How to Avoid Problems In When Buying From China
Post 1 of 44
I am pretty tired of reading of about all of the problems people have. So here is how to avoid them.
1.) Know your products that you want to buy:
What are the raw materials / parts / grades at a minimum.
How the product is assembled; the cost of energy, tooling and labor.
What kind of packing you want. have the files in PDF at least.
Know logistics and customs costs.
This way you can calculate what you want to pay for it. then know the standards on the product.
Know your main critical quality problems that you think you will have.
2.) Make a plan about what you want to accomplish in terms of buying. A yearly purchase schedule, and know your acceptable payment terms.
Basically make sure you know exactly what you want to do before contacting the factory. Biggest problem buyers have is they do not want to take the time formulate a plan and are not prepared to buy the product they want.
3.) Research suppliers: make a list of potential suppliers. When talking to them ask this question before any other.
I want a business license faxed to me?
then I am going to visit or send someone to check your factory?
i want sales quotation signed and stamped with factory seal from the factory?
4.) When dealing above it is probably best to sleect a professional buying office / agent that is incorporated in china. What you need from them. Realize that they will want 5% to 10% of the product price + expense deposit. YOU ARE NOT GOING TO GET GOOD SERVICE FOR FREE. Inspection / sourcing companies that offer 50USD for the day or by the man hour are not going to give you good service. If they do not know your products how can they inspect them and how do u know if the inspector is even remotely qualified.These are just scammers trying to take advantage. A good company knows how prevent and resolve issues after they have been discovered. BOTTOM LINE IS GOOD SERVICE COSTS AND YOU HAVE DEVELOP YOUR PLAN WITH THIS COMPANY AND IT TAKES TIME TO MAKE THIS HAPPEN CORRECTLY.
Ask for license?
Ask if they will provide transparent service? this means you preview and sign off on all purchase contracts prior to signing with factory.
Ask them for an agent contract that is signed and sealed with there company stamp? (This should state payment terms, services provided and dispute resolutions methods at a minimum)
remember you are sigining contracts with this company and not the factory. So this company is responsible for getting the goods for you and the factory is not responsible so you need an incredible amount of transperency / honest cooperation. And you need to have input into the contract drafting.
make sure this company has a lawyer.
5.) Make sure all contracts are china legal. If you are not able to do this then carefully select a professional buying agent / office. These can be trading companies, but most of the time they are foreign owned trading companies / offices.
6.) Focus on prevention: QC in production contract. test reports. actually testing what you buy before you buy it. QC'ing the product and rejecting replacing it before it ships. Again you will need a company to perform this service. make sure they are reliable and china legal.
6.) Prevention, prevention and prevention before your take legal possession of the products. verify that they are what you want before you buy and the factory or agency is that you have selected is doing what you want.
this requires at lesat one trip to china. Professional buying agent will save you a couple more trips to china if you are prepared. generally discuss with the buying agent to make sure your adequately prepared before coming with samples, drawings and your plan.
god i hope this helps some of you people to be better prepared. if you a question let me know
1.) Know your products that you want to buy:
What are the raw materials / parts / grades at a minimum.
How the product is assembled; the cost of energy, tooling and labor.
What kind of packing you want. have the files in PDF at least.
Know logistics and customs costs.
This way you can calculate what you want to pay for it. then know the standards on the product.
Know your main critical quality problems that you think you will have.
2.) Make a plan about what you want to accomplish in terms of buying. A yearly purchase schedule, and know your acceptable payment terms.
Basically make sure you know exactly what you want to do before contacting the factory. Biggest problem buyers have is they do not want to take the time formulate a plan and are not prepared to buy the product they want.
3.) Research suppliers: make a list of potential suppliers. When talking to them ask this question before any other.
I want a business license faxed to me?
then I am going to visit or send someone to check your factory?
i want sales quotation signed and stamped with factory seal from the factory?
4.) When dealing above it is probably best to sleect a professional buying office / agent that is incorporated in china. What you need from them. Realize that they will want 5% to 10% of the product price + expense deposit. YOU ARE NOT GOING TO GET GOOD SERVICE FOR FREE. Inspection / sourcing companies that offer 50USD for the day or by the man hour are not going to give you good service. If they do not know your products how can they inspect them and how do u know if the inspector is even remotely qualified.These are just scammers trying to take advantage. A good company knows how prevent and resolve issues after they have been discovered. BOTTOM LINE IS GOOD SERVICE COSTS AND YOU HAVE DEVELOP YOUR PLAN WITH THIS COMPANY AND IT TAKES TIME TO MAKE THIS HAPPEN CORRECTLY.
Ask for license?
Ask if they will provide transparent service? this means you preview and sign off on all purchase contracts prior to signing with factory.
Ask them for an agent contract that is signed and sealed with there company stamp? (This should state payment terms, services provided and dispute resolutions methods at a minimum)
remember you are sigining contracts with this company and not the factory. So this company is responsible for getting the goods for you and the factory is not responsible so you need an incredible amount of transperency / honest cooperation. And you need to have input into the contract drafting.
make sure this company has a lawyer.
5.) Make sure all contracts are china legal. If you are not able to do this then carefully select a professional buying agent / office. These can be trading companies, but most of the time they are foreign owned trading companies / offices.
6.) Focus on prevention: QC in production contract. test reports. actually testing what you buy before you buy it. QC'ing the product and rejecting replacing it before it ships. Again you will need a company to perform this service. make sure they are reliable and china legal.
6.) Prevention, prevention and prevention before your take legal possession of the products. verify that they are what you want before you buy and the factory or agency is that you have selected is doing what you want.
this requires at lesat one trip to china. Professional buying agent will save you a couple more trips to china if you are prepared. generally discuss with the buying agent to make sure your adequately prepared before coming with samples, drawings and your plan.
god i hope this helps some of you people to be better prepared. if you a question let me know
09 Nov 2007 01:30
Post 2 of 44
Replying to [Chinasolutions]:thank you so much.god blessed for us
11 Nov 2007 17:58
![[em19]](http://img.alibaba.com/images/eng/style/icon/emoticons_great.gif){kind=icon}
Post 4 of 44
Replying to [Chinasolutions]:
When Alibaba gold Members start cheating with buyers and after receiving deposit for samples what you will do???
When Alibaba gold Members start cheating with buyers and after receiving deposit for samples what you will do???
12 Nov 2007 00:09
Post 5 of 44
Replying to [Ammeet]:
First, my situation is different, im in China and I don't pay for samples without visiting the factory first.
But if I was not in China. I would draft a sample contract. Saying that you are going to pay X amount of dollars or sample at cost. Not including the shipping. or you will pay for the shipping but not the sample something like this. I would state the following:
1.) The parties you and factory / trading company. Addresses.
2.) State that you are engaging them to buy the samples and they will deliver them within X amount of time after the date of security deposit.
3.) I would describe the samples very carefully of what your getting.
4.) I would then state the costs, qty's of samples all of these things.
5.) I would state that the english version of this agreement is legally binding and that you.
6.) Dispute resolution: I would say that if they do not deliver than you are entitled to your money back + all attorney expenses and other expenses and if this is not easily calculated they have to pay you 10,000RMB within 15 days from past due date of agreed upon delivery.
7.) If not go to court and I would state that all issues are to be resolved in the domicile of your consulates location = Shanghai.
Then send factory the agreement make sure that they will sign and stamp it with the factory stamp and mail the original to you. You need the original document; not a fax.
This many not keep you from getting cheated but it lets the factory know that you are serious about your business and generally they are less likely to cheat you becuase you have shown a capability to cause to them some problems.
Also, all Gold Supplier menas is that the company has paid Alibaba 5,000USD for the year. They will verify most any chinese company with money. So it means that they get preferential advertisement rights becuase of higher payments. that is all.
First, my situation is different, im in China and I don't pay for samples without visiting the factory first.
But if I was not in China. I would draft a sample contract. Saying that you are going to pay X amount of dollars or sample at cost. Not including the shipping. or you will pay for the shipping but not the sample something like this. I would state the following:
1.) The parties you and factory / trading company. Addresses.
2.) State that you are engaging them to buy the samples and they will deliver them within X amount of time after the date of security deposit.
3.) I would describe the samples very carefully of what your getting.
4.) I would then state the costs, qty's of samples all of these things.
5.) I would state that the english version of this agreement is legally binding and that you.
6.) Dispute resolution: I would say that if they do not deliver than you are entitled to your money back + all attorney expenses and other expenses and if this is not easily calculated they have to pay you 10,000RMB within 15 days from past due date of agreed upon delivery.
7.) If not go to court and I would state that all issues are to be resolved in the domicile of your consulates location = Shanghai.
Then send factory the agreement make sure that they will sign and stamp it with the factory stamp and mail the original to you. You need the original document; not a fax.
This many not keep you from getting cheated but it lets the factory know that you are serious about your business and generally they are less likely to cheat you becuase you have shown a capability to cause to them some problems.
Also, all Gold Supplier menas is that the company has paid Alibaba 5,000USD for the year. They will verify most any chinese company with money. So it means that they get preferential advertisement rights becuase of higher payments. that is all.
12 Nov 2007 00:33
Post 6 of 44
Replying to [Chinasolutions]: I am currently in the process of starting a martial arts retail outlet in u.k. and there is still plenty i need be sure of before hand, i am going to make a trip to china at the end of this month and i would much appreciate it if you could give me a bit of advice on how to source out a good supplier and china agent, i've made a list of a few manufacturers but would like to know where the best place would be to get my best supplier. If you could give me some advice it would be much appreciated.
Thankyou,
Prav
Dark Circle Martial Arts
Thankyou,
Prav
Dark Circle Martial Arts
12 Nov 2007 08:18
Post 7 of 44
Replying to [Chinasolutions]:
I think your approach is well intended, but not really practicable. Even a honest seller is unlikely to bother with buyers with such stiff demands.
Further, a contract is only meaningfull if it can be enforced. But with the poor legal situation in China you are unlikely to find a court judging in your favour since in a Chinese vs. Foreigner case the Chinese will get preferancial treatment as courts in China are heavily biased. They are even unlikely to look at the merrits and just decide the case against you.
But even in the unlikely scenario that you win, there is no way you can enforce the judgement.
Further, to set the legal place in, let's say Shanghai, is useless if the supplier is not directly in Shanghai.
I would rather suggest, fly to China and see that the factory really exists and really produce the goods that you want. Try to avoid dealing with trading companies as they might close if enough money got cheated.
I think your approach is well intended, but not really practicable. Even a honest seller is unlikely to bother with buyers with such stiff demands.
Further, a contract is only meaningfull if it can be enforced. But with the poor legal situation in China you are unlikely to find a court judging in your favour since in a Chinese vs. Foreigner case the Chinese will get preferancial treatment as courts in China are heavily biased. They are even unlikely to look at the merrits and just decide the case against you.
But even in the unlikely scenario that you win, there is no way you can enforce the judgement.
Further, to set the legal place in, let's say Shanghai, is useless if the supplier is not directly in Shanghai.
I would rather suggest, fly to China and see that the factory really exists and really produce the goods that you want. Try to avoid dealing with trading companies as they might close if enough money got cheated.
12 Nov 2007 17:59
Post 8 of 44
Replying to [Chinasolutions]:hello,
Please I want to start a brand new business .The product is from china,motorcycle spare parts.I dont know how to start because I am totally new.
Thanks
Please I want to start a brand new business .The product is from china,motorcycle spare parts.I dont know how to start because I am totally new.
Thanks
12 Nov 2007 20:54
Post 9 of 44
Replying to [Chinasolutions]: I'm also in china for last 7 years..
only since this 2006, many gold suppliers are doing scamms..
And for a sample worth of 24 / 25 US$ you can't start cheating cusomers or stop answering phone calls.
only since this 2006, many gold suppliers are doing scamms..
And for a sample worth of 24 / 25 US$ you can't start cheating cusomers or stop answering phone calls.
12 Nov 2007 21:24
Post 10 of 44
Replying to [xxxo]:hi,pls,contact with me ,i can deal with these questions.
12 Nov 2007 22:52
Post 11 of 44
Replying to [fraudbuster]:
My approach is to mitigate my clients risks by using the legal system inside China. I keep my demands realistic and they are not stiff becuase the manufacturer should be in compliance with the laws of China. Secondly, stiff demands eliminate problem suppliers quickly.
FYI contracts can and are enforced every day in China. I do not litigate in court my attorney's litigate on my behalf and I have a Chinese registered legal entity.
Yes you are right, that the courts are biased this is why it is extremely important that you select the resolution point in your contract when it is signed. Therefore the factory agrees to the location where arbitration and litigation will occur. This must be worded very specifically and carefully according to the law.
Yes, you can collect because before we file suit against a factory the court will freeze the factories bank account for the amount of money in dispute; until the issue is resolved. So the supplier had better come to the location of arbitration / litigation!
And yes, sometimes court cases are lost and the court has a different perspective and there is a black economy with corruption. However; sound contract management lets the factory know that you are serious about purchasing and if there is trouble that you have demonstrated capacity to cause problems.
I agree that you should visit the factory. I visit every factory before i do business and talk to the owner or upper management prior entering into any agreements.
Trading companies in China are like this: They are good becuase they give you access to a wide range of product quickly. Prices are usually a bit higher, but you are paying for them to manage the factory relationship / contracts. if the company does a good job then you get what you pay for. If the trading company is lazy just sending the PO to the factory and not signing a contract / talking the order out / inspecting the process then you will have problems.
Factories can only export the goods that they produce. Trading companies can export most any goods. This is a big difference if a factory tells you they can export any goods they are lying. They must use a trading company or own a factory and a Trading company.
My approach is to mitigate my clients risks by using the legal system inside China. I keep my demands realistic and they are not stiff becuase the manufacturer should be in compliance with the laws of China. Secondly, stiff demands eliminate problem suppliers quickly.
FYI contracts can and are enforced every day in China. I do not litigate in court my attorney's litigate on my behalf and I have a Chinese registered legal entity.
Yes you are right, that the courts are biased this is why it is extremely important that you select the resolution point in your contract when it is signed. Therefore the factory agrees to the location where arbitration and litigation will occur. This must be worded very specifically and carefully according to the law.
Yes, you can collect because before we file suit against a factory the court will freeze the factories bank account for the amount of money in dispute; until the issue is resolved. So the supplier had better come to the location of arbitration / litigation!
And yes, sometimes court cases are lost and the court has a different perspective and there is a black economy with corruption. However; sound contract management lets the factory know that you are serious about purchasing and if there is trouble that you have demonstrated capacity to cause problems.
I agree that you should visit the factory. I visit every factory before i do business and talk to the owner or upper management prior entering into any agreements.
Trading companies in China are like this: They are good becuase they give you access to a wide range of product quickly. Prices are usually a bit higher, but you are paying for them to manage the factory relationship / contracts. if the company does a good job then you get what you pay for. If the trading company is lazy just sending the PO to the factory and not signing a contract / talking the order out / inspecting the process then you will have problems.
Factories can only export the goods that they produce. Trading companies can export most any goods. This is a big difference if a factory tells you they can export any goods they are lying. They must use a trading company or own a factory and a Trading company.
12 Nov 2007 23:59