How does quality control work for importers?
Posted by Renaud Anjoran on Tue, Dec 28, 2010
An first-time importer asked me this question yesterday:
How does quality control work? The two things I am worried about are importing faulty products and the supplier taking my money and not shipping at all.
And here is my short response:
There are several ways you can link the payment to effective shipment of the right products. How are you paying the supplier?
By bank wire with a 30% deposit? If so, you can probably negotiate to wire the remainder after shipment (the supplier faxes the bill of lading to you, and then you do the wire). This is how you know if the shipment was done.
Or by letter of credit? Then you don't have to worry if the shipment will be done.
The second issue is, how to ensure that the products are up to your specifications?
You might trust the factory's internal QC system (and also trust that production was not sub-contracted). This is highly risky.
But the better way is to work with a quality assurance firm that will send an inspector on site.
What does it mean in practical terms?
- If you pay by bank wire, you should transfer the final payment after you see a passed QC report.
- If you pay by letter of credit, you should include a request for a certificate of passed inspection from your nominated QA firm.
Does it make sense?