Learn French: Les produits que vous avez vendus sont défectueux. - The products that you sold are defective.

Normally, past participles used with avoir don't change. But there is a special rule: if the direct object comes before the verb, the past participle must agree with it! Here, the object is que (referring to the masculine plural les produits). Because it comes before avez vendus, we add an -s.

Could I use qui instead of que here?

No, because que is the object of the verb (the things being sold). A helpful trick: use que when it is followed by a subject, like vous in this sentence. Use qui when it acts as the subject doing the action (like in les produits qui sont défectueux).

Why doesn't the adjective défectueux get an extra letter to show it is plural?

It is already plural! In French, masculine adjectives that end in -x or -s in their singular form do not change when they become plural. So, un produit défectueux becomes des produits défectueux.

Do I pronounce the added "s" on vendus?

No, the added -s is completely silent. You pronounce it exactly the same as vendu. The agreement is only important for written French.