First timer Alibaba order - China to UK

[Jaimeweb]

hi There,
I am looking to import some products from an Alibaba supplier.
I have some questions which I am really unsure and confused about.

1. I have a freight forwarder in the UK that has given me a quote for the weight and dims for FOB.
From my understanding, this is basically everything (except duty and VAT once in the UK) covered from the China port to my doorstep. Is that correct?

2. My supplier has said that to get the products to port in China would be $160. However, my freight forwarder has said "they should not charge under the terms FOB, the trucking is their cost to pay not yours". But that doesn't make sense to me, why would the supplier transport the goods for free?

3. When the supplier has taken the products to the port, how does it get sorted correctly? How do they know where to drop the goods? Or am I worrying to much about that?

4. How does the supplier and my freight forward communicate to ensure the goods are there on time and avoid storage costs?

Thanks.

 

[Frank the Insurance guy]

2. My supplier has said that to get the products to port in China would be $160. However, my freight forwarder has said "they should not charge under the terms FOB, the trucking is their cost to pay not yours". But that doesn't make sense to me, why would the supplier transport the goods for free?

FOB is an internationally recognised term which specifically states what the buyer and seller is responsible for.

A list is here: https://en.wikipedia.org/wiki/Incoterms

As you can see from the table under FOB, the seller pays for Carriage to port and loading.

Also note that the Buyer (you) are responsible for insurance (in case of loss, damage or other issues whilst in transit!)

 

[Jaimeweb]

Ok so is it wrong or something I should be weary of that the supplier has given me a quote that has a line for "FOB to Yantian Port = $160" which is to be paid as part of the order?

I don't understand why a supplier would cough up this cost themselves. Or am I missing something.

 

[Paul Kelly ICHYB]

"FOB to Yantian Port = $160"

To me, that says to make it FOB Is an additional $160.

What are the terms of sale then? Ex Works? If yes, get the FF to quote from factory.

 

[Jaimeweb]

No, the terms are FOB.
I have FF price for FOB terms.

But then the supplier has gave me invoice of the products we have ordered plus 1 line at bottom for "FOB to Yantian Port = $160".

 

[Paul Kelly ICHYB]

So, the terms are not, they are Ex Works and then an additional charge to make it FOB.

My guess is if you want them to do a specific FOB invoice, they will just add the $160 on and remove that line!

 

[Jaimeweb]

I see - and a specific FOB invoice would basically just increase the unit prices of products?

can you see anything wrong with what they have done there? I guess they have to cover their delivery and paperwork costs to the port some how don't they...

 

[Paul Kelly ICHYB]

If they are an established exporting factory, they would know this.

My guess is that you are using an agent/third party. As suggested, ask your FF to quote for collection.

BTW, what did the supplier say when you spotted that additional FOB line?

 

[Jaimeweb]

They are well established and export all over. They aren't a third party they are the manufacturers.

I have asked for a EXW quote from the FF but my guess is that it will add more than $160 to their quote, in which case it's better for me to allow the supplier to get the goods to port isn't it?

I think they were under the presumption that we wanted EXW - maybe thats the most common I don't know. But then I said "can you get goods to port for FOB" and then they said yes but cost is $160.

 

[Jaimeweb]

Another couple of questions

The supplier originally sent bank details to transfer deposit for the order. But I said to rasie the order via Alibaba, which they have done.
But reading online it seems normal for people to take the discussions and transactions off Alibaba if they trust the supplier. I guess I'm looking for reassurance on that and why would the supplier choose to take the order 'offline'.

the supplier then split the order into 2 orders on Alibaba for approx $3000 each because they said that if the order goes over $5000 and we use own FF then "I cannot use Yidatong for customs declaration, because it cannot be greater than USD5000"
"if total amount exceed usd5000, we must go with one-touch agency export, your agency must use our one-touch documents"

Can anyone put this into layman's terms for me...

 

[MOIC]

1. I have a freight forwarder in the UK that has given me a quote for the weight and dims for FOB.
From my understanding, this is basically everything (except duty and VAT once in the UK) covered from the China port to my doorstep. Is that correct?

Have you told the FF that your terms with your supplier are FOB, or have they just assumed so?

2. My supplier has said that to get the products to port in China would be $160. However, my freight forwarder has said "they should not charge under the terms FOB, the trucking is their cost to pay not yours". But that doesn't make sense to me, why would the supplier transport the goods for free?

They won't, they are charging $160, which is reasonable, depending on their proximity to the port. Again, your FF seems to think you have agreed FOB terms with your supplier. It's apparently EXW.

3. When the supplier has taken the products to the port, how does it get sorted correctly? How do they know where to drop the goods? Or am I worrying to much about that?

You're worrying too much. Your FF will communicate with the supplier.

You haven't mentioned freight costs in your posts, whose paying those, you or is it included in your FF quote?

4. How does the supplier and my freight forward communicate to ensure the goods are there on time and avoid storage costs?

They will have their methods to do things correctly, as and when they get in touch and your supplier has been paid.

Ok so is it wrong or something I should be weary of that the supplier has given me a quote that has a line for "FOB to Yantian Port = $160" which is to be paid as part of the order?

That's normal. Your supplier has given you the option of them arranging the FOB (clearance and delivery to port, or you can instruct your FF to do this. Go for the former.

I have FF price for FOB terms.

So you need to add the $160.

I see - and a specific FOB invoice would basically just increase the unit prices of products?

It's all part of the importing costs, there's no way round it.

But reading online it seems normal for people to take the discussions and transactions off Alibaba if they trust the supplier. I guess I'm looking for reassurance on that and why would the supplier choose to take the order 'offline'.

Keep it online and pay for trade assurance.

the supplier then split the order into 2 orders on Alibaba for approx $3000 each because they said that if the order goes over $5000 and we use own FF then "I cannot use Yidatong for customs declaration, because it cannot be greater than USD5000"
"if total amount exceed usd5000, we must go with one-touch agency export, your agency must use our one-touch documents"

That's news to me, maybe they have other reasons to split the order in 2, perhaps to do with your rights of claiming if the shipment is wrong. Read the small (I mean tiny) print on the Alibaba Trade Assurance terms & conditions, as this may shed some light on it.


Have you confirmed the shipment is correct?

 

[Mister B]

In addition to the above, I would advocate proceeding with extreme caution-having read what you've written, the alarm bells are a ringing.

That site is not known as Alibaba and his forty thieves for nothing. IMHO.