Quality assurance is a big issue for any overseas company that buys from Chinese manufacturers. Based on personal experience as a quality inspector, Renaud Anjoran, a blogger at QualityInspection.org, estimates that about 20% of all goods manufactured in China are “seriously inadequate.” The problem is even worse for buyers that place small orders. “With a small order, factories are more likely to cut corners,” Anjoran said. “If they piss a customer off, it’s not a lot of money to them. So you have to be very flexible if you order a small quantity in China. You don’t have a lot of weight to negotiate with the buyer.”
The antidote for buyers large and small has been to hire on-the-ground inspectors to ensure goods are up to snuff before they are loaded into containers for overseas delivery. The problem for small buyers is cost and quality of service. “Local inspection firms’ prices are all over the place,” Anjoran said. “And their service and reliability are sometimes terrible.”
Enter Alibaba.com’s newly launched Inspection Service, which isnow in beta on the site.It’s an online solution designed by the B2B e-commerce company to match small buyers with affordable and reliable inspection services. Alibaba hand-picked 20 China-based inspection companies, most of them based in the Pearl River Delta, China’s manufacturing hub, to participate.
“We vetted them by checking how many orders they handle per year, how many years they’ve been in the business and their experience dealing with foreigners,” said Irina Gee, who runs the service for Alibaba.com. The companies are charging between $150 to $250 a day to carry out product inspections prior to shipping from the factories.
InspectionService is among a number of new measures Alibaba has introduced in the past 18 months to improve the experiences of small buyers using Alibaba.com and to curtail online fraud. All participating inspection companies are required to demonstrate their good faith by putting up a deposit which may be forfeited to buyers in the event of a dispute. Inspection complaints are handled by Alibaba’s dispute-resolution team, which has the authority to pay up to $3,120 in compensation in the event of a faulty inspection. Alibaba also holds the buyers’ payments for inspection services in an escrow account until they agree to release funds to the inspectors.
Even with safety checks such as escrow, there’s no guarantee thatproblems won’t arise. Buyers and sellers do not always agree that the original product specifications have been met. “The spec of the product is very, very important,” Anjoran said. “Sometimes buyers aren’t very good at describing what they want.”
While no software can overcome that hurdle, InspectionService includes a one-stop online communication system to improve transparency and make it easier to manage transactions. Buyers use this system to select inspectors and upload their requirements. Inspectors use the same system to upload their reports. Buyers then use the site to release funds to the inspectors.
Memomark Inspection Services in Guangzhou was one of the first inspection companies selected for the new program. The company has eight full-time employees and caters to small and medium-sized buyers in Europe and North America. Jim Huang, the company’s owner says he’s already seen an uptick in business since the platform launched. He’s landed two new clients and is negotiating with several others.
InspectionService currently covers only shipments from China, although Alibaba officials say they hope to expand to other countries in the future.
