The usual process for third-party inspections of production is this:

• The buyer appoints an inspection firm and communicates the product specs;
• An inspector is sent to the factory with a sampling plan and a checklist;
• The buyer uses the inspection report to estimate whether the production can be sold on his market.

In this context, I can understand why most manufacturers do not like the idea of QC inspections (even though it is often in their long-term interest). When quality issues are noticed and then communicated to their customer, they have the same feeling as a driver who is arrested for speeding.

But, as long as the inspector is professional and reports the situation clearly, there is no reason to complain…

Except when the buyer refuses the goods, asks for corrective actions, and send an inspector again for re-inspection. Of course, this second inspection is at the supplier’s charge. Generally, they have to pay for all the consequences of their mistakes, including penalties for late shipment and/or for air freight.

The amount to pay for re-inspections

If there is only 1 day of work, and if the reason for rejection was very clear and legitimate, the factory can only complain that “it is expensive”. They compare the inspection cost to the salary of their in-house controllers, so even $100 would be expensive in their mind. no need to discuss.

If there are several days of work for the re-inspection, the supplier usually says that they will only pay for 1 man-day because “it can be done in 1 day”. It is really hard to explain why an inspector can only do so much in a day if we want his findings to be clear and reliable.

Another source of misunderstandings is the aborted inspection. Let’s say we send 1 inspectors to check 2 references, and only 1 of these references is presented. A few days later, we have to come back to check the other reference, but we could have checked it if the original planning had been respected. Many Chinese suppliers have a hard time admitting that it should be at their charge.

So all I can do is give a price, respond politely to the supplier, and make it clear that it is a quotation and NOT a negotiation.

How re-inspection fees are settled

The simplest way to settle re-inspection fees is this: the buyer pays for it, and then issues a debit note to his supplier. This way, it is deducted from payment.

Some of my clients prefer to force the supplier to pay my company directly. In that case, I usually ask for payment in advance (except maybe if the supplier seems reliable and is based in Hong Kong).

Chinese suppliers have all kinds of ways to signal their unwillingness to pay. For example they might say “we need your original invoice with your chop”, or “we can only pay in RMB, not in USD”, or “our manager is out of town, so we can only settle it next week”.

Fortunately, importers understand why I require payment in advance.

I am really glad I don’t sell to Chinese companies. Giving credit to customers is pretty common here, and you never know when you will get paid…