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How to prepare a Purchase Order

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Stone's picture
Submitted by Stone on Fri, 09/20/2013 - 12:40

Some buyers import from China without a Purchase Order in place; they simply use the commercial or pro-forma invoice from the supplier. This lack of safeguard mechanism can lead to ambiguity and major supplier issues.

Some other buyers from big companies, however, send PO that has pages over pages of provisions. I doubt how many salespeople in the factory will bother to read it through.

How to write a PO properly to your Chinese supplier? What are those key points that can’t be missed? In general your PO should include:

Basic info

  • PO number, PO date
  • Buyer and seller’s company name
  • Both parties’ company details
  • Both parties’ contact details
  • List of product descriptions, quantities, unit prices and total prices.

Import info

  • Price terms
  • Payment terms
  • Delivery date
  • Description of major quality defects that can’t be accepted, better with picture illustrations
  • Quality control & inspection procedure
  • Additional requirements such as non-disclosure or OEM agreement, custom labeling, packaging, packing etc.
  • Penalties for infraction of provisions

Lastly but most importantly, ask your supplier to sign back your PO with a company seal. If you want your PO legally bound in China, write it in both English and Chinese, since the Chinese language version will control in China.

Feel free to download our Purchase Order Template and adapt it to your needs.

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Comments

Hi! Thank you for put available for download the template is perfect and it will be very useful for me.

Thanks a lot, I have benefited lot from this article as I am just about to import machinery from China.
Can anyone out there assist with translation into Chinese version of the purchase Order? Is payment by TT safe for an SME?

You can get me on mulengjc@gmail.com

Hi Store, I've just read your article, it is really helpful and very simple to understand.
Would you please provide some info regarding non disclosure agreement / OEM agreement as well?

Hi there,

Do you have a template of a PO order I could have a look at? Very helpful article!

Sophie :)

Hi Sophie, Yes you can download the template and modify it to your needs. The download link is right below the article, down at the bottom.

Hi Stove, This article is superb. I have been searching the internet for the last 3-4days for a good format. Your format is by far the best!
Would you please provide some info regarding non disclosure agreement / OEM agreement as well?

HI Ray,
To tell ya the truth that if you're working with small factories in China, chances are even if they sign it for you they don't even read the lines...(:
Can get to it when I am available, hopefully soon.

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