Inspection of suppliers and goods in China

We would like to share our experience in the field of product quality inspections, as well as audit and selection of suppliers. Often traders pay little attention to these three aspects, focusing on issues of forwarding and customs clearance. Sometimes they do not even know about the existence of this kind of services in China. However, such frivolity or ignorance can lead to great losses.

The specificity of working with China is that in the Chinese market there are a great many manufacturers of products, their agents, second-hand dealers and charlatans. Deploy remotely, being in Russia, in which counterpart is trustworthy, and which is not, it is often not possible. Choosing a supplier of the necessary products, for example, on the well-known resource alibaba.com, it is often impossible to understand whether the company is a manufacturer of a product or a reseller, especially it is impossible to understand how pure the intentions of a Chinese counterparty are. In this case, traders have to rely on themselves or go to China themselves to make sure that the supplier company exists and produces the necessary products. "And what, unless the contract is not a guarantee of cleanliness of the transaction?" - the Russian businessman will ask. The contract in any case should be and this contract should be legally correctly drawn up. But, in our opinion, the more you judge on the Chinese side and seek truth and compensation in court, it’s better to immediately insure yourself and conduct a verification of the Chinese supplier with the help of a consulting, surveyor or legal company based in China. The depth of such a check can be different, so the list of what is checked includes but does not exhaust the following: general information about the company, information about the founders, management information, information on bank accounts, information on relationships with counterparties, personal meetings with shareholders and management, physical inspection of production and finished products. So, for example, legal companies make an emphasis on verifying the company’s constituent and permissive documents, while surveyors carry out an exit to the enterprise itself. We would also like to draw the attention of market participants to the fact that it is often advisable at the supplier selection stage to turn to consultants and outsource this process to them, since such specialized companies have much more search possibilities, relying not only on the Internet, but also on their own established contacts and databases. Then the process of selecting and auditing the supplier can be combined into one comprehensive service.

However, the legal "cleanliness" of the supplier does not always guarantee the quality of the product itself, the more it does not protect against the so-called "human factor", therefore, product quality control must be done regardless of the history of the relationship with the supplier itself. Quality control is done as preload, that is, before the start of loading of the consignment of goods, and during loading. Pre-shipment control allows you to identify any inconsistencies before the goods are loaded into a container and at the same time there is a possibility to correct or refuse to purchase this lot of goods. When inspecting quality during loading, the quality, quantity and nomenclature of the lot actually loaded into the container are fixed. What kind of quality inspection is needed in a particular situation, it is necessary to decide in each specific case, often the trader chooses both types of inspection.

In conclusion, I would like to talk about how we classify consulting companies that provide such services in China. This classification can help you figure out how to choose a consulting company in China.

1. Freelancers, both Chinese and Russian-speaking. This category is characterized, as a rule, by a lower price, but also by a lower quality of work, mandatory prepayment, and lack of any responsibility. For example, the cost of quality control can be 150 - 300 US dollars.

2. Chinese companies. The cost of services is higher, one inspection of the quality of the goods is usually 200 - 400 US dollars. A contract is required. The quality of work is different, but very often, unfortunately, such Chinese partners create the impression of "inadequate". Responsibility is regulated by the contract, but the process of possible involvement of the counterparty to the responsibility is labor-intensive and not always effective. Often an advance payment is required. Often there is a language barrier, it can be difficult to explain their requirements. There is always the fact that the Chinese inspector can negotiate with a Chinese supplier. Particularly we ask you to pay attention to the fact that even if the consulting (surveyor, legal) company is not Chinese, but, say, Russian or international, if the Chinese work there, then it is impossible to exclude the above factors.

3. Russian companies operating in the Chinese market. The cost of services from the average, one inspection of the quality of the goods is usually 250 - 500 US dollars. Convenience of communication in one language in direct and figurative senses, often an agreement with the Russian jur. face and payment in rubles, quality is higher and responsibility in accordance with Russian law. We advise you to choose companies with fully Russian personnel. Often work without an advance payment.

4. Large international companies. The cost of services is high, one inspection of the quality of the goods usually ranges from 300 to 800 US dollars. The quality of work varies, it depends on the company, its own quality policy and recruitment. Responsibility is determined by the contract, often according to Chinese law and with the Chinese arbitration clause. Often work with a prepayment. Brand fame in some cases adds weight to the report. Sometimes intermediaries and freelancers are attracted, which can affect the quality of services.

In our opinion, the three aspects described above are the key to calm when working with China.