Having read a few posts on people being scammed whilst dealing with China, I thought I would offer some advice on trading with China and how to avoid being scammed.
I have been trading with China for over 8 years and have only been scammed once (see Fortex Weilong Textiles post) despite repeated attempts.
The main problem is that all Chinese suppliers (until you have a trading history) will want payment in advance, usually 30% on order and 70% before shipping. They too are trying to avoid being scammed.
The basic rules I follow are:
1. Never, never, never pay via Western Union, PayPal etc, only ever pay for goods via TT transfer if under 10K and a Letter of Credit if above this amount.
2. Only make payments to BUSINESS accounts and never a private account, this can sometimes be different to the company name as many of the sellers are agents. However, this is how I got scammed so be careful.
3. Many companies will try and get you to pay to private bank accounts to avoid tax, refuse to do so and tell them you can only do B2B transaction and must have transparent accounting. If they are legitimate company they will begrudgingly accept this but will also probably put the price up.
4. Always get prices from several potential suppliers.
5. Make sure you ask for a price that includes all set up, printing, shipping costs etc. Make it clear that you want a final price otherwise after you have paid your 30% deposit undisclosed charges will suddenly appear.
6. If a price quoted for the goods is 25%+ cheaper than the average price quoted ask yourself why.
7. Dont believe what you are told and never make assumptions, clarify every point in detail as though you were speaking to a 3 year old.
8. Check their website under www.whois.com or equivalent and their details match up to the company youre dealing with and not hidden.
9. Once you have selected a supplier send them a Purchase Order even if it is a private sale and place the following text on the PO Any dispute arising from or in connection with this contract shall be submitted to China International Economic and Trade Arbitration Commission South China Sub-Commission for arbitration which shall be conducted in accordance with the Commission's arbitration rules in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties.
10. Remember that you are dealing with a different culture which honour based, even if they have made an error with your order they will not tell you as they never want to be seen to lose face. Always give them a get out so they can retain their honour and not feel it was their fault even though all parties know who is to blame. This way they are more likely to assist you in solving the problem.
11. Dont expect a refund if the goods are faulty but you will get them replaced if you pay to have them sent back which is only worthwhile on high value goods.
12. Sometimes customs will want an exotic holiday and require payment to release your goods, if this happens ask for documented proof of the charges and if very high ask to pay them directly to the customs. Corrupt officials do exist and you will have to grease them to get your goods. You just have to suck it up.
13. Never, never, never pay via Western Union, PayPal etc
14. Did I mention never, never, never pay via Western Union, PayPal etc
On a final note if something doesnt seem right walk away or accept that you may lose your money.
I have been trading with China for over 8 years and have only been scammed once (see Fortex Weilong Textiles post) despite repeated attempts.
The main problem is that all Chinese suppliers (until you have a trading history) will want payment in advance, usually 30% on order and 70% before shipping. They too are trying to avoid being scammed.
The basic rules I follow are:
1. Never, never, never pay via Western Union, PayPal etc, only ever pay for goods via TT transfer if under 10K and a Letter of Credit if above this amount.
2. Only make payments to BUSINESS accounts and never a private account, this can sometimes be different to the company name as many of the sellers are agents. However, this is how I got scammed so be careful.
3. Many companies will try and get you to pay to private bank accounts to avoid tax, refuse to do so and tell them you can only do B2B transaction and must have transparent accounting. If they are legitimate company they will begrudgingly accept this but will also probably put the price up.
4. Always get prices from several potential suppliers.
5. Make sure you ask for a price that includes all set up, printing, shipping costs etc. Make it clear that you want a final price otherwise after you have paid your 30% deposit undisclosed charges will suddenly appear.
6. If a price quoted for the goods is 25%+ cheaper than the average price quoted ask yourself why.
7. Dont believe what you are told and never make assumptions, clarify every point in detail as though you were speaking to a 3 year old.
8. Check their website under www.whois.com or equivalent and their details match up to the company youre dealing with and not hidden.
9. Once you have selected a supplier send them a Purchase Order even if it is a private sale and place the following text on the PO Any dispute arising from or in connection with this contract shall be submitted to China International Economic and Trade Arbitration Commission South China Sub-Commission for arbitration which shall be conducted in accordance with the Commission's arbitration rules in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties.
10. Remember that you are dealing with a different culture which honour based, even if they have made an error with your order they will not tell you as they never want to be seen to lose face. Always give them a get out so they can retain their honour and not feel it was their fault even though all parties know who is to blame. This way they are more likely to assist you in solving the problem.
11. Dont expect a refund if the goods are faulty but you will get them replaced if you pay to have them sent back which is only worthwhile on high value goods.
12. Sometimes customs will want an exotic holiday and require payment to release your goods, if this happens ask for documented proof of the charges and if very high ask to pay them directly to the customs. Corrupt officials do exist and you will have to grease them to get your goods. You just have to suck it up.
13. Never, never, never pay via Western Union, PayPal etc
14. Did I mention never, never, never pay via Western Union, PayPal etc
On a final note if something doesnt seem right walk away or accept that you may lose your money.