| 1 Compare the Full Landed Cost | Pricing, duties, taxes, insurance, and local delivery | Request a cost breakdown that separates the product price from freight, customs duties, import taxes, insurance, handling fees, and inland transportation. | Confirm the selected Incoterm, currency, quotation validity period, tax responsibility, and the exact destination used for the calculation. | Medium | Landed cost per unit |
| 2 Control Price Volatility | Exchange rates, raw materials, fuel, and surcharges | Establish how and when prices may change. Use a defined adjustment formula instead of accepting unlimited or undefined increases. | Include a price-adjustment clause with an objective index, notice period, documentation requirement, and buyer termination right for significant increases. | Medium | Quarterly price variance |
| 3 Make the Contract Specific | Quality disputes, unclear obligations, and legal enforceability | Attach clear specifications, drawings, approved samples, packaging requirements, delivery milestones, inspection rules, and acceptance criteria. | Define governing law, dispute resolution, warranty coverage, remedies for nonconformity, limitation periods, and the language controlling the agreement. | High | Defect or dispute rate |
| 4 Verify the Supplier Before Ordering | Capacity, compliance, financial stability, and operational reliability | Check legal registration, production capability, relevant certifications, references, quality controls, ownership information, and export experience. | Require accurate party details, authorized signatories, applicable compliance documents, audit rights, and advance notice of material subcontracting. | High | On-time delivery rate |
| 5 Plan Shipping and Customs Early | Transit delays, incorrect documentation, customs holds, and cargo damage | Confirm the transport mode, lead time, shipping route, port or airport, packaging standard, document set, and contingency plan before production starts. | Verify the correct HS classification, country of origin, commercial invoice, packing list, transport document, certificates, permits, and import requirements. | High | Customs clearance time |
| 6 Use Milestone-Based Payments | Advance-payment loss, fraud, non-delivery, and weak cash-flow control | Link payments to verifiable milestones such as contract signing, approved production sample, inspection approval, shipment evidence, and final acceptance. | Confirm bank-account details through an independent channel and define payment currency, due dates, supporting documents, refund conditions, and late-payment consequences. | High | Unsecured payment exposure |
| 7 Inspect, Document, and Review | Undetected defects, quantity shortages, delivery disputes, and recurring failures | Use a risk-based inspection plan covering pre-production, during-production, pre-shipment, and arrival checks where appropriate. | Retain inspection reports, photos, shipping records, correspondence, and corrective-action evidence. Review supplier performance after each order. | Medium | First-pass acceptance rate |