How to Order Product Samples from China – The Complete Guide

The development of pre-production samples is the only way to really test the possibility of bringing a new project to life and the ability of manufacturers to realize it. Yet this is also a minefield that can cause you to lose months, sometimes up to a year, if it is not managed properly. The first step in pre-production sample development is to draft the terms of the sample order. A well-drafted document can save you thousands of dollars in development costs and avoid serious delays caused by the endless number of sample revisions.

Read on to learn how to document sample order deadlines, including product specifications, compliance requirements, sample review, and equipment ownership terms.

Product Details

Product Specification Sheet and Attachments

A product must exist on paper before it can be assembled along the assembly line. Chinese manufacturers, being primarily suppliers of OEM items, expect the customer to provide them with all the information relevant to the product, including:

• CAD files
• The project (ANSI or ISO standard)
• The bill of materials
• The size chart
• Color codes (e.g., Pantone or RAL)
• Samples of reference products
• Samples of the reference material
• Reference colour swatches

Factories do not host design teams “on-site” for buyers to use for free. Therefore, any details not included in the sample order will not accompany it. Whenever I hear about severe delays and multiple sample revisions, it’s because the buyer couldn’t provide clear and consistent product specifications.

Product Safety Regulations and Substance Restrictions

All applicable product regulations, including technical regulations and substance restrictions, must be communicated to the manufacturer before samples can be made. If possible, the product sample, once finished, must be subjected to conformity tests. But this may not always be possible for the following reasons:

1. Clothing and Textiles: The supplier may not be able to purchase small quantities of “compliant” fabrics and components, so they may be forced to start making only a demonstration sample.
2. Electronic systems: The supplier may not be able to procure the printed circuit boards (PCBs) and other RoHS-compliant components to assemble a prototype, and they may not even have the necessary equipment to test for electromagnetic compatibility (EMC).
3. Baby Products: The supplier may not be able to purchase small quantities of “compliant” materials and components.

Even if you still have to communicate all applicable directives and regulations to the supplier, do not assume that for the reasons stated above, they can assemble a “compliant sample”. Obtain information from your supplier before calling the testing laboratory and make sure you receive this information in writing.

You also need to consider how to deal with a situation where the sample fails the test in question. A second or even a third compliance test could cost you anywhere from a hundred to several thousand dollars.

Product Packaging and Labeling Requirements

Developing a new product packaging is a challenge in itself. However, regardless of whether you purchase a private label package (ODM), or a custom package (OEM), you must enter the following:

• Graphic files (.ai format)
• The package design file (.ai format)
• The list of materials

If you intend to purchase a private label product (for example, the standard factory packaging with your artwork) you can request a diagram of the artwork from the manufacturer. As mentioned above, Chinese manufacturers expect the buyer to provide all the necessary information, so make sure to design your package artwork in accordance with all applicable labeling requirements. Depending on your market and product, you may need to include one or more of the following:

• CE marking
• FCC Marking
• Warning label
• Country of origin
• Batch ID / Serial Number
• EAN code

Terms for Sample Order

Production Timing, Revisions Included

It is rare for champions to come out perfect on the first try. Depending on the product and its complexity, you need to plan for two or three revisions. However, you don’t want to end up in a situation where the supplier asks you for more money because they couldn’t get your approval on the pre-production samples. For this reason, enter the following terms:

1. The supplier must produce an unlimited number of sample revisions (in case the batches of the previous samples do not comply with the product specifications and quality requirements of this document).
2. The seller may not require additional payments from the buyer unless the buyer makes changes to the product design, materials, quality or compliance requirements.
3. Pre-Production Sample Review Time:

• 1st sample: XX days
• 2nd sample: XX days
• Yet another champion: XX days

4. If the supplier fails to produce an acceptable sample after X revisions, the buyer can ask the supplier for a full refund (XXX USD).
5. If the supplier fails to produce the samples within the deadlines set out in the “pre-production sample review timeline”, the buyer can ask the supplier for a full refund (XXX USD).

As you probably already understood, the main purpose of these terms is to put pressure on the supplier to:

1. Comply with all design requirements and product specifications
2. You limit the number of revisions needed (as it ends up on the losing side when it neglects your requests) and, as a result, speeds up the development process.
3. Limit the time spent on the production of each sample revision

However, these terms are, for obvious reasons, null and void if you change the product specifications after the supplier has started working on the pre-production samples. Again, get the right data sheet before proceeding.

One more thing: don’t think that you can see the money back just because it was put in writing. Yet, the supplier will take your company more seriously (hopefully), thus giving your pre-production samples a higher priority.

Properties of Molds and Equipment

When you buy custom products, you usually need injection molds and other equipment. Equipment is always paid for by the buyer and can have a significant impact on the cost of product development. It is for this reason that you want to avoid any of the following situations:

• The supplier uses your equipment for other buyers
• The supplier refuses to change the equipment for you or your new supplier

The first situation requires more than a written clause. As for the second situation, please add the following two clauses to the terms of the sample order:

1. All equipment (as listed below) is the property of the buyer and may not be used in any other production, for the seller (supplier) himself or for his other customers (domestic or international), without the written approval of the buyer.
2. The equipment can be transferred at any time by the buyer, or his representative, to China. Based on this request, the seller must send the equipment to the buyer within 3 business days. The buyer must pay all shipping costs (maximum XXX USD).

Subcontracting

When purchasing pre-production samples, it’s important to test the capacity the manufacturer has to make your project. What happens if the manufacturer contracts for production samples with another factory? Well, there is nothing that can tell you the ability that the supplier has to actually make your products. So, new quality issues can pop up that you thought were already corrected during the sample development phase.

This happens. Although most of the terrible stories related to subcontracting in China refer to moving mass production to another factory, you certainly don’t want this to be the case with your pre-production samples. So include this term:

1. The seller may not subcontract the production of the sample to any other person or company, or entity (excluding the procurement of components and materials).
2. The pre-production sample must be made at the supplier’s production facility at the following address:[Inserisci indirizzo]
3. The buyer, or his representative in China, may inspect the seller’s facilities without prior notice to verify that sample production takes place at the specified address.
4. Failure to comply with the subcontracting terms will result in an immediate refund (XXX USD).

Payment Terms

If the cost of the sample amounts to hundreds of dollars, the samples of the products are usually paid in advance for their total amount. However, more complex developments, such as OEM electronic systems and custom plastic parts that require injection molds, can result in costs running into the thousands, sometimes tens of thousands, of dollars. When the stakes are high, risks must be managed accordingly. For these situations, we recommend that you apply the following terms:

• 40% deposit before the equipment and pre-production samples are made.
• Balance of 60% after written approval of the buyer regarding pre-production equipment and samples.

Annex to the Non-Disclosure Agreement (NDA)

Assuming you’re developing a product with a new design, a new feature, or your own branding, you want to prevent the supplier from selling your product, or brand, to other buyers domestically and internationally. That’s why the Non-Disclosure Agreement (NDA) is added, in the form of an attachment, to your sample order terms. An NDA prevents, in theory, the supplier from doing the following:

• Selling products using your own brand
• Sell copies of your product design
• Share your product information with third parties
• Employ your products as part of their marketing materials (e.g., as reference products on their website or on the supplier listing page)

The purpose of the NDA is to get the supplier to think twice before mass-producing copies of your product. Again, this is Asia and pragmatism demonstrates “how things should be” every day. The NDA may take your time, but it certainly doesn’t express a willingness to prevent the supplier from starting to make the product using a different company, if that’s what they really want to do.

In the end, what matters is the design patent and trademark registration. If your product is exclusive and at risk of being copied, do the following:

1. Apply for a design patent/functional patent in the United States, the European Union, and your home market (if outside the United States and the European Union).
2. Apply for a project patent/functional patent in China.
3. Register your trademark in the United States, the European Union, and your home market (if outside the United States and the European Union).
4. Register your trademark in China.

Final Comments

1. The purpose of the sample order agreement is to provide the supplier with various incentives to produce an acceptable pre-production sample, with as few changes as possible and within a reasonable timeframe. It should not be considered an insurance policy to recover lost money and time.
2. The supplier must print, sign, and stamp a hard copy of the terms of the sample order. Terms listed in an Excel or Word file have no value whatsoever.

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