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

So 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:

Payments 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:

Prices 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:

In 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:

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

Next, 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:

In 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:

After 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:

Usually 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