Why it matters for payment
A pre-shipment inspection is the single most useful gate for a milestone payment, because it converts a subjective question into a documented verdict issued by someone with no financial stake in the answer.
"Is the order acceptable?" is arguable. "Did the SGS inspection pass at 2.5% AQL for major defects?" is not.
This is why the largest tranche in a well-structured manufacturing contract is typically released against a PSI report rather than against production photos. Photos show what the factory chose to photograph.
Who performs them
The established agencies are SGS, Bureau Veritas, Intertek, TÜV and QIMA. A standard inspection of one product line costs roughly $300 or one inspector-day, which is negligible against a $120,000 order and is normally paid by the buyer.
What to specify in advance
An inspection is only as good as the standard it is measured against. Before production starts, agree in writing:
- The AQL levels for critical, major and minor defects (2.5% major / 4.0% minor is a common commercial default)
- The sampling plan, usually ISO 2859-1 General Inspection Level II
- Which functional tests are performed, and on how many units
- What counts as a defect for your specific product
- Who pays for a re-inspection if the first one fails
Booking an inspection without agreeing these first is how buyers end up with a technically passing report on goods they consider unsellable.
Common failure mode
Scheduling the inspection too late. An inspection booked for the day before the vessel sails leaves no time to rework anything. Book it when production reaches roughly 80% completion, so a failure is still recoverable without missing the shipping window.