this should match the info you have in your pro-forma invoice.
  • Employee count in R&D – if a company has a dedicated R&D department, it means that they don’t only copy someone else but also create and develop their own products, which is a good sign of course.
  • Employee count in Quality Control – this is SUPER important!!! A good manufacturer will have a detailed quality control procedure and staff in place to do continuous quality control on all goods manufactured. If the report says that they don’t have quality control procedures in place, I would seriously re-consider using that supplier as you’ll run a high risk of getting a large percentage of defective products.
  • Export license – companies in China need an export license to deal with customers outside China. If they don’t have such a license, they basically can’t supply you by default.
  • Machinery condition – this may be more of a personal preference but I like to deal with clean factories and factories with production machinery in good working condition. As there are many factories in China who use very old, barely working machinery which probably don’t produce the highest quality parts for the products they sell.
  • Certificates – if the products you’re buying need special certificates, you should definitely warn the inspection company beforehand to check these carefully and take images so you can later cross reference them and be sure they’re genuine.

There is MUCH more info in your report, but these are the most important parts, in my opinion.

An inspection company usually also gives an overall verdict on the inspected company (in my example it is GOOD) and if it is POOR or BAD, something is seriously wrong with the supplier. EXCELLENT and GOOD are the ideal scenarios.

If it’s MIDDLE, you have to investigate the reasons for the bad grade (could just be heavily used machinery which does not always mean the supplier is bad per se). Each case will be different of course so use common sense at all times but if you see something you don’t like in the report, it’s best that you find a new supplier.

Conclusion

I hope this guide clearly shows you that nowadays you don’t have to go to China in person and spend thousands of pounds just to check out a supplier or two. Spending $100 and getting this task done in a few days is more efficient and certainly more affordable. Sure, when you visit factories in person, you can most likely get a better picture of everything, negotiate terms and pricing but for most people it’s simply not cost effective, especially when small orders are in question, worth just a few thousand pounds.

I would seriously recommend doing such an inspection after you have received and confirmed samples with ANY new supplier you’re dealing with. It goes without saying that this doesn’t mean that you’re 1000% protected from scams or any problems, but it does greatly reduce the chance of that happening. And if you pay for your goods with one of the recommended methods (PayPal, Escrow) then the odds of you being scammed are almost nil.

Another important time when you may want to do another inspection, especially if your order is worth £5k, £10k or more, is before your order is dispatched. This is called a PRE-SHIPMENT inspection. This is different to the normal factory inspection as in a pre-shipment inspection, the inspector will carefully go through your order, take pictures, check goods against defects and basically do any other tasks you ask for.

THIS IS CRUCIAL when you order electronics or highly complex items that simply need to be checked for quality defects before they’re dispatched to you. A good inspector will take a few samples from each carton (not just from the top) and check them thoroughly against specific quality guidelines that you give to them.

Usually, when you place an order with a Chinese supplier, you pay some % of the total amount when you initially place the order (50% is typical) and then pay the remaining balance when the goods are manufactured and ready for dispatch. And THIS is the exact time that you want to do a pre-shipment inspection on your goods… BEFORE you pay the remaining balance!

This way you make sure that your order has been manufactured to the required standard and only then do you send the remaining money.

Most of these inspection companies are open to other, more specific tasks that you may require, so don’t be afraid to ask. As long as you pay them their daily fee ($103), they will be more than happy to stand by while your goods are packed and loaded into the container or any other time that you require a “man on the spot”!

This really is an invaluable service, available to anyone importing goods from China.

Okay, that’s it for today!

If you have any questions on this topic, please leave them in the comments box below and I will personally answer you within 24 hours, Mon.-Fri.

Thanks,
Andrew

50 Comments
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  1. Luis Ricardo Umana Gomez

    Hi! great article Andrew!
    I wanted to ask you if you feel I need to use these services with a small business? i live in Costa Rica and plan to open an online vaporizer shop using a currier service locally to distribute my products (this to avoid having to pay for an actual location or store)
    the thing is that Costa Rica is extremely small with no more than 6million habitants, this means that my orders will always be no more than 100 items at a time. should I spend so much money on audits with such a small amount of items?

    1. Andrew Minalto

      Not necessary, no.

      especially if you buy well known, BRANDED vaping products.

      Just deal with reputable suppliers, who are authorised to distribute those brands (to avoid fakes), pay via PayPal and you should be fine.

      Thanks,
      Andrew

  2. Michelle Sjogren Leong

    I am currently working on my first purchase and your website has been invaluable. I absolutely agree that a pre-shipment inspection is a small price to pay and I will take on that piece of advice.

    On top of this preventative strategy, what would you recommend, or is common practice for 2nd tier “management” actions? Is it common practice to ask for a few “extra” products thrown in on top of ordered MOQs? And/or any common clauses in the purchase contract for “returns”. I’m enquiring as the products I am dealing with are of relatively high value.

    Many, many thanks and I’m sure there are many newbies out there like me that have benefited from your generosity in sharing your experience and expertise.

    1. Andrew Minalto

      Hi Michelle,

      Thanks for your comment.

      Not really, no, extra products are not usually offered unless it’s a specific case, say when you know that X % of products will be defective by default.

      You should make an agreement with supplier what happens with defective items, Dead on Arrival products – how you send them back, who pays for shipping etc. This is very important if products are of high value.

      Thanks,
      Andrew

  3. Just let you know that you have broken link (404 error code) on anchor keyword “Richforth” in the sentence: … can simply recommend using a company called Richforth as they…
    I am SEO expert so it is my professional deformation heheh…. 🙂
    Thanks for helping us!

    1. Andrew Minalto

      Many Thanks Erwin, fixed that! 🙂

      Andrew

  4. A few points about your article. Richforth is not an inspection company. they charge you 103 USD but on the back end what they don’t tell you is they use your supplier info to offer your products to the competition…. You don’t know this ? If course you don’t….
    So you better choose an independant company to do your inspections…

    1. Andrew Minalto

      Hi David,

      Thanks for your comment.

      Are you referring to the monthly newsletter they send out with product ideas?

      Let me know some more information as I have personally found them very useful.

      Thanks,
      Andrew

  5. Elliot Richards

    Thanks for a great article, very useful for me. I’m at the stage where I’ve just ordered my first samples after thoroughly checking a few different suppliers. If all goes well with the samples I’ll do a factory inspection then a pre-shipment check. Thanks again for your help, much appreciated!

    1. Andrew Minalto

      Good to hear that Elliot & you’re welcome! 🙂

      Let me know if you need help with anything.

      Andrew

  6. Hey, thanks for this information. You’re a life-saver! I’ve clicked on the link for Richforth as suggested, but they’re not there… perhaps they’ve changed names or closed down? Do you have a different inspection company that you now use? Thanks!

    1. Andrew Minalto

      Hi Scott,

      No, Richforth are still operating:

      https://inspection.alibaba.com/1.html

      They’re still my number 1 choice.

      Andrew

  7. Hi Andrew,

    I have asked for a random final inspection on handbags, this is the first time that I am importing so I wanted to be cautious. The inspector randomly inspected 20 pcs out of the 100 pcs I have ordered. I have received the report and it says:

    OVERALL INSPECTION RESULT: (Client has the final decision to Reject or Approve)
    Special attention: The factory didn’t allow the inspector to do carton drop test
    AQL OVERALL RESULT: FAIL

    Is it common that the factory did not allow the carton drop test?

    The overall result failed because by controlling 20 handbags the inspector found 4 handbags that had minor defect (while the maximum allowed was 2).

    Defects are crack, glue crack and threads.

    I do not know what to do… if by inspecting 20 units, 4 of them were not ok, this is a 20% defect ratio… pretty poor.

    I wish I had asked for a full inspection instead of random, but what would you advise me to do? What people are usually doing in that situation? Is it common to ask the factory to re-check the 100 units one by one and redo the ones that have defect?

    Thanks for your help!

    1. Andrew Minalto

      Hi Paul,

      Thanks for your comment & Welcome to the World of importing from China! 🙂

      Defects are very common when you deal with Chinese manufacturers. The way you want to resolve this is by communicating with supplier directly – explain them the problem and ask what options they can offer you – this can either be fixing those defective items, replacing them, giving a partial refund or credit on next order.

      You really need to work with supplier directly to get this resolved, no one else will help you.

      Thanks,
      Andrew

      1. Hi Andrew,

        Thanks a lot for your prompt reply 🙂
        Understood and thanks again for the amazing articles you do!

        1. Andrew Minalto

          You’re welcome Paul! 🙂

    2. Out of curiosity, which inspection company did you go with?

  8. Angella Lynch

    Hi Andrew
    You are a God sent!
    I have designed my own graphics for backpacks and 3 months ago sourced a supplier in China via Alibaba. I ordered 4 samples each with a different design. I was so disappointed when the samples arrived. The material was of poor quality and some of the images were upside down. Also, the lining was very thin. I tested the strength of the backpack by placing 4 books inside and walked around, jumped on the spot and the stitching became loose. You can imagine how disappointed I felt. I am so happy for your report and advice as I’d lost hope of ever finding a genuine supplier in china.

    I note your “Start Your Own eBay Business Today” ad; and yes, I was in the process of deciding if I should start selling my backpacks via an eBay shop or setting up a basic website. I just want a life Andrew!! :). I will sign up to get some information about the whole process i.e. Is it cheaper to run a eBay shop?
    What about T-Shirt printing? Would you advise China or India?

    Thank you! Thank you! and Thank you again.
    Angella

    1. Andrew Minalto

      Hi Angella,

      Thanks for your comment.

      I’m glad to hear you started with samples first! You lost some money on samples but avoided massive/costly mistake by going with big order from day one.

      You don’t need to pick just one selling platform Angella – you can sell on all 3! eBay, Amazon and your own website. eBay is the quickest/fastest way to get your product out there and get sales in. Building a website, promoting it and getting traffic will take much longer so I would recommend you start with eBay first.

      As for t-shirt printing or ANY product you want to print on – I would personally just source blank products from China and then arrange printing locally, at least in the beginning. This way you can keep pulse on the quality and while it may cost more, you can do way more different designs, in small quantities to test the market, compared to China where you would order massive quantities of one design.

      Hope this helps!

      Andrew

  9. Hello,

    when you talk about the pre-sipment inspection you mean that we need to pay for a second inspection? And how we do it so the inspection arrives just before the shipment?

    Thank you.

    1. Andrew Minalto

      Hi Arturo,

      You don’t have to do it if you don’t want but it is recommended, yes. Especially if your order is big and you deal with items that are sensitive to quality issues, like clothing for example.

      Supplier will let you know when goods are ready and then you simply order pre-shipment inspection.

      It’s a good idea actually to mention supplier that you’ll be doing such inspection when goods are ready as this may improve the overall quality of products they make for you.

      Thanks,
      Andrew

  10. Emmanuel Bégué

    Hi Andrew,

    Your blog is very informative, thank you!

    I’m trying to manufacture a product (a camera strap) with elements that will come from different factories (at least 3).

    I have no problem finding each factory for each product; but I’m struggling to find the factory for the final assembly and packaging of all the parts, for the final product.

    I’m not even sure what keyword to use in searches for this.

    Would you have any advice about that? Could inspectors help in finding the right provider?

    Many thanks,
    Kind regards,
    Emmanuel

    1. Andrew Minalto

      Hi Emmanuel,

      I would start by asking these 3 factories whatever they could do the assembly for you? If the quantity is high enough, some should be able to help you with this.

      If not, yes, I would probably hire a sourcing agent on Alibaba who could find you factory that could do this job for you:

      https://www.alibaba.com/showroom/sourcing-agent.html

      Thanks,
      Andrew

  11. Thank you very much for this useful information!

  12. Hi Andrew!

    Thank you for a great article.

    Do you know if there is any inspection services available in the US?

    1. Andrew Minalto

      There should be, yes.

      Do some Google searching on company verification/inspection services in the US.

  13. Hey everyone,

    Thanks a lot for the articles. Your site is really helping my business along.

    I recently had an audit completed by Richforth. Thanks for the referral. They are great to work with.

    The result of the audit was ‘middle’.

    The report said there is no ‘quality management system’ though there are 6 QC staff manning the production lines. There are also systems in place for detecting defects, what they do with defects. They maintain quality control records as well. Is this a pass or fail on the QC front?

    They do not have export license but they use an export agent.

    Factory was not clean but the equipment is all in ‘good condition’.

    The samples I received from them were in perfect condition.

    I am having difficulty knowing whether to move forward with this supplier or not. Any suggestions?

    Thanks,

    Julian

    1. Andrew Minalto

      Hi Julian,

      It depends…

      I usually look at whole report as such and if all looks good, I proceed with the next steps. Very often in these reports I see problems with quality control or say cleanliness of the factory. But that’s because perfect standards are high and not that many factories come out all green.

      You can judge from the images in report on how good the factory looks.

      QC issues – you can ask your supplier about this, have agreements in place and do pre-shipment inspection, at least for you first order so you’re 100% sure you get what you paid for.

      Using an export company is common thing, so that’s nothing too suspicious either.

      Thanks,
      Andrew

      1. Thanks Andrew that’s a big help.

        1. Andrew Minalto

          You’re welcome Julian!

  14. […] I recently wrote about factory inspections and how they are an integral part of vetting any new supplier – you can read that post here if you missed it: Trip to China – £3000 vs Factory Inspection – £70. […]

  15. Hello Andrew,

    Your article is very helpful. I will slightly brief you about my scenario:
    I had an order completed from a supplier who I know is legit as the product (non-removable stickers) came in as expected with good quality. The problem occurred in my second order with the supplier when the material I received (about half of the total) was defective. According to the supplier, the raw material they got from third party was defective and they didn’t know about it too until I told the supplier after applying few stickers. Now there is another order coming up with more bigger quantity and I am skeptical this time whether to order again from the same supplier or not. As starting from scratch the ‘supplier hunt’ takes lot of time.

    Now I have one question:
    How can I use third party inspection company to just do a Pre-ship inspection with the sole purpose of only checking the stickers whether they are OK or not (problem was they weren’t easily coming off from base material).

    Thanks in advance!

    1. Andrew Minalto

      Hi Faisal,

      You do it in exact way as you order factory audit! I would recommend you contact inspection service before you place your order as often for such specific tasks they’ll have different pricing. But overall, process remains exactly same.

      Andrew

  16. […] up on last week’s article on how to do proper, 3rd party inspection on suppliers in China, today I want to share with you 4 videos that cover in detail how Chinese factories work, how […]

  17. Mandy Williams

    Your articel about inspection was perfectly timed as I have recently received an acceptable sample and wanted to check out CE certificates etc. I have been in touch with the inspection service you suggested but there seems to be some confusion about full inspection and factory audit which they don’t seem to regard as the same thing and whilst the supplier was happy for an inspection they are not so happy about a factory audit as they say this will involve expense for them and are wanting to know what my order size will be. Obviously I want to start with a small order. What should I be asking for.

    Mandy

    1. Andrew Minalto

      Hi Mandy,

      Maybe by audit your supplier understands Financial Audit?

      This is not what we’re doing here. You need basic inspection, not financial audit.

      Andrew

  18. Hi Andrew

    I’m looking at importing my first order. My question is: DO you order the inspection before or after placing an order?

    Also my supplier has sent me an invoice directly, is this OK or should I place an order thru the Alibaba system?

    Thanks
    Paul

    1. Andrew Minalto

      Hi Paul,

      You want to do inspection BEFORE paying for the order. That’s the whole point here – to get factory inspected before you send your money over.

      Ideally order should be placed via Alibaba as then you get more protection (if Escrow payment is used or supplier is covered by Trade Assurance program).

      Thanks,
      Andrew

      1. Thanks Andrew

        I will do that. My supplier has offered either Paypal or TT for payment methods. Im guessing Paypal is safer?

        Whats the best way to tell them that Woodland Group are doing the shipping? Or do Woodland Group know how to handle it from the factory?

        Just ordered your course as well to help boost my exisiting eBay business. Just doing product research!

        Thanks
        Paul

        1. Andrew Minalto

          PayPal is safer, yes.

          Just give supplier contact details to WG and they’ll handle it for you.

          Andrew

          1. hi Andrew

            Looking at the Alibaba order form its states the payment method is T/T only, I have the PayPal info on the pro forma invoice from supplier

            Would the only way to use PayPal to be order outside of Alibaba?

          2. Andrew Minalto

            Yes, that’s true.

            Via Alibaba’s system you can’t make PayPal payments as Alibaba does not accept PayPal.

            Andrew

          3. thsnkd Andrew

            My supplier won’t except PayPal now because of the commission so this leaves me a T/T payment thru alibaba. It is thru the trade assurance program and they are a 5 year gold member. So this all sounds safe?

            Thanks

          4. Andrew Minalto

            Yes, if it’s with a contract via Trade Assurance program, it’s actually safer than PayPal.

            Andrew

  19. Yet again some more great advice and valuable information for your readers Andrew. Many of the newer importers I deal with will not commit to factory inspections or QC of any kind as it adds to their costs, and to be fair in most cases everything works out fine.

    However when things do go wrong, and believe me it does happen, how much would you have paid for peace of mind?….. It can then start to look like a bargain.

    1. Andrew Minalto

      Exactly Darren! 🙂

      Thanks for your comment!

  20. Great information. Thanks

    1. Andrew Minalto

      You’re welcome Ranjan! 🙂

      1. Jessica Gorinto

        Hi Andrew,

        Great Article! Very helpful information. I learned a lot from you.

        Thanks

        Jess

        1. Andrew Minalto

          You’re welcome Jess! 🙂

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