What to Check in China Sourcing Terms Before You Pay

Separate the roles before you approve an order

A China purchase can involve MedinChina, a manufacturer, an inspection company, a freight forwarder, a carrier and an insurer. MedinChina may coordinate these parties without becoming the manufacturer, physical carrier or regulatory authority in the destination country.

The contract should make the scope of each role clear. Supplier responsibility for manufacturing and product conformity is different from MedinChina’s responsibility for the sourcing or coordination services it has agreed to perform.

• Name the supplier and the legal entity providing the service.
• Write the service scope and project documents that apply.
• Identify which party handles production, inspection, transport and claims.

Read the quotation as a cost map

A quotation can contain separate amounts for the goods, MedinChina’s fee or commission, additional services and third-party costs. Check the currency, what is included, what is excluded and whether bank or exchange charges can change the amount you pay.

A service fee pays for work such as research, negotiation, coordination, verification or follow-up. If that work has already been performed, a later supplier problem does not automatically make the service fee refundable.

• Check goods value, service fees and third-party costs separately.
• Confirm the currency, exchange-rate method and bank charges.
• Ask what happens to each amount if the order is cancelled.

Approve measurable specifications and samples

The product description should be specific enough to compare a sample and a production batch. Include materials, dimensions, tolerances, colours, models, quantities, packaging, labelling and required certifications where relevant.

If a sample is approved, the contract should say whether it is the reference for production. Raise changes before payment or production because a change can affect price, lead time and the supplier’s obligations.

Define the inspection before production

An inspection has a scope. It may be a factory visit, during-production check, pre-shipment inspection, loading check, technical test or independent laboratory test. The method, sample, defect limits and response to findings should be agreed before the visit.

An inspection can identify certain problems before shipment but does not guarantee every unit or eliminate hidden defects. If the product needs specialist testing or certification, use a competent independent body.

• State who performs the inspection and what it covers.
• Agree how defects are classified and what happens after a failed check.
• Leave time for correction and reinspection before shipment.

Confirm Incoterms, insurance and import duties

Transport responsibility depends on the Incoterm, transport contract, carrier conditions and insurance. A sourcing coordinator is not automatically the carrier. Make sure you know when risk transfers and who must open a transport claim.

Unless a project says otherwise, destination-country customs duties, taxes, clearance, port charges and import obligations remain with the client or importer.

• Confirm the Incoterm and the transfer of risk.
• Decide whether cargo insurance is needed before shipment.
• Check import, tax and certification requirements in the destination country.

Keep a clear path for claims and refunds

A useful terms document explains how to report a product problem, what evidence is needed and which party decides the remedy. Keep photographs, videos, packaging, quantities, delivery records, inspection reports and approved specifications together.

When a supplier accepts a refund and the funds are actually recovered for the client, those funds are returned under the applicable terms. The supplier’s acceptance is not automatic, and supplier refunds remain distinct from fees for services already performed.