Understanding the cost of QC inspections in China
Some importers get to talk about their project for some time, see where we would help them, and finally (almost as an afterthought) ask: “How much does a quality inspection for led display/sigange in China cost?”
When quoted: “299 USD per day of work”, I can nearly hear them thinking “wow these guys are cheap”.
They compare this fee to the costs of professional services in their country, or maybe to the total amount of the order, or to the cost of their best alternative (taking a flight to China). So it sounds really low.
Breaking down how much quality inspections cost in China
1 man-day of work (which is sufficient for a 20-40 sqm led video wall) costs 299 USD.
Travel expenses might apply, on top of the cost of labor, if the factory is far away from the closest importer. Let’s take 3 typical examples:
- If the trip is only 60 km, it is included in the price.(in most of the case the price can cover,because our office is in shenzhen)
- If the trip is 120 km, an extra 50 USD might be charged.( as there growing numbers factories move to nearby cities like Dongguan or Huizhou）
(Exact costs are quoted on a case-by-case basis, depending on transportation options available. Contact us if you’d like to discuss quality inspections now.)
I am always surprised by the expectations of some other importers regarding the cost of led display quality inspections in a Chinese factory. In their minds, even 100 USD would be a rip-off.
They compare it to the salary of a typical English-speaking employee in China (6,000-8000 RMB), they divide it by 30 days, and they think we make an insane margin.
These buyers seem to forget about the main costs of a company that has set up a network in the main regions:
- Training/supervisory/internal control overheads
- Travel expenses to factories
- Client communication
- Taxes and social security
- And more….
The buyers who value better service and reliability
The first category is ready to pay more for better service and higher reliability. They tend to be medium- or large-scale companies, or they have developed their own product and getting all the details rights is what helps them charge a premium. These buyers allow quality assurance firms like ours (Sofeast) to exist.
They want to make sure they are paying fees within the market band (i.e. not twice as much as their competitors). They are looking for convenience, reliability, and speed, more than a ‘great deal’.
The buyers who prefer the lowest possible cost
I learned that the second category of buyers, unless they absolutely have to, will never accept to pay the market price for quality control inspections. They prefer to roll the dice and let the factory ship out. In some cases, if they work with a ‘sourcing agent‘ who spends 20 min looking at a few products and taking a few photos, it is already plenty.
Is it rational? Not always. Are they worse off? Sometimes. If they buy off-the-shelf products that are purely decorative (or to be given away as part of a marketing campaign), that might make sense!
Conclusion
What is our conclusion, knowing all this?
Our main target is companies who have recognized the value of a inspection, for those who have been in led display industry for years,those who suffer from endless quality problems. In the QA department, we help them get better organized, specify what their QC checklist is, and take better advantage of QC inspections.
And those buyers who always look for the best deal? We let them choose the cheapest suppliers and run the highest risks. They are not a part of our client base … We are just not a good fit.
