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How to deal with DEFECTIVE items in China?

January 3, 2019 by Andrew Minalto
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Chinese New Year is around the corner, and you have to act fast to get your goods dispatched before your supplier switches off for several weeks.

I’m pleased to see that more and more people are following my advice on doing pre-shipment inspections in China. Ten years ago no one was doing this for small-scale orders as we didn’t have such cheap and accessible inspection services available like we have now. Today, when you can have an inspector to work for you for one whole day for just $100, it’s utterly stupid not to use this opportunity and check goods quality before they leave supplier.

Speaking of quality of the goods coming from China – please do understand that there are various standards in manufacturing and it’s not that Chinese manufacturers have problem manufacturing products up to highest standards. They can! At least most of them can.

The problem is that most people always try to negotiate the lowest possible price with the supplier, which results in a product of substantial quality where the supplier has cut cost on materials, labour, quality check or testing.

To avoid problems, you need to communicate with the supplier from DAY ONE that you’re after the highest quality/grade product they can offer. Inform them clearly, before placing the order, that you will be doing pre-shipment quality control inspection and goods with defects won’t be accepted.

THIS IS IMPORTANT!!! If they don’t want to accept such rules even before you have placed your order, chances are they won’t be held responsible for anything later on.

Only work with suppliers who fully understands your quality needs, even if their price is higher than some competitors. Many Amazon sellers often put too much emphasis on the item’s price – if you buy something for $4 on Alibaba and sell it on Amazon for £14.99, it may well be worth paying 30 cents extra in China to get highest quality product possible. While on paper your margin will be reduced, in real life it could be quite the opposite – due to better ratings, rankings and fewer returns, you will make more profit at the end of the day.

Ideally of course if you can provide very specific requirements on how the final product should look. Often a SAMPLE product can act as a benchmark for quality control procedures supplier should follow during the manufacturing process.

In real life, even when you warn the supplier before you place the order, some % of stock will have some defects. Usually, they’re classed as minor and major defects. Minor defects are mostly small visual marks/scratches that are ok in most cases (unless the product specifically can’t have ANY imperfections).

Major defects are a more significant visual imperfection or even functional defects. I most cases you wouldn’t want to sell a product with a major defect as it will result in bad customer experience, a return and negative review or seller feedback.

The inspection will reveal these defects and give you a % of minor and major defects. If you get lucky and there are no major defects and just a small percentage of minor defects, you proceed with the second payment and organise shipping.

IF on the other hand, you have major defects, you will have to deal with the problem and ask the supplier to fix it. Just be up-front about this and tell them that such defects are not acceptable and that they need to check all items and take out defective items. Either replace them with defect-free units OR if that’s not possible, reduce the final payment by the amount that covers faulty items.

Obviously, in cases like these, it helps if you have made the order via Alibaba’s Trade Assurance as then you have some additional leverage in your hands. But even without a Trade Assurance order, the supplier is still waiting for the remaining payment for your order and in general is interested in finishing the deal.

As an added layer of security, in the Trade Assurance order (or contract), make a note on how defective items are exactly handled (exchange/refund/credit) – this way you will at least have a written agreement/confirmation in place, and it will help you with negotiations later on.

Also, product defects are one of the reasons why I recommend that you DON’T send stock directly to Amazon when you’re just starting, with a new product. If you post the stock to yourself first, you can manually check each item before sending it to Amazon! Do this for first few orders or until you get 10 to 20 product reviews. After that point, one negative won’t have such a devastating impact on your overall ratings as it is when you’re just starting.

Yes, it is a tedious and time-consuming task but at least then you know 100% that every product you sell is perfect. This will help you avoid a situation when a new product is launched, and you get two one-star reviews in a row which ruins your success with that listing.

When you build a large business, checking each item won’t be a feasible option, but in the beginning, you have nothing but time, so please do it.

Unfortunately, there will be suppliers who will refuse to replace defective items or credit them back to you – as a business owner you have to be ready for that scenario too. Do everything you have to minimise chances of it happening though and as I explain in Amazon Sharks course, IF you brand items with your logo/custom packaging, supplier can’t really sell the product to anyone else, hence you have an added layer of protection/leverage when you brand the products your order from China.

Ok, that’s it for today. A topic that carries a lot of negatives but it is what it is – a part of any business that imports physical products from China!

Feel free to leave your comments, share experience or maybe you have extra tips that have helped for you, in the past, to get defective items replaced by the supplier. Comment below!

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