Is this a strange way of paying a Chinese supplier?

[newskincarebiz]

I'm working with a new packaging supplier.

On the Made in China website they are a Gold member since 2020 and an audited supplier.

They have agreed an unusually low MOQ to custom make some packaging for me on the understanding that our second order will be bigger.

We have been working closely together and they seem good.

It has come to making payment to them for the first batch of goods and he says that his finance dept has told him that they will have difficulty accepting the payment from paypal under their company account. No invoice has been raised yet and I haven't tried to make any payment to them. He has asked if I can send it to his personal Paypal account instead and that he'll send me an invoice soon. If not to his personal paypal account then asking if I can wire transfer it to their HK bank account instead.

Does this ring alarm bells?

 

[fisicx]

Does this ring alarm bells?

Yes!

I'd put money on you making a payment and not seeing the packaging or an invoice.

Talk to @MY OFFICE IN CHINA - Ron will help you out.

 

[newskincarebiz]

Presumably the only way to do it is to send to their company Pay Pal right?

 

[fisicx]

Presumably the only way to do it is to send to their company Pay Pal right?

Yes. When you get the invoice you will know it's legit. And shouldn't you really being making a bank transfer?

 

[newskincarebiz]

I've asked them to send me an invoice before any payment is made.
I had assumed that PayPal would offer more protection than a bank transfer, but actually because it's custom goods then seems I'm pretty stuffed under the Buyer Protection thing offered by PayPal.

 

[MOIC]

A few questions:

1. Request an invoice first and check all the details. Don't rely on what you read on the 'Made In China' site.

2. What due diligence have you done on the company?

3. Have you received physical samples?

4. Are there any modifications to carry out and has this been confirmed? Skin care packaging must include specific information.

As it's the first transaction, insist on paying to the company bank account, AFTER all the above has been done.

 

[WaveJumper]

Interesting as all my dealings with Chinese manufactures in the past had to be through bank transfers none would use PayPal. I would defiantly take on board all the good advice above

 

[newskincarebiz]

Ok I need your help. I replied last night saying I'd want to transfer it to a business bank account or asked whether he has AliBaba trade assurance. Also asked to send me an invoice. Below is what I got back. He also sent me a very basic Excel invoice, it wasn't a document. It was an Excel document with their company logo copied at the top and a puported invoice number (could be anything).

When he refers to Alina in his text below he refers to the AliBaba supplier providing us with the bottles (completely unrelated to him, as far as I am aware - I was the one who put them both in touch).

"Regarding the payment, I am so sorry for the inconvenience caused to you. Our US dollar account has been froozed, due to the customer and account information of the previous fund is inconsistent, so that the account needs to be temporarily closed. That's why our account dept. asked you pay the payment to our HK account. Understood you want to pay by AliBaba trade Assurance account, as we did not have an AliBaba account yet, is it possible you pay for the payment to Alina once the bulks ready? Then Alina can helps transfer the money to our company via local Chinese bank directly. Please confirm and I will liaise up with Alina accordingly."

The fact he is comfortable with me giving it to ALina (who does have Trade Assurance) makes me a little more comfortable, but I must admit it sounds a bit weird? Their USD bank account frozen!?

 

[MOIC]

Find another supplier!

A frozen bank account points to irregular activities, or worse.

 

[fisicx]

Alarm bells ringing all over the place!

 

[newskincarebiz]

Thanks. Agree. I am so glad I investigated this.

I have been corresponding with him - in huge detail - for 3 months. It's a small order for them, yet he chases me if I don't get back to him. The level of detail and his knowledge seems second to none on the type of printing and packaging we need, but I smell a rat. Also why have no AliBaba account? It's bizarre.

 

[MOIC]

Better be safe than sorry.

 

[fisicx]

It's a small order for them.....

It sort of feels like he is doing this as a private order off the books. Or he's pretending to be working for the company but getting his mate in the local print shop to to the labels and getting his mum to stick them on the bottles.

 

[newskincarebiz]

TBH I think it's a cash in hand type job.

 

[newskincarebiz]

This is the latest...

The bank still not confirm a firmly date to us yet, they just need us submit various document for their audit.

It is fine to ask your agent in Shenzhen to visit our company. You can ask them contact me at 136-3198-2176 anytime. [I said I was considering appointing an agent and could they meet with him at the company]

4. We have registed on Made-in-China website already. Which is the top two sites as same as AliBaba.

5. Once the dummy ready, I will send the pictures for your reference first and send the sample to your office immediately.

Thoughts? It's an offer I don't want to lose, it would put us back to square 1 and months of work lost, but equally of course I want to be safe. I do think it's an off the book type job.

 

[WaveJumper]

Walk away

 

[Paul Kelly ICHYB]

Don't touch - it looks like a duck.......

 

[MBE2017]

In life you get warning sign OP of deals to avoid, often very late, often so subtle people miss them. In your case you have several alarms going off together, and yet you still wish to continue.

Now ask yourself do you prefer to lose three months work and explain to your company you felt uncomfortable for the reasons detailed, or explain to them why you have lost their money, despite all the warning signs.

Quick hint. One course of action will make you look like you know what you are doing, the other could lead to the sack.

 

[WaveJumper]

What sort of packaging are you trying to source

 

[newskincarebiz]

I agree with all of this!

He's now agreed to meet with our sourcing agent (which we're looking to appoint on a quality control basis only).

It's tube / cylinder style packaging. But the first order is VERY low MOQ, I'm talking a total of 70-100 units, with 4 different designs. Second order we know will be bigger but the actual product for the second order not ready for another 12-16 weeks hence a small limited launch first.

 

[newskincarebiz]

The meeting with the sourcing agent btw is to see how far I can string this guy along.

 

[Deleted member 59730]

What are your terms? 60 days? 90 days?

When the product arrives in your hands you start counting the 60 or 90 days before you pay them.

For small qunatities I'd source in the UK ore before Brexit in the EU.

 

[MOIC]

It sounds to me that the guy you're speaking with, is using a factory to produce the goods for you.

An order for 100 units over 4 designs is not generally something a factory will entertain.

My advice, if you want to go ahead, is to first confirm physical samples.

Also take on board that shipping 100pcs of the cylinder packaging by air will be expensive, as it will be calculated by volume and not by weight.

Shipping costs is a very important element to take into account when buying from China.

Ask your agent to contact the factory landline number and not his mobile number, which he's given you and ensure he works for the factory.

I would also encourage your agent to carry out a factory evaluation, especially if you're going to use them in the future.

The fact that their bank account has been frozen, is sufficient reason to put me off.

 

[newskincarebiz]

I have an agent that will do a quality check on the products. This guy has said he will agree to no payment from me until the agent has done his quality check, and he will also do the dummy up front without payment.

The package is likely to be 8kgs (I am told), he has quoted DHL $250. It is such a low MOQ that no one else will touch it and it’s impossible to get any UK suppliers to quote given the numbers, so I’d be willing to suck up that shipping cost as well as the VAT and duties on entry in to the UK if it’s a flyer.

If he’s doing it as a job on the side for a bit of extra cash into his personal account I can’t say I’m too bothered if he doesn’t receive payment until my agent has checked them (and possibly assisted with the shipment too). Am I missing something?

 

[MOIC]

What's the landed cost including product, shipping, VAT, Duty & agent fee?

 

[MBE2017]

Am I missing something?

So let’s say the sample order is supplied and you decide to use them, would you be willing to send £10k, £20k?

Your decision, but make sure you are covered for future orders.

 

[Ozzy]

Am I missing something?

I'm a little surprised you still seem to keen to see this transaction through when there are so many alarm bells, and everyone is saying the same thing to you.
This isn't the strongest supply chain position to start your business from. Working on the expectation that your business is going to be a success, and that you are going to need to place repeat orders into the future, you need a strong and stable supply chain.

Have you considered the CBBC (China Britain Business Council), or the British Chambers of Commerce office in China, or using OMIS from the Department for International Trade? That's without plugging the services of someone like @MY OFFICE IN CHINA perhaps.
There are a number of trusted and Government supported services that exist to help UK businesses trade internationally and safely with China.

It's not too hard to get a factory tour by anyone, I had loads. I get a feeling you don't want to hear this, but in the interests of having a stable sustainable business you should pay heed to some of the comments here.

 

[MOIC]

The OP should use her agent in Shenzhen (and presuming the factory is in Shenzhen too) to carry out a supplier evaluation, not too is simply false economy.

 

[fisicx]

IIf he’s doing it as a job on the side for a bit of extra cash into his personal account I can’t say I’m too bothered

I would be! It means there is no contract in place to place a larger order.

Can't you just buy 100 bottles of ebay and get some labels printed up locally?

 

[BusterBloodvessel]

Why are you even entertaining sourcing 70-100 pieces of a low value packaging from China. Forget it. If you can’t find it in the uk, you’re looking in the wrong places. If needs be, tweak what you require slightly and take something off the shelf.

sounds like alarm bells left right and centre to me although one thing I would say is receiving an invoice as an excel file isn’t unusual.

 

[MOIC]

Why are you even entertaining sourcing 70-100 pieces of a low value packaging from China.

Agree, unless it's a test run for a subsequent order of 000's

one thing I would say is receiving an invoice as an excel file isn’t unusual.

Agree, as long as it has the following included:

Full company name

Full company address

Landline number

Email address using the company domain

Contact person looking after your account

Payment terms

Bank details

Incoterms

Delivery date

Company stamp

The above are just basic details.

The invoice you agree to is in effect your contract with the supplier and should include much more detail.

 

[newskincarebiz]

Ok so I have researched this to the nth degree for hours over the past 48 hours.

My agent in China will do a factory check, and can also do a quality check of the stock. He says however that the former wouldn't really be necessary if no payment is made up front for the goods and the agent checks them for me (I tend to agree).

The reason I'm going to China for this is because the boxes are tube / cylinder style, all with our logo / name of product etc on them (x4-5 different products). The shipping cost for the first order of 70-100 boxes is approx USD 550 as it's 46kg (so the [query "dodgy"] supplier in China is telling me).

The cost of the items is USD 1,200.

I'll need to add tax and duties on to that.

I have looked today at asking a plethora of UK companies to either quote for this type of work (based on our quantities) or have now looked into buying off the shelf boxes for the individual jars / bottles and just going bespoke for the gift boxes (so cutting out China altogether given the quantities).

Where, WHERE, do people find off the shelf packaging in the UK for moisturiser jars / serums etc? It seems nigh on impossible to find. I am clearly missing something but I am pretty savvy on these things yet I am tearing my hair out trying to find anywhere.

 

[Chris Ashdown]

https://glassbottles.co.uk/product-category/beauty/glass-cosmetic-bottles/

 

[newskincarebiz]

Sorry I should've been clearer. It's the packaging that house those bottles, the outer boxes. In this case we want tube boxes. But thanks though for that link.

 

[fisicx]

https://www.gocustomboxes.co.uk/cosmetic-boxes/

 

[newskincarebiz]

@fisicx Thanks... had enquired, won't do tubes.

 

[Chris Ashdown]

Many tubular bottles come in square boxes, why are you demanding tubular? good reason or just a feeling . I would have thought impossible not to find a UK supplier

 

[newskincarebiz]

@Chris Ashdown Because the skincare market is saturated with standard rectangular boxes. One of our different features is the packaging, and the tubular style differentiates.
There are 1000s of them available in China but again higher MOQ/s and the shipping on our low number kills it. They come made as a tube cylinder, they’re not squares inside. What we want is very bespoke, happy to pay higher for it but atm the “luxury” (and I mean top end, Harris’s suppliers type thing) are the only ones that really entertain it but they want upwards of £30 a box! It’s absurd.

An update on my dodgy geezer in China though. He sent me an image of my serum bottle (which he holds as a sample) alongside a couple of tube boxes, all of which were sat on his desk in China. One of those tube boxes had the Instagram handle of the company visible. So I messaged that company asking if they’d dealt with him. They’d never heard of him! They think he has either taken a screen shot of their tube (unlikely given my serum bottle was situated alongside it) OR has purchased product from them and is perhaps suggesting they made the tube.

Suffice to say I’m not going anywhere near him. But I’m stringing him along as much I can in the meantime. Just asked him if he did the work for this company, be interesting to see what he says back.

 

[newskincarebiz]

Sorry should’ve read Harrods’ suppliers.

 

[OldWelshGuy]

While I understand the tubular packaging, it's impossible to stack on the shelf.