Jewelry Sourcing

How to Audit a Jewelry Factory: Checklist, Red Flags & Assessment Framework

A practical guide to auditing jewelry factories. Includes a 12-point checklist, common red flags, document verification, and how to assess a factory in one visit.

Published July 23, 2026Updated July 23, 2026

Key Takeaways

- Always verify business license and export qualification documents first - Walk the production floor — don't just stay in the meeting room - Look at the workers, not just the machines — skilled labor is the real asset - Check the QC area: equipment, records, and rejected product samples - A clean, organized factory is not always the best — look for substance over appearance

Introduction

A factory visit is your most powerful sourcing tool. In one hour on the production floor, you will learn more about a supplier than weeks of email exchange. Here is how to make that hour count.

Pre-Visit Preparation

  1. Request documents in advance: Business license, export license, ISO/SEDEX certificates, tax registration
  2. Research the company: Check for legal disputes, ownership structure, years in operation
  3. Prepare your checklist: Customize for your product type (gold casting vs. silver chain vs. stone setting)
  4. Bring tools: Digital scale, caliper, 10x loupe, UV light, camera, notebook
  5. Bring a translator if needed: Factory managers may not speak your language fluently

The 12-Point Factory Audit Checklist

1. Business License Verification

  • Check the registered business scope matches what they claim to do
  • Verify the registered address matches the physical location
  • Confirm the legal representative name
  • Check for any administrative penalties or legal disputes

2. Export Qualification

  • Export license (import/export registration certificate)
  • Previous export records (ask to see a sample bill of lading)
  • Familiarity with your target market's compliance requirements (FTC, REACH, etc.)

3. Production Floor Walk-Through

Walk through in this order (follow the production flow):

  • Raw material storage → Wax/casting area → Stone setting → Polishing/finishing → Plating → QC → Packaging

Observe:

  • Workflow logic (does material move efficiently?)
  • Cleanliness (is there metal dust mixed with stones? contamination risk)
  • Lighting (adequate for detailed work?)
  • Ventilation (especially in polishing and plating areas)

4. Worker Assessment

  • How many workers on the floor? (not just the number on paper)
  • Age range and apparent skill level
  • Are they using proper safety equipment?
  • Do they look focused and unhurried?
  • Can you talk to a senior artisan? (they will tell you more than the sales manager)

5. Equipment and Technology

  • Casting: What type? (vacuum, centrifugal, continuous)
  • Stone setting: Microscope-assisted or naked eye?
  • 3D printing/CAD: In-house or outsourced?
  • Plating: Type of equipment, plating solution management
  • QC equipment: XRF analyzer, microscope, digital scale, calipers, salt spray tester

6. Quality Control System

  • Is there a dedicated QC area or is it integrated into production?
  • What inspection standards do they follow? (AQL, ISO, internal)
  • Ask to see QC records from the last 3 batches
  • Check the rejected product bin — what defects are they catching?
  • Do they have reference samples (golden samples) for ongoing orders?

7. Material Verification

  • Where do they source precious metals? (SGE-registered suppliers?)
  • Can they provide material certificates?
  • How do they verify incoming metal purity? (XRF on receipt?)
  • Stone sourcing: Direct from cutters or through middlemen?

8. Sample Room

  • Ask to see samples of previous work similar to what you need
  • Check finish quality on the samples — is it consistent?
  • Look at the complexity of work they display — it shows their ceiling

9. Capacity and Lead Time

  • Current order book: how busy are they?
  • Maximum monthly capacity for your product type
  • Typical lead time: first sample, production, shipping
  • How do they handle rush orders?

10. Communication

  • Who will be your point of contact?
  • Response time: test this before visiting — how quickly do they reply to emails?
  • Language capability: English, Chinese, other?
  • Do they use WeChat/WhatsApp for daily communication?

11. Subcontracting

  • Do they subcontract any processes? (common for stone setting, plating, engraving)
  • If yes: to whom? where? how do they QC subcontracted work?
  • Full disclosure of subcontracting is essential — hidden subcontracting is a major red flag

12. Payment and Contract Terms

  • Payment terms offered to new clients
  • Are they willing to use trade assurance or letter of credit?
  • Do they have a standard contract template?
  • Will they agree to quality-linked payment milestones?

Red Flags

  • Refuses to show the production floor: "It's too messy" or "workers are on break" — walk away
  • Business license name does not match: Common with trading companies posing as factories
  • No QC records or equipment: They do not inspect, or do not want you to see the results
  • Empty factory: Few workers, idle machines — they may be a trading company showing a rented space
  • Excessive subcontracting without disclosure: You lose control over quality and timeline
  • Unwilling to provide references: Established factories have happy clients who will vouch for them
  • Prices significantly below market: Something is being cut — material, labor, or honesty

Post-Visit Assessment

Rate the factory on each of the 12 points (1-5 scale). A score below 36/60 warrants caution. Above 48/60 is a strong candidate.

The most important indicator? Trust your gut. If something feels wrong during the visit, it probably is. The best factory relationships are built on transparency, not salesmanship.

Supply Chain Resilience

The global jewelry supply chain has been tested in recent years by events that no individual business could have predicted: a pandemic that shut down manufacturing centers, a war that disrupted diamond supplies from Russia, gold prices that surged 60 percent in a single year, and the suspension of duty-free de minimis shipping to the world's largest consumer market. Businesses that weathered these disruptions had one thing in common: they had invested in supply chain resilience before they needed it.

Resilience comes from diversification. A buyer who sources exclusively from Meilong for silver is vulnerable to disruption in one Chinese town — a local regulation change, a labor shortage, an infrastructure failure. A buyer who has qualified suppliers in Meilong, Bangkok, and Taxco has options when one source is disrupted. Diversification costs money — qualifying new suppliers requires time, travel, sample orders, and relationship building — but it is insurance against disruption, and like all insurance, it feels expensive until it is needed. The buyers who diversified before 2020 sailed through the pandemic disruptions. Those who had not scrambled — and many failed.

Resilience also comes from depth of relationship. A factory will work nights and weekends to fulfill an order for a buyer they have worked with for years, who pays on time, who treats them fairly. That same factory will prioritize other orders over a buyer who appears once a year, squeezes the last cent from the price, and disappears until the next transaction. The depth of the relationship is a form of insurance that costs nothing except consistent decent behavior over time.