I got an interesting question today, by email:

I appointed an inspection company, the result was failed. But I needed the goods, so I let the Chinese supplier ship them to me. In this case, what can I do? Can I ask for compensation?

And below is my response… In several steps.

What kind of issues were noticed by the inspector?

An inspection can be failed for many reasons, but for simplicity let’s distinguish two cases:

1. There were too many visual defects. If this is the case, the supplier can quickly sort the defective pieces out, and maybe repair (or reproduce) some of them. It can probably be done quickly by the factory. See “What to do before letting the supplier ship?” below.
2. The issues noticed by the inspector concern a large portion of the products and cannot be repaired (for example, all the goods are too small). If the products cannot be sold by the importer, he should not allow the shipment, and the supplier should quickly re-produce. Of course, this is easier said than done. If the goods can be sold, the buyer might be able to ask for a discount.

What to do before letting the supplier ship?

If you asked for a rework (or sorting) job and you want to make sure it was done, ask for a re-inspection, and re-invoice it to your supplier. This  second inspection probably only takes one day.

If you don’t even have the time for a re-inspection, you can also send an inspector check the rework (or sorting) job before the goods are packed and shipped out. It creates no additional delay.

If the two options above are not feasible, you should put as much pressure as possible on your supplier. For example, ask for a letter of guarantee and mention specifically the types of defects or non-conformities that you don’t want.

In any case, don’t try to find a solution after shipment… A Chinese supplier knows that you can’t send the goods back to him, especially if they are defective. Buyers should be prepared for it.

Being in position of strength

In these situations, a buyer had better be in a position of strength. For example, a supplier who expects many orders to come in the future and who has not received the payment in full is more enclined to accept the buyer’s conditions. Conversely, if the supplier knows that the importer has to deliver the goods his own customer urgently, he will probably do nothing and wait… until the buyer allows the shipment!

Therefore it is important for buyers to tie payments to quality acceptance, and to send the right signal: quality cannot be negotiated, and it is more important than in-time delivery.