Quality Control: What to Know When Importing From China

Transcript

Liz: Hi, everyone. Thanks for coming to this evening's webinar. I'm Liz Fickenscher, I'm in business development here at eComEngine, and I'm very excited to introduce Meghla from Global Sources, who's here to talk about quality control when importing from China. First, I'm going to tell you just a little bit about eComEngine and then I'll turn it over to Meghla who's going to share some really great information with you.

Liz: Some of you know us already. You may be familiar with, or use our FeedbackFive, RestockPro or eComSpy. You may have attended one of our past webinars. We're committed to the success and the education of sellers on the Amazon marketplace. And that's why we bring you webinars like this. That will help you learn new tips that will help you in the eCommerce business.

Liz: But enough about us, Meghla is here with me this evening and she has a lot to go over with you. She has 15 years sourcing experience and we only have about an hour. So I'm going to turn things over to her now. Remember to post questions in the question box of GoToWebinar, and we'll do Q&A at the end. This webinar is being recorded and I'll send a recording to you tomorrow morning. Meghla, are you ready to go?

Meghla: Yes, I'm ready Liz.

Liz: Take it from the top.

Meghla: Okay. So as I was saying, today we're going to be talking about what eCommerce sellers should know about quality control when importing from China. So let me go over the agenda real quick. So first of all I want to talk about what quality means when you're sourcing from China, then we'll go into the most common causes of quality issues and the best ways to conduct quality control when importing from China. I also want to talk about the different types of product inspections that can be done in China, and finally, I'll describe the concept of quality fade and I'll explain why it happens. Okay. So let's dive right in.

Meghla: So, first of all, let's talk about the definition of quality as it relates to manufacturing. So we have to understand when sourcing from China there is no real universal definition of "good quality". There is really no such thing as good quality or bad quality. This is because good quality means different things to different people. What the production manager of a Chinese manufacturer considers to be good quality maybe very different from what you as a buyer or your customers have in mind. So in manufacturing, good quality is defined as conformance to requirements. And as a buyer, it is up to you to clearly define your requirements. Manufacturers are not really mind readers. If as a buyer, you don't provide the supplier with crystal clear product specifications, you're making it very difficult for them to manufacture items according to your quality standards.

Meghla: So we also have to remember that Chinese suppliers deal with customers from different countries around the world and different buyers have their own quality standards. And not only do quality standards vary, but things like safety regulations and testing and certification requirements, also vary by country. The Chinese manufacturers cannot be expected to know the regulations of each and every country. So as a buyer, you need to know, and you need to specify the requirements required by regulations in your country. So, product quality is defined entirely by product specifications. And this includes things like, materials, components, functions, dimensional tolerances, and many other things that apply specifically to your product.

Meghla: Okay. So what is quality control in manufacturing? Quality control is a set of procedures intended to ensure that a manufactured product adheres to a defined set of quality criteria or meets the requirements of the client or customer. So in other words, quality control is a means to ensure the product meets the specifications that you as a buyer defined when placing the order with your supplier.

Meghla: Okay. So let's take a look at the common quality problems sellers can expect to face when they're sourcing from China. So the most common problem I've seen over the years is improper labels. The mistake can be as simple as a spelling error on a label, and it can be a missing piece of important information that is required by regulation. So to give you an example, for all apparel being imported into the US, the label must include things like the name of the manufacturer or importer, the country of origin, fiber content and care instructions.

Meghla: So labeling is very strictly regulated in most countries and it should be given a lot of attention. It is possible for your shipment to be denied entry by customs if labeling requirements are not met. Also, labeling is very complex and the rules vary from product to product and country to country. So, some of the more common labels in the US are controlled by CPSC, which is the Consumer Product Safety Commission, and the FDA, and also the Office of Textiles and Apparel or OTEXA.

Meghla: Another common issue that I see importers facing is packaging not done right. This is especially critical if you're selling on Amazon. So for example, the supplier might not have put the shipping labels on the correct place on the carton, or they might have used packing materials that are not allowed by Amazon. So, for example, Amazon's approved packing materials include, foam sheets or cushioning air pillows, bubble wrap and sheets of paper. But there are some packing materials that are prohibited, such as crinkle wrap or shredded paper or thermocouple chips.

Meghla: Another common set of issues is related to the appearance and cosmetics of the product. For example, the supplier might not have used the correct color on your product, or the logo might be distorted, or there might be smudges or scratches on the surface of the product when you receive it. In such cases the product might still work properly but the issue is that it doesn't look like what you had hoped it would.

Meghla: Lastly, product safety requirements are also not met. And this is also cause for major concern, especially for products that come into contact with the skin, or are ingested, or are used by babies and children. So it's really important that your products fully comply with all applicable product safety laws. Importing products that don't meet safety requirements can have severe consequences such as your orders being seized or high fines, and in the worst case causing harm to your customers.

Meghla: So in the next few slides, I have a few examples of common quality issues. So, if you look at this label on the garment, on the left, it has a sentence, fruit salad is a healthy snack, written on it, and on the right is a label that says, do not feed after midnight. I don't know what the supplier was thinking. On this slide there are some examples of packaging not done right. So the box on the left has been overstuffed and the product is at risk of being damaged during transportation. On the right, as I mentioned earlier, Amazon has specific guidelines for what can be used as packing materials, so you need to be careful about that when importing from China.

Meghla: Okay. So let's talk about what happens when your supplier doesn't meet your specifications and requirements. In other words, how can poor quality affect your business? So, first of all, rework costs. If a defective product ships, you might have to ask the supplier to rework the product to correct the defect, or if you've already received the product in your country, you might have to rework it there. Poor quality can also result in lost sales on Amazon or on your own website, especially if you're out of stock on a product that's selling well.

Meghla: Also product returns. So defective products might be returned by your customers and this could also result in low ratings and bad reviews, which of course, I mean, Amazon is the most devastating of all. Lastly, if safety requirements are not met and a customer sustains an injury while using the product, you can be sure that will not end well for your business. So, in a nutshell, your sales, your profit, your business is at risk if you're receiving bad quality products from your supplier.

Meghla: All right. So now let's talk about the most common causes of quality issues when importing from China. Many eCommerce sellers are surprised when I tell them that miscommunication is the number one reason for most quality issues. They do not believe that your supplier understands your specifications and your expectations clearly after they've been told just once. So for one, you're most likely communicating with someone who doesn't speak English as their first language. And secondly, you're most likely talking to the salesperson at the factory, who in turn has to communicate your requirements to the production manager. And it's not uncommon for things to get lost in translation or requirements not clearly communicated to workers on the assembly line. And many a time the sales rep is somewhat removed from the assembly line, they're based in a different office altogether.

Meghla: It's also possible that the sales representative lacks manufacturing experience. So very often, suppliers hire sales staff for their ability to communicate in English. This can cause problems and things can get miscommunicated when you're trying to convey product specifications to factory staff through the sales rep.

Meghla: Another issue is unclear instructions from the buyer. So let's say you want a yellow widget with a red flag on it. So, have you specified which shade of red you want? There are literally thousands of shades of red. So you need to be very clear about which specific shade of red you want on your yellow widget. And then if you're placing an order for a shirt, have you sent them clear instructions of the text that needs to go on the labels? The size of the label. The material to be used for the label. How it should be attached to the garment. Where it should be attached to the garment. Et cetera.

Meghla: Another issue is unclear product and QC specifications. So this is another common cause for quality related problems. For example, the buyer might not have indicated what specific type of finishing they want on a product. And in such a situation, the supplier is likely to use the finishing that cost them the least. It's also possible that the sales rep is not familiar with your product and might not understand the technical details or requirements of your product. So keep this in mind as you place an order with your supplier, miscommunication is the reason for most quality issues. We'll talk a little bit later about what you can do to minimize miscommunication with suppliers.

Meghla: So cultural differences can also cause quality issues. Sometimes your supplier will tell you what they think you want to hear, even if it's not the truth. And this can happen when the sales rep is trying to sell you on an order. For example, they might say they can produce a certain product in house just to get your order, even though they actually cannot. And then once you've placed the order, they will subcontract to another factory that may or may not understand your requirements clearly. Sometimes sales reps might promise you shorter delivery times than they can manage.

Meghla: Another cultural norm in China that can often affect quality is the concept of saving face. So suppliers are sometimes hesitant to admit when they don't understand your requirements because they're afraid of appearing incompetent. This might also discourage them from asking questions when they're unclear about your requirements.

Meghla: Another reason for quality issues is buyers pushing for lower prices. So when you try to pressure your supplier on price, it is possible they will try to cut corners and that might impact the quality of your product. For example, if you're ordering, let's say a metal spatular, the supplier might reduce the thickness of the metal that they use on the product, and that might ultimately impact the performance of the product. Or if you're ordering something made of wood, the supplier might not treat the wood properly, which could result in the wood warping over time. Also sometimes even when there is no price pressure from buyers, suppliers might cut corners to increase their own profitability. Especially if you are a new Amazon seller placing orders of only a couple of $1,000 at a time, suppliers are more likely to do this.

Meghla: Another issue is mass production without approving a product sample. So, if you've given the go ahead for mass production to your supplier without approving a product sample first, quality issues might start emerging after mass production begins. This is especially important when you are developing your own product, or when you've asked the supplier to make significant changes to an existing product from the suppliers catalog.

Meghla: So I'll cover inspections in detail later in the presentation, but skipping product inspections before shipment, in my view, is a big mistake. Spending a couple of $100 on an inspection can actually save you a lot of trouble later on, because once the shipment arrives in your country, if there are major issues with the product there's not much you can do at that point to rectify the issues.

Meghla: So, these are the common causes of quality issues that I've seen over the years working with importers and suppliers. It's really important for you as a buyer to be aware of these pitfalls and avoid these mistakes as you place your orders with your China supplier.

Meghla: Okay. So, I'll now talk about what you can do to control the quality of your products when you're sourcing from China. So, one of the main reasons for quality issues is miscommunication, therefore you must make an effort to improve communication with your suppliers. There are a couple of ways to do this. So first of all, all of your product specifications, technical details and other instructions to the supplier should only be communicated via a product or QC checklist. Avoid giving them information in multiple emails. Sales reps at factories are often dealing with multiple clients at the same time, and it's very easy for them to miss an email or two from buyers.

Meghla: It's also very important to keep your communication clear and simple. Whether you're sending an RFQ, which is a request for quotation, or if you're asking for pricing information, keep your language simple and keep your sentences very short. Avoid using slang or technical jargon as that might not be understood by the sales rep. So, yeah. Then keep emails simple. Try cover one subject in an email, instead of trying to cover too much ground in a single email. You can also follow up emails with a phone or a Skype call. Chinese people who can speak English tend to be more comfortable with written rather than spoken English, but it doesn't really hurt to call your supplier after you've sent an important email to confirm that they've understood your requirements. Also, the representative might be more open to asking any questions they might have when you're talking to them on the phone or over Skype.

Meghla: You could also consider bringing a translator with you if you're visiting the factory. So, many buyers source products from China without ever visiting the factory. And that's okay, but if you do plan to visit the factory, you might want to consider bringing a translator. This could especially be useful if you want to talk to the production manager or to the assembly line supervisor about your technical requirements.

Meghla: If you haven't already done so, you should definitely download WeChat. This app is very useful in case you want to contact your supplier quickly. So, this is a free app, just like WhatsApp, and it's very commonly used in China. But of course, WeChat and email should not be used to communicate product specs and instructions with your supplier. You can use this means of communication to ask questions or clarify your doubts. And then there should be one document that lists all of your requirements and all of your specifications, and that's the only document that the supplier will need to reference when they're producing your product.

Meghla: Okay. This is probably the most important thing you can do to control quality, give detailed product specifications to your supplier. At the link over here on this slide, there is a product specifications template that you can download. So you can work directly with your supplier to create this document. This will help ensure that the supplier clearly understands your expectations. Never let your supplier fill in the gaps.

Meghla: So a product specification list must be very comprehensive, and it should include everything related to product design, functions, materials that are to be used on your product, tests that need to be conducted or certifications that need to be met. It should include things like labeling requirements or packaging details. Really nothing is too small and unimportant to be left out. So when you're sourcing from China, don't take anything for granted and don't assume that the supplier should know.

Meghla: So let me give you a few examples of how you can communicate clearly to your supplier. So if you only tell you a supplier that they should use a blue fabric, you may get any shade of blue. So what you should do instead is provide the specific Pantone code for the color that you want on your product. Secondly, if there are industry terms that are used to describe certain functions or features of a product, describe them at the outset and ensure that the supplier has the same understanding as you. So, detailed product specs document will minimize the chances of the supplier cutting corners because of unclear instructions.

Meghla: Another thing to do is avoid using the word, it, when you're in your product specifications template, because this can potentially cause confusion. When you're describing your expectations in your product specifications document, it is better to clearly specify what you're referring to in the text, even if you end up repeating yourself.

Meghla: So, another thing to consider is, you should mention the specific conditions under which your product must meet a specific standard or pass a specific test. For example, if you want your product to work in extreme temperatures, specify the minimum temperature clearly, and don't just say it should work in a cold climate or something vague like that. You can also try to keep someone on the production floor in the loop. The supplier might be hesitant to let you communicate directly with the factory staff, but they'll be more open to it if you visit the factory or if you have a technical product that has very specific requirements. And then you can also go a step further and get a manager to sign and stamp your product specifications document.

Meghla: So, creating a detailed product specification document is especially important if you're developing your own product, or if you're requesting significant changes to an existing product that the supplier has, or if your product is technical with a lot of moving parts, or there are strict safety requirements that need to be met.

Meghla: Another thing that you can do to conduct quality control is tell suppliers early on that you will be doing a product inspection. This really helps minimize problems later on. You can include this in your purchase order, and if possible you can also tie payments to inspections. So what this means is that 30% of the payment can be paid in advance and the remaining payment can be done after the pre-shipment inspection is done. When you owe money to a supplier, it is much easier to get things done. So try to settle the final payment after an inspection is passed and after the goods are shipped out. And this is standard in the industry, so you should not hesitate to require this from your supplier.

Meghla: Another thing to do is just clearly tell your supplier to keep you informed. Tell them clearly you want to know if there are any requirements that they can't meet. They already know this, but explain to them that you need to manage your customers quality expectation, and that you want to hear about problems as soon as they are identified. Also encourage your supplier to ask questions. Simply ask them along each step, if they have any questions or concerns, or they need clarification on certain issues. Talking to them over Skype after sending an email can also help encourage them to ask questions.

Meghla: Another thing to do is, give the factory and the QC inspectors an approved sample for comparison. So these are also called golden samples, and they're usually produced before production starts. So one sample should be sent to the inspection company, and then one is kept with the factory for their reference, and another can be kept with the client.

Meghla: Another thing to do is during inspections, make sure the inspectors are checking the right quantity of units using AQL or acceptable quality levels. So using AQL you can check whether the order meets your quality requirements without having to check every unit of the entire shipment. So the AQL table helps inspectors choose a statistically significant sample for inspection. It also tells you the number of defects that would be acceptable in that sample. You can use an online AQL calculator to find the correct sample size based on your order quantity and your quality expectations. Just go to Google and search for AQL Calculator.

Meghla: So, to summarize, there are a number of steps you can take to minimize potential quality issues, and the most important things that you can do are improve communication with your supplier and provide them with very detailed product specifications.

Meghla: Okay. So next I want to spend some time talking about the different kinds of inspections there are, and briefly go over the advantages of each inspection type. So there are four main types of product inspections that are done in China. The first is Pre-Production Inspection, then there's During Production Check, the third is Container Load Check, and then Pre-Shipment Inspection.

Meghla: So let's talk about Pre-Production Inspection first. So, what exactly is Pre-Production inspection? This is sometimes also known as Initial Pre-Production Checks or IPC. This is usually carried out before production of your product starts. For this inspection, components and materials are inspected to make sure that they match the buyer's specifications and requirements. Assembly instructions are also checked to make sure that product specifications can be met using the assembly procedure to be followed by the supplier. So, this type of inspection prevents issues during production and it makes is difficult for suppliers to cut corners because using substandard materials or components is the most common way that suppliers cut corners.

Meghla: So, the second type of inspection is During Production Inspection, it's also called DUPRO. This takes place when 10 to 50% of the goods are completed and packed. So, units are selected randomly from the production line and they are compared to the buyer's product specifications. The main advantage of this type of inspection is that production errors or quality defects can be caught early on, and they can be reworked at the factory. And corrective action can be taken before production is finished. This also helps keep production on schedule. But DUPRO is more time consuming and of course it adds to your overall production cost. So DUPRO is ideal when you're placing a large order and your product has a lot of moving parts or when you're working with a new supplier.

Meghla: The third type of inspection is Pre-Shipment Inspection, and this is also known as Final Random Inspection sometimes. This is usually done when 100% of production is completed and 80% of the goods have been packaged. So, this is when your goods still have the chance of being repaired, and it makes it harder for your supplier to hide defective goods. So, it's better to perform Pre-Shipment inspections at least two days before the actual shipping date, so that you have some breathing room in case your goods fail inspection and require reworking.

Meghla: So what's checked during a PSI? So first of all random samples are checked against product specifications provided by the buyer, such as the size, color, functions, et cetera, of the product. Secondly, labeling and barcodes are checked. The condition of the cartons is checked to make sure they're sturdy. Drop tests are done on cartons and packaging. And of course the sample size is based on the AQL table. So one tip here is to provide your inspection agent with your product specifications sheet. And they can use that sheet as a quality checklist to ensure your product requirements are followed.

Meghla: So what are the advantages of doing a Pre-Shipment Inspection? So first of all, PSIs are the most popular option for Amazon and eCommerce sellers sourcing from China. They help ensure the goods being sent to you are what your factory promised to deliver. This is really the last chance to check and make changes before your products are shipped. If you don't conduct an inspection, you won't really know if your supplier sent the right goods, matching your specifications, until your product arrives at your destination, or maybe goes into the hands of your customer. So another thing that can be done is, payments can be tied to Pre-Shipping Inspections, and this gives you good leverage over your supplier.

Meghla: And then the fourth most common type of inspection is Container Load Check or CLC. So this type of inspection is usually done once production is complete and your goods have been packed and loaded into containers and they're ready for transportation. So once again, what's checked here, we have specifications for labeling, barcodes, packing materials, are all checked to make sure that all of these things match your requirements. So this can also be a good option if packaging is really important for you. So in terms of what's checked, the condition of cartons, labeling, barcodes, the quantity of goods that are being shipped, as well as the condition of the container.

Meghla: Some of the advantages of a Container Load Check are that it helps ensure products won't be damaged during transportation. Inspectors can check that the goods are properly loaded into the container, because improperly balanced and loaded containers can result in damaged goods. So this inspection is ideal if you plan to ship a container full of, let's say fragile or mixed weighted goods. But a big disadvantage is that nothing can really be repaired during the stage, and inspectors can only check a few random samples, meaning the samples may not represent the overall quality of your shipment.

Meghla: So to summarize, importers sourcing container loads of product from a supplier would typically conduct all types of inspections. But if you're ordering smaller quantities, at the very least, you should get a Pre-Shipment Inspection done.

Meghla: Okay. So what to do if your Pre-Shipment Inspection fails? So the first thing is, don't panic. What you want to do is understand the nature of the problem and try to get to the bottom of the issue. It's possible that the defects found are acceptable to you, especially if they don't affect product performance that much. So, what you want to do is get in contact with your inspector and your supplier and try to determine the severity of the problem. You should try to get pictures from the inspector and go over the results with your inspector and with your supplier. And then once you have an understanding of the issue, prepare an action plan. Decide whether or not the quality issues are acceptable to you.

Meghla: So what are the options that you have? One option is to reject the shipment altogether if the issues are critical. But the supplier might resist this, especially if your product specifications were not clear in the first place. This is why it's really so important to get your product specifications clear before you place the order with the supplier. Don't leave anything to chance. The second option is to ship the goods but insist on getting a discount from your supplier. Another option is to rework the goods, sought out all the defects and then get the supplier to do a re inspection before the products are shipped again. And then lastly, you want to make sure that you can implement improvements for future orders. Once you've identified the issue, talk to your supplier about what measures they can take to avoid the same issue in future orders.

Meghla: Okay. So this is the last section of today's presentation. I want to talk a little bit about the concept of quality fade. So quality fade is actually one of the biggest issues in sourcing from China and in fact other low cost countries as well. So what is quality fade? It's defined as a decline in product quality over time. For example, let's say you've been importing yoga mats from a supplier for a few months, and after the fourth shipment, you start receiving complaints of creasing or cracks on your yoga mats from your customers, that's the sign of quality fade.

Meghla: So quality fade usually starts when the supplier or subcontractor starts using a lower quality material or component than was agreed upon. So the product might have the same appearance but issues with a particular aspect of the product start emerging. Suppliers usually do this to cut costs and increase their profit margins. Using cheaper materials is the most common way to cut costs in China. So when does quality fade usually start? It usually starts after a few shipments, when the supplier has gained the buyer's trust.

Meghla: So why does quality fade happen? I think as many of us importing from China understand, profit margins in China are very thin, and suppliers are always looking for ways to cut costs and improve their own profitability. And how else would they buy the latest sports car for their son or daughter. So after a few shipments the supplier has gained your trust and they think they are being scrutinized less by you. Quality fade also happens when the supplier starts outsourcing your products to other factories, and quality control measures at these other factories might not be very robust.

Meghla: In some cases, the supplier will take shortcuts and compromise quality if they want to avoid delays in production. This is common around long holidays in China such as Chinese New Year, when suppliers are rushing to complete orders before their workers go on leave.

Meghla: So, what can you do to minimize quality fade? So first of all, keep your product specifications and QC checklist updated, so suppliers don't have an excuse when they're caught using substandard materials. As I mentioned previously, a product specifications sheet will hold the supplier responsible to the standard they have agreed to. Second, you should inspect each and every order before it is shipped. So Pre-Shipment Inspections can really help you catch quality fade related issues. Suppliers are much less likely to cut corners if they know you're going to inspect the orders. And then you should also hold suppliers liable for defects. Try to establish accountability for quality issues and tie payments to inspections, and quality issues found in your products. You could also consider including financial penalties for quality problems.

Meghla: Another thing to consider is, you might want to source from more than one supplier. This will ensure all your eggs are not in one basket, and you can switch production to another supplier if you start seeing quality fade in products from one supplier. Lastly, consider checking incoming raw materials and components, especially if you've had issues with raw materials and components in previous shipments. This is especially important for products such as electronics that have a number of components and a lot of moving parts.

Meghla: Okay. So, that's my presentation for today. I want to spend a couple of minutes quickly talking about Global Sources and what we do. So Global Sources helps global importers find and meet reliable exporters in China and the rest of Asia. We've been doing this for 45 years. We were established in 1971. We started with publishing magazines, and in the late '90s we launched our website. We also host trade shows in Hong Kong every April and October.

Meghla: So, how do we help importers who want to source products from China? One, we have an online supplier directory at global sources.com, where you can find suppliers and products from China and other countries in Asia. Second, we host sourcing trade shows in Hong Kong every April and October. We also host a conference for online sellers called Global Sources Summit. This conference is co-located with our exhibitions in Hong Kong. So, because the conference is co-located with the exhibition, if you're an Amazon seller, you can attend the conference, learn all about sourcing, about selling online, and then at the same time you can meet with thousands of suppliers on the show floor.

Meghla: So today we have a special offer for eComeEngine viewers. If you want to attend the Global Sources Summit in Hong Kong, you can use the code ECE100 for $100 off the ticket price. All right. That's it for me, Liz. Over to you.

Liz: Wow, Meghla, that was awesome. Thank you so much. Additionally, we've got a coupon code, that I seem to have erased, but I will definitely send it to everybody who's here today. But you can get an extended free trial on FeedbackFive or RestockPro or both, or 150 free credits on eComSpy, just by using the coupon code, global. I will definitely send that out via email. Sorry about that.

Liz: So, we have time for a couple of questions. If you've got questions that you haven't typed into the GoToWebinar questions panel, now is the time, because we only do have a couple of minutes and we have a couple that we need to get through first. So Meghla, the first question we have is from a friend of ours, and he says, "When I design a product with my own drawings and customize it to my specifications, but a Chinese manufacturer creates the mold that I pay for, in order to produce my product, who owns that design and mold that I paid for? So should I wait for the type of documents I asked for the manufacturer to sign to make sure I own the design and mold, so they do not make and sell my product to other sellers?

Meghla: Absolutely. So, if you're designing your own product, and you're getting your mold manufactured, it totally makes sense to own the mold. One of the things that you can do to prevent the supplier from giving out the mold to other buyers or manufacturing the product themselves, is get your logo etched onto the mold. So, that will make sure that, if the supplier does give up your mold to somebody else or manufacture products themselves using your mold, at least your logo is there on the product. But definitely make sure that you own the mold if you have developed the product. You can also sign a contract with the supplier specifying that, this is your IP, this is your mold, and they cannot use the mold to manufacture product themselves or give it out to their other customers.

Liz: That's great advice. We have a question, what happens if there are critical issues with my shipment, but I was really clear in my product specifications, but the supplier refuses to refund me? Do I have any sort of legal recourse?

Meghla: So you do have legal recourse, but it's important that you signed a contract in the first place. If you did not sign a contract in the first place when you were placing the order, then there's nothing that you can really do. However, if you signed the contract that specifically stated, if the supplier does not meet your requirements, does not meet your specifications, they need to refund you or they need to give you a discount on future orders, and they've signed that contract, then it's easy for you to go back to them and say, "Hey, you agreed to doing this. Here's the contract." So I would suggest to, apart from your purchase order and your product specifications sheet, also sign a contract with your supplier before you place the order.

Liz: Super. Someone has asked if a good amount of suppliers will agree to a pay after inspection arrangement? Is that common or is it harder to find suppliers that allow you to do the pay after inspection type of arrangement?

Meghla: It depends. I think if you are a new customer for the supplier, they might not allow that. And if you're placing a very small order, they might not allow that. But it is common practice in the industry. As you start placing larger orders with your suppliers, you should definitely push suppliers to do that. And even when you're placing small orders, just try to ask the supplier for that, and it is very likely they will be agree.

Liz: Awesome. This person is asking about the culture of yes, the situation that you talked about. If they communicate clearly use short sentences, et cetera, is there a good chance that someone at the manufacturer will understand my instructions? And how I know for sure when this culture of yes thing is happening? I think what they're asking is, if somebody says, "Yes, sure, I understand," how do you know for sure?

Meghla: So, I think one of the things to do is to ask a lot of questions, ask a lot of follow up questions. So for example, if you want a specific type of polish on your product, and they say, "Oh, yes, yes, yes, we can do that, no problem." You can ask a lot, "Oh, have you done this before for another client? What type of machine do you use for this finishing? Do you subcontract this finishing? How much will it increase the product price?" And if you're doing this via Skype, you can tell if they're bluffing or if they're dodging your questions or if they're being vague in their answers. So, I would suggest for one, definitely ask a lot of follow up questions, keep the communication open. You can even ask them to explain back to you what your requirements are, to make sure that they've understood your requirements.

Liz: That's great advice. Oh, we had an attendee make a comment. And she says, "Thank you, I just had quality trade with a factory that I know and trust, I will not be complacent, and will hold them accountable as strictly as we did on our first order." So, we have somebody here who feels the pain of quality fade. We're sorry about that.

Meghla: Yeah.

Liz: Somebody asked, "I've heard horror stories about products from China having strong smells and the manufacturer refusing to do anything about it, how do I handle a situation like that?

Meghla: So it depends on the product. You want to make sure that you understand right from the beginning, what's causing the smell or what type of materials that the supplier might possibly use that might result in that smell. And then make sure to tell the supplier not to use those materials. One of the things that I like to advise people to do, especially if you're new to a product category, it really helps to attend a trade show. If you don't really understand what's important and what specific aspects can affect the quality of a product, go to a trade show where there are possibly tens of suppliers of one particular product. It's very easy and it's quick to get a good understanding of the product.

Meghla: So for example, you can ask to go and smell the products at the booths, right? And you can say, "Hey, this has a funny smell, what kind of materials do you use? And I want to avoid using this material and I want to avoid having this smell if I place an order with you." Sometimes if you don't know your product at all, if you're completely new to the product, it can also help to ask the very simple, dumb questions at trade shows. You go to one booth and ask all of the silly questions, where the supplier is looking at you and saying that, "Oh, I know, this buyer doesn't know anything about the product." But then you go to the next booth, and then you ask more intelligent questions, because the first supplier told you some of the basics of the product. So, yeah, I think it's really important to really understand the materials and the components that are going into your product.

Liz: Super. Next question is, do you have suggestions for people in China who can conduct quality checks on my behalf?

Meghla: Oh, absolutely. So there are a lot of inspection companies in China. And typically, the price of a Pre-Shipment Inspection can range from $100 to about $300 per inspection. And this is for one mandate. Usually most orders would take about one mandate, if it is a large order could also be two mandates. So, that would be 200 to $600 per inspection. But one thing to remember is that bribery is a very major concern in the inspection industry in China. So, I would really advise against going for the very low cost independent inspectors, because it is very likely they are getting a kickback from the factory to pass the inspection even if there are issues. There are a lot of independent inspectors out there that do inspections for 80 to $100 per day, but the more reputable companies are companies like Pro QC, then there's Asia Inspection. So Asia Inspection is kind of the higher end inspection company. So inspections from Asia Inspection cost about $300. And then there are second level companies like Pro QC, AQF is another one, Asia Quality Focus. So their inspections cost about, I think, 250 to $280 per day.

Liz: That's great information. We're right about time but someone commented and said, "Thank you for this. I'm also going through quality fade issues after two years. Wish I'd seen this a few years ago." So, we're sorry about your quality fade, but hopefully Meghla has given you all some tips today that will help you moving forward. I'll be emailing this recording to everyone tomorrow. Meghla, thank you so much. This has been tremendously helpful and really, really good. I know that I really enjoyed it.

Meghla: Thank you very much for having me, Liz.

Liz: Thanks for being here. And thanks everybody for attending and we'll see you at the next webinar. Bye