First time Alibaba user and importing qustions

[Dnallov]

I've been wanting to try out importing for years, and now I have landed in a situation where I can dabble in it a little.

I know Alibaba has a reputation, so want to tread carefully and hope to pick up a any advice you may have to keep me as safe as possible

After sending out several enquires I have found a suitable manufacture. They are in the process of sending me a sample and, if I am happy with the product want to make an order.

The manufacturer is a 'gold supplier' and has Alibaba 'Trade Assurance' up to $22,000. As a trial, this first order won't be a big one, only 100 items at $4 each, so this 'Trade Assurance' seems reassuring. However what does the 'Trade Assurance' mean in practice, and does it genuinely protect me?

To keep things simple, and as it is such a small order the manufacture has offered TNT courier freight at $250; does this seem acceptable for a 55kg package?

Lastly, the items will be due 2.3% import duty and 20% VAT; how and when does the process of the import duty and VAT occur? Also, as I am VAT registered I hope I am right in assuming I can reclaim the VAT back?

A couple of questions here, but any advice in the subject would be much appreciated!

Many Thanks

JV

 

[paulears]

TNT will invoice you for processing the transaction on your behalf as a disbursement - they pay the duty and VAT, and will add on a charge for doing it - parcel force charge £12.50, and the others are similar. You get a proper invoice for your accounts and their charge is a valid expense, and you can reclaim the VAT in the usual way. Parcel force ask for the money in advance, and TNT, from my last Chinese order delivered by them, took over two weeks to submit the invoice. Fedex and TNT are indeed expensive, they may be able to offer delivery by their EMS organisation, delivered here by Parcelforce - it's usually a bit cheaper. Ask them if there is an alternative? However 55Kg is over the weight limit for many couriers, which may explain the price.

 

[Maple Sourcing]

To keep things simple, and as it is such a small order the manufacture has offered TNT courier freight at $250; does this seem acceptable for a 55kg package?
-------- Yes, it's a good price. Wish you good luck.

 

[Import Expert]

As above regarding the courier price - it's pretty good to be honest. You are nearly in the realm of sea freight which for future larger orders will be much more cost effective.

I'm not sure what Trade Assurance covers but I should add that Alibaba only has a reputation as you only hear about the horror stories - For every one of them there are probably tens of thousands of perfectly good transactions.

Due some due diligence (simple google searches - see if anything comes up), perhaps pay by paypal if they accept it, make sure they have been on Alibaba for at least 2 - ideally more, years.

 

[Directimport]

paulears has given a good answer regarding the process, but I agree with the other posts that say the courier rate is OK.

Alibaba’s Trade Assurance Service is not without difficulty for buyers. I suggest you read the relevant Terms and Conditions, (T & C) but in particular the following:

2.4, 2.6, 5.5, 5.5.1, 7.3, 7.5, 9.5.1, 9.5.2, 10.2.4, 10.3, 10.4, 11.3,11.4, 11.5, 11.6, 11.7, 11.13, 11.14, 14.6.5, 15.5.

Because I know that few will bother to check out the huge page full of technicalities, I will draw attention to some very important matters found in the (T & C) plus some important things that they do not specify.

Alibaba have the absolute right to decide if your money will be handed over to the supplier. No right of appeal.

Claims that the product is faulty must be made before the goods are delivered!

They say in 7.5 “Buyer may confirm the shipping invoice within 15 calendar days after Seller uploaded the evidence of shipment”, but they do not explain this very important clause. “Confirming the shipping invoice” is not mentioned anywhere else in the T&C.

Data recorded by One Touch, Alibaba, and Alibaba.com constitute almost the only evidence admissible in dealing with a claim. This means it is imperative that you keep screen shots of every transaction, every page visited, every attachment sent to you or by you, every email to or from your supplier and to or from Alibaba and OneTouch. You can provide other supporting evidence, but it certainly appears that it is inconsequential.

Here is 10.2.4 in full: “10.2.4 In the event of a dispute between Buyer and Seller on product quality, Buyer should raise a complaint before Seller delivered the product. The product verification report issued by a product verification company obtained by Buyer shall serve as the basis of determination on whether or not the products are in line with the agreed product quality standards.” This implies, but does not clearly state, that you should have every shipment inspected before the goods leave the factory, or before they leave China. The inspection cost will be yours.

Now, if you have digested that, here is 10.3 in full: “10.3 After Buyer submitted a request for Alibaba to resolve a dispute on product quality, Buyer shall instruct one of the designated Product Inspection Company to inspect the products and pay for the relevant inspection fees. Alibaba shall make a determination on the dispute based on the product inspection report issued by the Product Inspection Company. If Buyer and Seller did not expressly agree on the quality standards required of the products, the Product Inspection Company shall have the right to issue the quality standards report based on the relevant industry standards. Alibaba shall have the right to reject any product inspection reports issued by other product inspection companies. If the products cannot be inspected due to reasons or faults attributable to a particular party, such party shall be liable for any damage or liability that arises therefrom. “ The bolding and underlining are Alibaba’s. Put simply it means you will have to pay for another inspection, using an inspection service of Alibaba’s choosing. In the past they have specified SGS, which will cost you about $350 or more. This clause also highlights the requirement to precisely specify quality standards. Few importers will have the technical knowledge to do this and will have to have specifications drawn up by an engineer familiar with the particular type of product being ordered, and in keeping with your specific requirements included. Cost to you $????.

The other major point I would make is that if you pay a deposit, that will be covered by Trade Assurance if you ask for it and the supplier agrees, but if you pay the balance before shipment, that is not covered. See Clause 10.4

If in your case you only pay a 30% deposit and request Trade Assurance it will fall below the US$1,000 minimum and will not be covered anyway.

 

[Karimbo]

basically if you meet all the criteria for trade assurance you wont need it at all because you can reject goods at the factory

 

[Directimport]

basically if you meet all the criteria for trade assurance you wont need it at all because you can reject goods at the factory

Trade Assurance covers quoted delivery date being complied with as well as pre-shipment quality assurance. What that implies is that if the goods are not shipped at all, as happens sometimes, the money will not be transferred to the seller's account.

The loophole there is that false documents can be presented showing that the goods have been shipped when they have not, or genuine documents can be presented, but when delivered, the contents of the shipment are found to be not as described.

There is no protection for instances of goods arriving at destination, but not being as described, so an inspection must include sealing of the shipment.

NOTE: A buyer's use of a pre-shipment QA inspection service is optional, but unless that is done no claim could possibly succeed, so without it the use of Trade Protection is pointless. Why would Alibaba allow for that inspection to be optional, when failure to do it would nullify the protection arrangement?

 

[PowerForwarding]

Yes for a small shipment courier is best and that price is pretty good. Once you start moving larger loads it will become much more cost effective to start moving by sea.

 

[MOIC]

Due diligence
Due diligence
Due diligence
Also, understand the product you are buying and ensure all specifications, including packaging and any required certification is included in the Proforma Invoice, which is in effect your contract with the supplier.
You need to learn to swim before you jump in the water.
Do all the research you can on your product.
Good luck!

 

[brandy11112]

1 What is Trade Assurance?
Trade Assurance is a free payment protection service for buyers.
The service is offered by participating suppliers, and is designed to protect your payment if your order is not shipped on time, or if the pre-shipment product quality (optional) does not match the terms agreed on your contract.
Your payment is protected up to 100% of an amount - agreed between you and the supplier - called the Trade Assurance Order Amount.
2 How does it protect my order?
Alibaba.com will refund up to 100% of the Trade Assurance Order Amount on your contract if:
· Your order is not shipped on time as stated in your contract.
· Your products do not meet the quality requirements1 stated in your contract2.
1. The product quality must be checked before shipment.
2. This feature is optional. You must enable it when you place your order.

 

[Directimport]

The over-simplified post by Brandy11112 can lull readers into a false sense of security.

Alibaba’s Trade Assurance Service is not without difficulty for buyers. I suggest that intending buyers read all the relevant Terms and Conditions, (T & C) but in particular the following at least:

2.4, 2.6, 5.5, 5.5.1, 7.3, 7.5, 9.5.1, 9.5.2, 10.2.4, 10.3, 10.4, 11.3,11.4, 11.5, 11.6, 11.7, 11.13, 11.14, 14.6.5, 15.5.

Because I know that few will bother to check out the huge page full of technicalities, I will draw attention to some very important matters found in the T & C plus some important things that they do not specify.

Claims that the goods are faulty must be made before the goods are delivered. If the goods have been delivered there is no possibility of making a claim. They do not specify what "delivered" means, although that should depend on the terms of contract.

Unfortunately it can also depend on Alibaba's interpretation of "delivered." They might consider it to be when the goods have been loaded on a carrier. They might say that the goods have been delivered as soon as they leave the supplier's dock. There are internationally recognised terms that apply, but they might not apply under Alibaba's rules. Perhaps they mean when the buyer has actually received them???

Clause 10.3 is quite complicated and should be read in conjunction with 10.2.4, but it is vital that buyers understand it. Put simply it means you will have to pay for second inspection, using an inspection service of Alibaba’s choosing. In the past they have specified SGS, which will cost you about $350 or more. This clause also highlights the requirement to precisely specify quality standards.

If you pay a deposit, that will be covered by Trade Assurance if you ask for it and the supplier agrees, but if you pay the balance before shipment, that is not covered. See Clause 10.4

If your deposit is below the US$1,000 minimum you can’t get cover anyway.

Data recorded by One Touch, Alibaba, and Alibaba.com constitute almost the only evidence admissible in dealing with a claim. This means it is imperative that you keep screen shots of every transaction, every page visited, every attachment sent to you or by you, every email to or from your supplier and to or from Alibaba and OneTouch. It is not unusual for such records to disappear. This has happened to buyers using Alibaba and other B2B sites.