Should the factory buy components or should I?
Let the factory buy standard components when it can document the source and accept clear purchasing and stock responsibilities. Buy directly when source control justifies managing deliveries, shortages and surplus yourself. Compare complete costs before choosing. Cambridge China Bridge can help agree the arrangement with the factory.
Choose by responsibility, not component price
A standard part can still vary by manufacturer, grade, finish or revision. Start with the approved specification and decide who can best control its purchase and availability. You can also split the arrangement: buy source-sensitive parts directly and let the factory procure routine parts.
| Decision | Factory buys | Buyer supplies |
|---|---|---|
| Provenance | Require named sources and supporting purchase records | Choose the supplier and preserve records through factory receipt |
| Purchasing control | Agree approved sources and changes needing permission | Manage ordering, payment and delivery coordination |
| Inventory responsibility | Agree which stock commitments are included | Agree custody, usage, shortages and surplus handling |
| Complete cost | Check procurement and stock charges within the finished-goods quote | Add component purchases and all costs outside the assembly quote |
Check provenance through to assembly
For either route, record the manufacturer, exact part reference, specification revision and approved seller. Ask for purchase records, package labels and batch identifiers that connect delivered components to the finished batch. Buying directly improves visibility only if the factory keeps your stock identifiable and records what it actually uses.
If the factory buys, ask whether it purchases from the manufacturer, an authorised distributor or another trader, and how it verifies that claim. Agree access to supporting records before ordering. For source-sensitive electronics, use the separate guide on detecting counterfeit components.
Separate source approval from purchasing control
You can nominate a supplier while the factory places and pays for the order. Confirm who receives the supplier's quotation, approves the purchase, handles claims and benefits from rebates or credits. Ask whether the component price includes a procurement charge and whether the factory will disclose the underlying purchase cost.
If you buy directly, obtain the factory's written acceptance of the part and delivery plan before committing. Agree incoming checks, assembly suitability and a hold procedure for rejected stock. Define who investigates component defects versus assembly damage. Set change permissions using the substitution approval guide.
Allocate stock responsibility before ordering
For factory purchases, ask whether the quote covers only parts used in your order or also an entire supplier pack or minimum purchase. For buyer-supplied stock, agree ownership separately from responsibility for loss, damage and storage. Specify segregation, handling conditions, stock access and whether unused parts may be used for another customer's work.
Agree how shortages, rejected parts, assembly losses and surplus are reported and funded. Record who pays for replacement deliveries and production interruptions, and who approves scrap or returns. Require a closing stock statement before final settlement; use the supplied-material reconciliation guide for the detailed records.
Compare the complete quoted cost
Request matched quotes for the same finished specification, order quantity, packaging and delivery basis. Compare component purchases, procurement charges, transport to the factory, receiving checks, storage, assembly, testing, losses, surplus commitments and finished-goods delivery. Mark each item as included, separately charged or unresolved. Use the free-component quote comparison guide for the costing exercise.
For UK customs valuation using the transaction-value method, buyer-supplied components incorporated into imported goods must be included to the extent their cost or value is absent from the seller's price. Give the customs agent the component invoices and allocation records. Ask for customs duty and import VAT estimates alongside the commercial comparison; a lower assembly invoice alone does not establish a saving.
Frequently asked questions
Is it cheaper to supply components to a Chinese factory?
Only if the complete comparison supports it. Add purchasing, transport, receiving, storage, losses and surplus costs to the assembly quote before comparing it with the factory's complete offer.
Can I choose the component supplier but let the factory buy?
Yes, propose a nominated supplier arrangement. Agree approval of prices and substitutions, access to purchase records, procurement charges and responsibility for supplier claims.
Who pays for unused components at the factory?
Agree this before purchase. State who funds pack-size surplus, owns the remaining stock and pays for storage, returns or disposal. Require a closing stock statement.
Does supplying components reduce UK customs value?
Under the transaction-value method, incorporated buyer-supplied components must be included where their cost or value is missing from the seller's price. Ask your customs agent to check the allocation.