Regarding escrow.com I agree that it is a great payment system....for retail or wholesale purchases, but not for purchases from a manufacturer. If you are looking at making retail or wholesale purchases then you are best to do that back home as it will be much safer, quicker, and essentially cheaper as you will be sure to get what you pay for and will have the consumer laws to protect you if you dont.

Buying in China is really about buying from manufacturers in big quantities and low prices and then wholesaling these yourself to smaller buyers.

Why dont manufacturers in China accept escrow.com? Quite simply because they do not have to as they have good existing business using proven international trade payment methods such as TT and LC.

Most manufacturers in China produce orders after the order has been received. They do not hold stock. So with escrow.com there are two huge disadvantages to the supplier:

a. they need to wait longer to get paid. Very few buyers would ship a large order by air and sea shipment takes one to two months. Why would a supplier choose to wait one to two months to receive payment?

b. escrow.com leaves the opportunity for the product to be returned regardless of the quality which is an issue that factories in China cannot accept. I understand that the buyer is not supposed to be able to return product unless there is a legit problem but these sorts of systems are open to abuse and non-English speaking supplier is going to be at a real disavantage. They do not want to hold stock so the last thing they want is a shipment to be returned even if the buyer covers the return shipping costs.

So if you want to do business in small quantities using western payment methods then you best stick doing business with western businesses.

If you want to take advantage of the benefits that dealing direct with factories in China has to offer then you best accept the relevant payment terms and then be smart about protecting yourself by ensuring that you pay for a preshipment inspection BEFORE you release final payment.

Catfish wrote:

I want to know more about preshipment inspections. I am looking to buy my first shipment of products some time this year.



I have gotten a sample from the factory and am testing it out now, it seems rather good and acceptable for what I purpose to do with it. But I have heard stories of Chinese exporters sending damaged goods and it is very hard to get refunds etc. The other thing is, when I query the supplier about any sort of warranty or replacement terms for units that arrive DOA he never answers the questions. Is it very common to find that Chinese suppliers offer no warranty on their goods?



I don't mind if they fail, I just want to know if I can get them replaced - or - want to know how often they will fail so I can factor that into my onselling prices.



Where can I find someone to do a preshipment check on my orders?

All sample from suppliers are the number one quality level, they usually select the best one as the sample to buyer to get the order first, but who knows what would be happened with the bulk production.

As for warranty and or replacement, you need to negotiate with them, you can also give them your warranty requirement, such like give them an term on the PO "Any defective items will be credited to the next order", or ask them to give a percentage of replacement for the parts, all these should be confirmed before you give order and state all these terms on the order clearly.

It is wise to send one to have a pre-shipment inspection, so, once you found the percentage of the defective is high after inspection, you can require the factory to return them to production line.

I am doing purchasing, and can help you on the inspection, if you need my help, feel free to contact me.

I know that it is not always the case but to my mind if you are a buyer who is trying to buy in China then you should expect to be ordering in decent quantities if you want to deal direct with manufacturers. There is a big difference between the buyers and sellers that deal with small orders (by the piece or by the carton) and the buyers and sellers that deal with normal orders (by the pallet or container load).

If you are buying from manufacturers then the standard practice is for defective items to be credited off future orders. You can get replacement parts sent with your order but you need to factor in the costs of repairs. In most cases it is more economical to throw faulty items away and get a credit for them, but this means that you need to place a new order with a factory!!

Warranties and guaranties are something that you pretty much need to move away from thinking that you can find a deal where you are covered by way of immediate repairs or replacement. If you want that sort of arrangement then you best buy from a wholesaler back home who can offer that.

No matter how good a sample may be and no matter how good your efforts in ensuring that the factory understands your needs it is not uncommon for factories in China to make mistakes. The only way to know for sure that you are not being shipped rubbish is to check it before it gets loaded into the container and sent - that is a pre-shipment inspection. Problems found at that stage can be reworked at no cost to you before shipping. Once the order ships from the factory then you are on your own.

Many new buyers think that the cost of a pre-shipment inspection is not worth it but they soon come around when they receive their container load of three legged chairs!!!

It is not a case of Chinese manufacturers trying to rip buyers off, but more a case of Chinese staff in factories not realizing that the issue is going to be a problem and that the problem is amplified ten times once the products turn up in a foreign country.

You can employ an agent to do the work for you or you can pay a professional inspection company.

adrianmf wrote:

Sorry, but I know everyone is trying to sell their services but can we please stop the BS about compan ies not accepring LC's & pre-shipment inspections! I have been doing business in the Far East for over 10 years & NEVER had a company reject a pre-shipment inspection request or an LC without the agreed terms & conditions. Why are you try to mislead the parties in this forum?



Great, then you know that their are entire industries that no longer except letter of credit, including purchases made by WalMart and Home Depot.  And, yes, we have had people deny LC because they don't want to pay the taxes to the Chines government. 


Are you saying that my experience did not happen?


My Uncle just placed an order for 3 containers of cabinetry.  TT only.  No LC was an option.  I guess we are both liars.

Hi Ranger,

You are obviously not familiar with Ali-pay, which is actually challenging Ebay in China.  Because of the mistrust, Ebay initially failed intra-China.  Without the escrow system in China, ecommerce can't work.

Our entire real estate system in the US is based on escrow payments during the deal.  The better question is, why would someone putting out a high quality product be unwilling to wait a few more days for payment, especially if it is shipped by air.

I spoke to the Commerce Consulate representative for the People's Republic of China here in Chicago again, today.

You know what he said?

If a company demands TT, "Don't trust them."  I'll repeat that, if a company demands TT, "Don't trust them."

Now, if the representative for the People's Republic of China here in the United States is saying that, do you think he is making it up?

He said find an agent in the United States that  you could make payment to here so you have legal recourse. 

I wonder if you called the US Consulate General in Guangzhou if they would say, universally, "Don't trust Americans."

Escrow is the ONLY payment that protects the buyer and the seller.

And, yes, don't sample orders make sense before buying a few containers full of product?

And, if someone can't fill a small order correctly, why would you trust them with a large one.

In the US, our deals are based on win win.  It seems you advocate all the protection in favor of the Chinese factory.  Then again, maybe you aren't who you say you are, either.  Maybe you are a paid salesman to make it easier for the Chinese businessman.  There is no way to know.

And, considering that I have spoken to at least ten people who would make buys if they could protect themselves, yes, business would increase 10 fold.  I have had people contact me from around the US expressing their frustration in dealing with a culture predicated on mistrust.  I'm sorry you have such a negative opinion on Western business practices.

And, again, search for "alipay" on Google and you will see that the entire alibaba.com system of payment for China, within China, is by escrow.  In fact, Ebay had to go to an escrow system intra-China as well, otherwise it would not work.  I guess what's good for the goose ISN'T what's good for the gander.

By the way, I do appreciate your insite, tact, and diplomacy. 

In this case, your facts are a bit off.

 

glenndavid wrote:

 

Good morning Glenndavid,

This is just a request for you to resend me your comment posted on Alibaba in response to the debate regarding Escrow and other company payments.

Your comment re: if company's are unwilling to accept Escrow and only T/T payments they are probably not legit (according to Chinese Authorities". I have been conned out of money via Western Union payment transfer and I am just exploring or hoping ot find I should say of suppliers willing to accept Escrow payments.

Your response would be highly appreciated