Checklist for importers who are manufacturing products in China / low-cost Asia

Many people come to us and ask: “What are the steps we need to take now that we have decided to manufacture our products in China/Vietnam/SE Asia?”

While no two manufacturing projects are the same, I’ve tried to distill the process into a checklist that covers 95% of situations for importers of consumer goods and simple industrial products here. (If you are simply picking an off-the-shelf product, you will need to ignore some of the points.)

Checklist for importers from China/Low-cost Asia

Here are the basics you should be on top of before importing products from China/low-cost Asia. If you can follow all of these tips then you’ll be in a far stronger position where your project will run more smoothly.

Describe the product you need

• Write down precise product specifications – this will be the basis of your quality standard

Identify and pre-qualify supplier(s)

• List potential suppliers that offer the right kind of product
• Communicate your standard terms (about payment, Incoterm, standard milestones…)
• Ask for a rough quotation
• Do a background check on the supplier and an audit of the factory

👉 Listen to our series of podcasts about vetting Chinese suppliers

Share product information with potential supplier(s) [for a new product]

• Ask the supplier to sign and chop an enforceable non-disclosure, non-use, non-circumvention agreement
• Share product specs with supplier(s)
• Send a sample/prototype to supplier(s), if applicable
• Get feedback about your product specs

Develop tooling with the chosen supplier, if necessary [for a new product]

• Find an initial price agreement
• Get a development agreement signed and chopped by the supplier
• If necessary, wire money

👉 Later on, you may need this information if you own tooling: How to move Plastic Injection Molds between China Factories [10 Tips]

Develop samples with supplier(s) [for a new product]

• Supplier sends a first prototype/sample made with tooling
• Client comments about it
• If necessary, supplier sends more samples
• Approval of golden sample
• Comments for production

Develop samples with supplier(s) [for a new labeling or packing]

• Same as above, for packaging materials (should be done in parallel)

👉 Read our guide to types of packaging for smaller products

Finalize product specs

• Confirm with supplier that product specs are correct
• If the product is new for this factory: place a small order for a pilot run and make sure there are no major issues

Confirm the order for mass production

• If not done yet, sign a manufacturing agreement (to be signed and chopped by the supplier)
• Make the product spec sheet an exhibit of that agreement
• Launch the payment process (transfer of deposit / opening of letter of credit)
• Remind the supplier to book the materials/components immediately

👉 You may find this blog post helpful: How To Create A Valid Manufacturing Contract In China To Protect Your IP

Comment on production samples

• Supplier sends samples taken from mass production
• Comment on samples
• If necessary, supplier sends samples again

Inspection/testing during production

• Share PO & share product specs with inspection firm/staff
• Get an estimate of the price/time necessary, and confirm
• Tell supplier about inspection plans
• Supplier proposes timing of inspection
• Get report & give feedback to supplier

👉 Examine inspections during production here

Book shipment with a forwarder

• Get quotes and compare them
• Confirm a quote
• Start tracking shipment with forwarder

👉 Understanding Incoterms will be helpful

Approve quality before shipment

• Share PO & share product specs with inspection firm/staff
• Get an estimate of the price/time necessary, and confirm
• Tell supplier about inspection plans
• Supplier proposes timing of the inspection
• Get inspection report & give feedback to supplier
• If necessary, proceed to re-inspection and issue a debit note to supplier

👉 See Sofeast’s product inspection solutions, including final random inspection and container packing & loading inspections

Shipment

• Forwarder advises closing date
• Authorize shipment
• Forwarder confirms the products were made available in time
• Forwarder confirms the products were shipped out
• Supplier sends a copy of the documents
• Confirm that the documents are all correct

👉 Logistics management can support you at this point

Final payment

• Check the quantity of shipped products
• If payment by bank wire: transfer the balance
• Supplier sends all original documents
• Confirm receipt of all original documents

Customs clearance

• Forwarder/agent applies for clearance
• Payment of import duties

Domestic transport

• Arrange domestic transport
• Confirm receipt of products

Warehousing

• Arrange sufficient manpower and space

👉 You can utilize our China fulfillment center for warehousing and shipping if it makes sense to keep some of the goods in China for some time

QC on incoming products

• Share PO & share product specs with internal QC staff
• QC service checks conformity & quality
• If necessary, give feedback to supplier and inspectors

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Do you have any questions or any points to add here? Tell us by commenting, please.

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