A dual-base supply chain multiplies the number of things that can be misunderstood: two countries of production, two sets of holidays, sometimes an intermediary invoice in Hong Kong, and one delivery promise to your customer. The contract is where you prevent that.
The clauses that earn their keep
Specification by reference. Attach the approved drawing, material spec, finish standard, packaging spec and the golden sample. State that the golden sample governs cosmetics and the drawing governs dimensions.
Origin and content. Name the country of manufacture, list which components may be imported, and require written notice before any change of component source.
Inspection and acceptance. Define AQL levels, who inspects, and that payment of the balance follows a passed pre-shipment inspection.
Tooling ownership. You own the moulds, dies and fixtures you paid for. Record the tool numbers, their physical location and the conditions for return or transfer.
IP and confidentiality. Drawings are used only for your order. No sale of your design or your branded product to third parties. Register your trademark in the countries where production happens.
Lead time and remedies. Define the clock start (usually deposit received and drawings approved), the milestone dates, and what happens on delay.
Change control. No substitution of material, component, coating or sub-supplier without written approval.
Choosing the Incoterm
| Incoterm | Good for | Watch out for |
|---|---|---|
| FOB (ASEAN port) | Experienced importers with their own forwarder | You carry the risk from ship's rail |
| CIF | Buyers wanting a simple sea price | Insurance cover is minimal by default |
| DAP / DDP | Buyers who want a delivered price | Confirm who is importer of record and who pays duty |
| EXW | Rarely advisable | You inherit export formalities in a country you do not operate in |
For dual-base orders we generally recommend FOB or DAP from the ASEAN port of the factory that performs the final manufacturing, so the shipping documents match the origin story.
Payment structures that protect both sides
- 30 / 70 against inspection. Deposit to start, balance after a passed pre-shipment inspection and before release. The workhorse structure.
- Tooling paid separately, milestone based. T1 samples approved, then balance.
- Letter of credit. Sensible above roughly USD 150,000 per order, or with a new supplier and a long lead time.
- Staged for long programmes. Monthly releases against confirmed output.
Avoid full prepayment. Avoid paying to a company name that does not match the sales contract, and be cautious where an invoice originates in a jurisdiction unrelated to both the factory and the seller you contracted with.
How TUSKO reduces the paperwork risk
You contract with one counterparty. We hold the relationship with the factory, so you never negotiate with the plant directly, and there is no separate fee alongside the order — our margin sits inside the landed cost you approved. One specification, one invoice, one person accountable for the schedule.
FAQ
Which country's law should govern the contract? Choose a forum you can realistically use. Practical leverage — tooling in a plant you control, and balance payment held until inspection passes — matters more than the governing-law clause.
Should I sign an NDA before sending drawings? Yes, and combine it with trademark registration and staged disclosure of critical know-how.
Can I hold retention after delivery? Sometimes, for capital equipment or first production runs. It must be agreed up front, not imposed later.
What if the factory subcontracts part of the work? Require disclosure and approval. Undisclosed subcontracting is a common root cause of quality drift.
Next step
Send us your drawing, photo or a competitor sample with your target price and annual volume. You get back a landed-cost quotation, an agreed specification, a lead time and an inspection plan — with one person accountable for the whole order.
- WhatsApp Business: @tuskoconsulting (reply within 12 hours)
- Email: contact@tuskoconsulting.com (reply within 24 hours)