Understanding the cost of quality inspections in China
I am always surprised by the expectations of some importers regarding the cost of quality inspections in a Chinese factory.
Some importers get to talk about their project for some time, see where we would help them, and finally (almost as an afterthought) ask: “How much does a quality inspection in China cost?”
The 2 categories of buyers when it comes to quality inspection costs
I say “299 USD per day of work”, and I can nearly hear some buyers thinking “wow these guys are cheap”.
They compare this fee to the costs of professional services in their country, or maybe to the total amount of the order, or to the cost of their best alternative (taking a flight to China). So it sounds really low.
However, with others, it’s the exact opposite. In their minds, even 100 USD would be a rip-off.
They compare it to the salary of a typical English-speaking employee in China (6,000 RMB), they divide it by 30 days, and they think we make an insane margin. Forget about the main costs of a company that has set up a network in the main regions (training/supervisory/internal control overhead) travel expenses to factories, client communication, taxes and social security, etc.
Buyer 1 is prepared to pay a bit more for better service and higher reliability
The first category is ready to pay more for better service and higher reliability. They tend to be medium- or large-scale companies, or they have developed their own product and getting all the details rights is what helps them charge a premium. They allow quality assurance firms like ours (Sofeast) to exist.
They want to make sure they are paying fees within the market band (i.e. not twice as much as their competitors). They are looking for convenience, reliability, and speed, more than a ‘great deal’.
Buyer 2 wants the ‘best deal’ and is prepared to take more risks
I learned that the second category of buyers will never accept to pay the market price for quality control inspections unless they absolutely have to. They prefer to roll the dice and let the factory ship out. In some cases, if they work with a ‘sourcing agent‘ who spends 20 min looking at a few products and taking a few photos, it is already plenty.
Is it rational? Not always. Are they worse off? Sometimes. If they buy off-the-shelf products that are purely decorative (or to be given away as part of a marketing campaign), that might make sense!
Breaking down how much quality inspections cost and what’s included in a ‘man day’
So why the figure of 299 USD for 1 man-day of work (which is sufficient for a good number of random inspections)?
- Studying the client’s documents and the checklist — 15-30 min
- Going to the factory — this is 1-2 hours on average
- Introduction, opening meeting, going to the warehouse — 10 min
- Counting the quantity, doing proper sampling, getting the picked samples to the inspection area — this is 30-45 min on average. It varies from 10 min in the best case to half a day in the worst case. I explained all this in ‘Sampling Is an Important Part of a Random Inspection‘.
- Inspecting the outer packing, the inner packing and the unit packing (if any), and the product, including time-consuming tests and visual check — about 4 hours of productive, focused work
- Eating and waiting during the factory’s lunch break — that’s easily 90 min, during which they don’t want an inspector to work alone without ‘supervision’
- Jotting down notes along the way, then explaining the findings to the factory representatives and defending one’s logic — about 15 min
- Coming back from the factory — again, 1-2 hours on average
- Preparing the draft report, including clear comments and many photos — 1 hour on average
Travel expenses might also apply, on top of the cost of labor, if the factory is far away from the closest importer. Let’s take 3 typical examples:
- If the trip is only 60 km, it is included in the price.
- If the trip is 120 km, an extra 50 USD might be charged.
- If the trip is 400 km, an extra man-day might be charged (at half price) and an extra 100 USD might apply.
(Exact costs are quoted on a case-by-case basis, depending on transportation options available. Contact us at Sofeast if you’d like to discuss quality inspections now.)
What to do if you’re operating on a small budget?
Here are a few alternatives:
- Ask the supplier for many photos, and maybe a live video (easy with Wechat) showing many photos.
- Ask the supplier to send you a few samples taken from production.
- Maybe buying ‘China direct’ is not something you can do while keeping risks low, and you need to work with a wholesaler.
How do QC inspections usually work in practice?
Let’s say you buy a batch of widgets from a Chinese supplier. You notice, as they prepare and send samples to you, that there are misunderstandings and some lapses in quality. It makes you a bit nervous.
You choose to work with an inspection agency. What is the minimum they will do? A FRI (Final Random Inspection), a few days before shipment. That’s the right time to count the quantity, ensure that samples are picked randomly from the whole batch, and check those samples. If your requirements are not met, or if the quality is not consistent, the inspector’s report will show it.
How to arrange/set up a quality inspection in China (step-by-step guide)
Let’s say you want to arrange a quality inspection of your products in China. What do you need to tell the QA agency that will do this for you?
- Supplier contact information, and if possible factory address (otherwise, they will ask the supplier for it)
- Description of the product, with photos and maybe a short video
- Description of the packing & packaging
- Indication about your quality standard, what you can/can’t accept
- Quantity breakdown (for example, if there are several models, sizes, or colors, they will need to know)
What is our conclusion, knowing all this?
Our main target is companies who have developed their own product. In the QA department, we help them get better organized, specify what their QC checklist is, and take better advantage of QC inspections.
And those buyers who always look for the best deal? We let them choose the cheapest suppliers and run the highest risks. They are not a part of our client base … We are just not a good fit.
I also wrote about how much a Chinese inspector costs, so take a look at that post for even more information around this topic, but rather focused on the individual quality inspector this time.
Editor’s note – this post was originally published in 2010 and has been updated with up-to-date information in May 2019.
Watch this video and learn how to improve management of quality from Chinese & Asian suppliers