Hi Guys,

We have heard enough of buyers got scammed by XXX manufacturers.

Maybe is time now to hear some stories from the manufacturers side.

I will be very happy if some manufacturers can post some of their incidents here.

This will improve the buyers and sellers of understanding,

Regards

Tom Law

Quoting from [artboxmy]:

Hi Guys,

We have heard enough of buyers got scammed by XXX manufacturers.

Maybe is time now to hear some stories from the manufacturers side.

I will be very happy if some manufacturers can post some of their incidents here.

This will improve the buyers and sellers of understanding,

Regards

Tom Law

I actually have a lot of these stories from good friends over here. I have one American friend who has done gardenware for 8 years. he built up one line of business with a customer who sold into a major big box retailer in the US. He kept extending his customer's credit to build the business, then when payment was getting too delayed he tried to get his customer to ante up. At that point my friend had 10 containers of goods at port ready to ship out. The customer bribed my friend's manager to release the containers without his consent. The end loss: USD2+ million.  Lesson Learned: Don't extend credit to customers beyond the amount of profit you've earned from them, unless you can live with the loss...

Most legitimate suppliers in China are smart enough and professional enough to protect their investment by insisting on practical and safe payment methods.

Credit is almost unheard of when buying product in China.

The idea of paying 50% cash on delivery would only be suggested by a scammer. No legitimate supplier would take this risk. For a scammer who is not sending any product getting 50% for nothing is better than nothing so they may offer these terms. At the end of the day though you would lose 100% of your investment even if you only pay 50% of the order amount.

 

Egernia ... that is only true of the small transactions you deal in.

Substantial Chinese manufacturers are on par with their Western counterparts in respect of credit policies to gain large orders.

Several lines my companies import are facilitated by generous unsecured credit terms granted after credits checks and visits to key retailers on whose behalf I import. 

Quoting from [Egernia]:

Most legitimate suppliers in China are smart enough and professional enough to protect their investment by insisting on practical and safe payment methods.

Credit is almost unheard of when buying product in China.

The idea of paying 50% cash on delivery would only be suggested by a scammer. No legitimate supplier would take this risk. For a scammer who is not sending any product getting 50% for nothing is better than nothing so they may offer these terms. At the end of the day though you would lose 100% of your investment even if you only pay 50% of the order amount.

Agree to the floor over my head,  "Credit is almost unheard of when buying product in China". This can not be the opinion/s of AN EXPERT.

Quoting from [Lawyersun]:

Quoting from [Egernia]:

Most legitimate suppliers in China are smart enough and professional enough to protect their investment by insisting on practical and safe payment methods.

Credit is almost unheard of when buying product in China.

The idea of paying 50% cash on delivery would only be suggested by a scammer. No legitimate supplier would take this risk. For a scammer who is not sending any product getting 50% for nothing is better than nothing so they may offer these terms. At the end of the day though you would lose 100% of your investment even if you only pay 50% of the order amount.

Agree to the floor over my head,  "Credit is almost unheard of when buying product in China". This can not be the words of AN EXPERT.

As a former export businessman, I heard lots of stories that after some merchants got Chinese supplier's cargos and then refused to make the payment upon agreement/s, some of them are from so-called developed and law-ruling coutries with very nice credit systems, like our great USA, one of them stole a sum of USD50,000.

As a lawyer, some new clients of our firm got the contracts or lawyer's letter we drafted for him in his hand, and then disappeared entirely, what he owEs our firm, was several hundred "Huge and Fat" bucks, it's funny that when he was in CHina, he lived in a 5 star hotel. Some of them are from so-called developed and law-ruling coutries with nice credit systems, like our great Australia.

China has one proverb: all crows in this world are same black.

 Credit is almost unheard of when buying product in China.

Egernia, I too have to agree with Aussie.  I have clients importing from as low as 5 FCL's  to 20 FCL's a month from Chinese suppliers that extend credit to them.   Agree there are risks with this, but what better way to grow their own businesses in that they are operating at full factory capacity and have opportunities for expansion.  If you were to take a look at those Chinese manufactureres that are growing and those that are stagnant and operating at 60% capacity, or less you will have an idea of those business who thru their reseach of buyers and their creditworthiness are in fact extending credit to buyers.  

You have talked about L/C's being a more recognized form of payment for goods.  But based on what you have said in this thread I dont think you understand the full use of Documentary Letter's of Credit.  L/C's can be "At Sight" but they can also be utilized as Time Drafts that extend credit up to 180 days.  That my friend is an extension of credit to a buyer,  then there is the good ole Standby Letter of Credit, and Documentary Collections which also extend credit to buyers.

IM not sure what the amount of importing you do nor do I want to get into a war of words because 99.9% of the time you have helped alot of newbies .  But your statement leaves me befuddled that any active importer would not know that manufacturers all over the world extend credit to their buyers.  If you retail or wholesale in Australia and accept credit cards you are extending credit as well, for I know of no company that deposits funds in business accounts at the time of acceptance of the credit card.  Instead the companies settle with merchants either monthly or bi-monthly.  Theres going to horror stories as Rob has pointed out, but also as aussie stated they may not have actively mitiagated their risk.

Ranger