FAQ: Procurement
Procurement FAQ.
01: Supplier Sourcing
Supplier Sourcing
Where do I find reliable suppliers?
Trade shows (Canton Fair, Spring Fair), B2B platforms (Alibaba, GlobalSources), industry directories, and referrals from other operators. Never rely on Alibaba alone. It favours marketing spend over quality. The best suppliers often don't have English websites. Consider hiring a local sourcing agent for your first order.
How do I vet a new supplier?
Request business licence, factory audit report, and references from existing buyers. Order samples from 3-5 suppliers before committing. Visit the factory if the order value justifies it. Check if they're a factory or a trading company: trading companies add a margin layer but can offer more flexibility on MOQ.
Should I use a sourcing agent?
For first-time importers, yes. A good agent handles factory communication, quality inspection, and shipping coordination for 5-10% of order value. They prevent costly mistakes and can negotiate better terms than a foreign buyer approaching directly. Get recommendations from other operators, not agent directories.
02: MOQ & Terms
MOQ & Terms
How do I negotiate lower MOQ?
Offer a higher unit price for the first order in exchange for lower MOQ. Propose a trial order with commitment to larger reorders. Some suppliers accept lower MOQ if you pay for dedicated tooling. Be honest about your volume trajectory. Suppliers prefer growing accounts over one-off buyers.
What payment terms should I expect?
Standard: 30% deposit, 70% before shipment. After 3-5 successful orders, you can negotiate 30/70 net 30. Established relationships may offer net 60 or even net 90. Never pay 100% upfront. Use trade assurance or escrow for first orders with unknown suppliers.
How do I handle price increases from suppliers?
Negotiate based on data: raw material indices, competitor quotes, and volume commitments. Accept small increases (2-5%) that reflect genuine cost changes. Push back on arbitrary increases by requesting cost breakdowns. Having a backup supplier gives you negotiating leverage.
03: Quality Control
Quality Control
When should I inspect products?
Three inspection points: pre-production (materials and components), during production (at 20-30% completion), and pre-shipment (final goods before packing). Pre-shipment inspection is non-negotiable for every order. Use AQL 2.5 for consumer goods. Catching defects before shipment is 10x cheaper than handling returns.
What's the difference between first-party and third-party inspection?
First-party: you or your team inspect at the factory. Third-party: an independent firm (SGS, Bureau Veritas, AsiaInspection) inspects on your behalf. Third-party is more objective and scales better. Costs £200-400 per inspection. Worth every penny for orders over £5,000.
How do I handle defective shipments?
Document everything with photos and videos immediately upon receipt. Notify the supplier in writing within 48 hours. Reference the agreed AQL levels and quality standards. Negotiate replacement, discount, or credit against next order. For serious defects, invoke trade assurance or escrow protection.
The procurement glossary defines the sourcing and supplier terms used throughout this FAQ, if any of them are unfamiliar.
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Language matters as much as mechanics.
Every term used in these answers has a consistent definition in the Glossary.