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GOLD! Sharing my lifetime experience in export/import. Product sourcing specialist.

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Walter Hay

Walter Hay

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I will number the points so that my answer will be easier to follow. @Blackman has given an excellent answer, but from my experience I am less optimistic about your chances of success.
Thanks. 1. Turns out their proforma invoice specifically said FedEx as the shipper. 2. If a seller ships FedEx air freight from China, does FedEx automatically handle the customs brokering, or does a certain FedEx product have to be ordered that gets it to your door vs picking up at a terminal and handling customs on your own?

3. One thing I learned is that especially now with the US tariffs it's very important to get the proper HTS code - some are subject to the tariff and some are not. When all was said and done there was the HTS code the seller provided that was inaccurate, the one that I and CBP agreed better described the item but was subject to the tariff and made the item ineligible for informal entry, and then one that the customs broker I had to hire found that best described the item and was not on the Section 301/25% tariff list.

4. This order was for one piece :/ it's a bulky item and China is the only source for it. I can see what you're saying to order something different that's smaller as a test before doing a larger order such as this. 5. The seller seems legit and the quality on the item is good, but they don't want to part with any money to make this right.

6. The seller's initial offer when I told them I had to spend 8 hours getting the item and $200 in money out of pocket was that they'd send me $100. Told them thanks but no thanks, escalated to Alibaba, and if they're no help I'll dispute on the CC. I'm asking for a lot more - I don't work for free and if they had performed as on the contract, or let me know before shipping it that they couldn't I wouldn't be having this issue. We'll see where it goes.
1. The Proforma Invoice, together with the Air Waybill should be sufficient proof that you have not received what was promised. I hope I am wrong, but in such situations Alibaba are little help. Whatever you do, you must do it quickly, otherwise Alibaba will forget about it.

2. FedEx shipments are automatically cleared by FedEx, and the clearance work, which should only take them a few seconds, is included in the freight charge.

My book explains in detail the difference between air freight and air courier. This, together with advice on how to avoid freigth scams has saved many people thousands of dollars. You might find the cost a good investment before placing your next order.

3. If the supplier had used FedEx or if you had used a freight forwarder you would not need to bother knowing what the HS code is. Your experience has highlighted the fact that choosing the right code can be very hit and miss, with costly consequences if you get it wrong.

4. @Blackman was referring to the large value of the order, not the large size if the product. Always start with small orders.

5. You need to learn how to tell if the seller really is legit. Don't believe what you read on Alibaba.

6. This is possibly the most important part of your post. My answer is that I would immediately ask my bank for a chargeback on the CC. This is because I think you will find that both the seller and Alibaba will make your claim drag out until you tire of it and give up, or until Alibaba says the time for lodging your claim, proof, answers to their questions etc., has expired. Either that or Alibaba will say that you don't have sufficient proof. They are a law unto themselves. Their word is final.

Sorry to be the bearer of bad news.

Walter
 
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LPPC

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In a study carried out by a manufacturer of desiccants, which are used to absorb humidity, it was found that temperatures in containers at sea rarely fluctuate, and humidity remains low.

The situation is different on land, and summer time temperatures inside a container can reach quite high temperatures.

However, in the test shipment from Japan to the Netherlands the temperature inside the container once on land at destination did not rise above 36°C.

Humidity was low while at sea , but rose as high as 90% on land.

My conclusion would be that it would be a good idea to pack and seal the package as completely as possible, and as an added precaution include desiccants inside the outer package.

Walter
Sorry for the late response. I have been very busy the past week.

So if I understand it correctly, temperatures at sea do not fluctuate much between the different seasons. So in the summers it does not get much warmer than in the other seasons. This makes it pretty safe to transport a product with glass transition level of 60 degrees Celsius (ofcourse, I take full responsibility for my decisions).

''However, in the test shipment from Japan to the Netherlands the temperature inside the container once on land at destination did not rise above 36°C.'' --> So the temperature did not raise above 36°C while it was in the Netherlands. The temperatures in the Netherlands almost never go above 36°C, so I don't understand what kind of significance this finding has? I might misunderstand it.

So I should pack and seal the package as completely as possible and include desiccants against the humidity. I suppose sealing it does not make the inside of the package much warmer? If it is completely sealed, then air can not get in to cool it down.

Thank you very much.
 
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Walter Hay

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Sorry for the late response. I have been very busy the past week.

So if I understand it correctly, temperatures at sea do not fluctuate much between the different seasons. So in the summers it does not get much warmer than in the other seasons. This makes it pretty safe to transport a product with glass transition level of 60 degrees Celsius (ofcourse, I take full responsibility for my decisions).

''However, in the test shipment from Japan to the Netherlands the temperature inside the container once on land at destination did not rise above 36°C .'' --> So the temperature did not raise above 36°C while it was in the Netherlands. The temperatures in the Netherlands almost never go above 36°C, so I don't understand what kind of significance this finding has? I might misunderstand it.

So I should pack and seal the package as completely as possible and include desiccants against the humidity. I suppose sealing it does not make the inside of the package much warmer? If it is completely sealed, then air can not get in to cool it down.

Thank you very much.
Outside temperatures can affect the inside temperatures quite surprisingly, but total sealing should minimize the increase in inside temperature. Unsealed. the inside temperature can rise quite a bit above the outside temperature, but if that doesn't exceed 36°C it should not be a worry.

Walter

I would seal completely, and the use of desicccants would be just in case there was a leakage of outside, humid air.
 

LPPC

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Outside temperatures can affect the inside temperatures quite surprisingly, but total sealing should minimize the increase in inside temperature. Unsealed. the inside temperature can rise quite a bit above the outside temperature, but if that doesn't exceed 36°C it should not be a worry.

Walter

I would seal completely, and the use of desicccants would be just in case there was a leakage of outside, humid air.
Thank you. So I will totally seal the cartons, that is clear.

But should the container be completely sealed also or is it better to have some ventilation? If I remember correctly and if I understood it well, you once said that if the outside temperatures are high then we should not have a totally sealed container because or else it will get too hot inside. The container should have some ventilation.

But then also the question arises through which route the ship will go to (China --> Netherlands) and maybe some parts of the route is cold and some hot. I have tried to find sea temperatures for the different seas and there isn't much data on the temperatures.

Maybe I am just overthinking it...
 
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Walter Hay

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I think you are overthinking it now. At sea, regardless of route, the temperatures don't fluctuate very much and humidity is not a problem.

Yes you should not totally seal the shipping container because any air movement in and out can help prevent the inside reaching extremely high temperatures.

Walter
 

LPPC

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I think you are overthinking it now. At sea, regardless of route, the temperatures don't fluctuate very much and humidity is not a problem.

Yes you should not totally seal the shipping container because any air movement in and out can help prevent the inside reaching extremely high temperatures.

Walter
Thank you very much Walter. All will be well then.
 

LPPC

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Hello Walter,

Here I am once again. I have some questions regarding an order on Alibaba and I would appreciate it if you could take a look.

A) I have created a PO (purchase order) in pdf form where I listed all the details and specs of the product. Can I just send it to the supplier and ask to attach it to the contract generated by Alibaba? I did see a part on the generated contract that says:
"product quality standards'' ''attachment files''

If yes, can I just write ''see PO attached'' under the ''product quality standards'' field or do I need to outline the complete specs in that field too, on top of attaching the PO? It would be really hard to fit every product detail into that field and also maybe images are not possible.

B) Does the PO file need to have signatures of both parties on it or is it enough if the supplier attaches it to the contract generated by Alibaba without signatures?

C) I will have the good inspected before shipment in China. Is it better to choose pre-shipment Trade Assurance coverage or post-shipment because then I can double check the shipment when it has arrived?

D) The supplier will send it to the port in China and I have to pay for it. She will also buy the customs document for export. My forwarder takes it from there and ships it via sea.
But on the order page now it says ''EXW'' and ''EXPRESS'' as shipping method. Shouldn't it be ''Sea'' instead of ''Express'' and also ''FOB'' instead of ''EXW''? This is important for the Trade Assurance deadline, because they take 15 days from date of shipment for express shipments and 45 days for sea shipments.

Also I think my supplier has to upload a document that will be delivered by my forwarder that states the date of shipment via sea? Again this is important for the trade assurance deadline.

I would have asked the Alibaba customer service, but they seem to be very unknowledgeable so far.

Thanks a lot in advance!
 
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Walter Hay

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IMPORTANT QUESTION FOR ALL MEMBERS

Sorry about my late reply. Recent health problems experienced by my wife have taken up a lot of time.

I see that you are using Trade Assurance.
A) If it is attached that might help if you have to make a claim. I would refer to it as Purchase Order rather than PO. The space for specifications is a problem, because there is a risk that if they are not detailed in the Product quality standards field they will not be taken into consideration. If a smaller font size will fit, try that first.
Your inspection service should also receive a copy.
B) Strictly speaking it should be signed by both parties. I would do it that way.
C) Post-delivery inspection is now the only option! Make sure you use an Alibaba designated inspection service. See the relevant Clause 6 underlined in the section dealing with Trade Assurance in my 2019 book.
D) You are absolutely correct about the Incoterms, but the relevant rule was changed in December 2018 and now reads: “The Claim Period may vary depending on the shipment method in the Purchase Contract but in no case shall it exceed 30 calendar days after the Date of Confirmed Receipt of the Products.”

This means you will now have 30 days to complete product quality inspection when you receive your goods and apply for a refund if the quality does not match the terms of the contract.

I must add that relying on Trade Assurance protection makes me nervous.

Walter
 

LPPC

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IMPORTANT QUESTION FOR ALL MEMBERS

Sorry about my late reply. Recent health problems experienced by my wife have taken up a lot of time.

I see that you are using Trade Assurance.
A) If it is attached that might help if you have to make a claim. I would refer to it as Purchase Order rather than PO. The space for specifications is a problem, because there is a risk that if they are not detailed in the Product quality standards field they will not be taken into consideration. If a smaller font size will fit, try that first.
Your inspection service should also receive a copy.
B) Strictly speaking it should be signed by both parties. I would do it that way.
C) Post-delivery inspection is now the only option! Make sure you use an Alibaba designated inspection service. See the relevant Clause 6 underlined in the section dealing with Trade Assurance in my 2019 book.
D) You are absolutely correct about the Incoterms, but the relevant rule was changed in December 2018 and now reads: “The Claim Period may vary depending on the shipment method in the Purchase Contract but in no case shall it exceed 30 calendar days after the Date of Confirmed Receipt of the Products.”

This means you will now have 30 days to complete product quality inspection when you receive your goods and apply for a refund if the quality does not match the terms of the contract.

I must add that relying on Trade Assurance protection makes me nervous.

Walter
Thank you very much Walter. We have agreed upon 30% payment upfront and the rest after inspection, so that should give some assurance.

I will do an inspection by an Alibaba qualified inspection service.
 
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Walter Hay

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That would be a good arrangement, if your inspection is carried out before shipping.

It would be even better if carried out after delivery! That should meet Trade Assurance rules, with the added benefit of risking only 30% if a claim is rejected.

Walter
 

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Hello Walter, well done on the thread.

Please i have plans on sourcing for digital photo frames but i'm more particular about the shipping safety and the best country to source between China/Veitnam.
Also as it is a breakable and easily damageable product with a lot of room for factory error - chargers, battery, colour pixels etc ; what would you advise?
 

LPPC

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That would be a good arrangement, if your inspection is carried out before shipping.

It would be even better if carried out after delivery! That should meet Trade Assurance rules, with the added benefit of risking only 30% if a claim is rejected.

Walter
If I would inspect the shipment after delivery, then I would have to make extra cost because first it has to be delivered to a place where the inspection company can inspect it (I don't have a warehouse) and then sent to the fulfillmentcenter. Thus I would have to pay for shipping of 30 big cartons. Also inspection outside of China should be more expensive.

On top of that I think there is a small chance that they would accept that proposition. Also their previous shipment was allright.

So all in all I have trust that it will go well. Maybe I will do after-delivery inspection for another shipment or new supplier. It is a good idea and I will put it in my notes.

Thank you for thinking with me Walter!

Edit: I just sent an email to msteamwebmaster@gmail.com to see how I can get the free update to the importing book. I bought it from Amazon Kindle. I would like to read the part about the changes in Trade Assurance (post-shipment inspection) of Alibaba. After that maybe my mind will be changed.
 
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A question for those who are outside the US and you buy stock from China or anywhere else for that matter, probably in US dollars, but you sell the products at home in your own currency, which in my case is UK pound sterling.

At the moment, I've simply got a multi-currency Paypal account with USD and GBP balances, so the stock is bought using the USD balance and the GBP balance is topped up when I get sales from customers in the UK.

Then when I need to re-stock, I use Paypal's currency converter to convert some of my GBP balance into USD, so I'll have enough money to buy more stock.

Something tells me this is not exactly the ideal way to do it, as I'm possibly losing out on balance conversions or Paypal charging me fees?

What's the best way of doing this when you buy stock in one currency, but sell it in a different currency at home?

Thanks
There are credit cards that wave the fees for conversion. I have not done it lately, but I remember some cards (Amex Gold maybe?) that actualyy look for the best exchange rates as well.
 
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Walter Hay

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It is worth shopping around. I have a card that allows me to make purchases in any country without fees, and with very good exchange rates.

Another card that I have I use only for local purchases, because they charge a huge fee for international purchases.

Walter
 
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Walter Hay

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Hello Walter, well done on the thread.

Please i have plans on sourcing for digital photo frames but i'm more particular about the shipping safety and the best country to source between China/Veitnam.
Also as it is a breakable and easily damageable product with a lot of room for factory error - chargers, battery, colour pixels etc ; what would you advise?
I have found quality of products from Vietnam is generally better than those from China. This is probably due to a different work ethic. Labor in Chinese factories has been conditioned to finish the job at a very fast rate in order to maintain profit levels for the factory owners.

Workers in Vietnamese factories that I have seen appear to have been under less stress. That might change but so far it looks good.

You will need to provide very detailed and precise specifications before you even get a quote. With the products being so fragile it is worthwhile to include packaging requirements.

I would also recommend having the goods inspected during production or at least before shipment.

Walter
 

LPPC

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Hello Walter,

I am trying to decide on whether it is better to do pre-shipment inspection by one of the 3 big inspection companies (necessary for Trade Assurance application on Alibaba), or the cheaper newer one in your book. The 3 big inspection companies are 50% more expensive. I have arranged 30% payment pre-shipment and the rest will be paid after inspection.

Let's say I decide to go with the cheaper inspection company and they find that it is a bad batch. I then have two options:
A) I will decide that I will not give the supplier another chance to fix the batch. In this case I don't think Alibaba will refund me the money, because I am not being cooperative by not letting them fix their mistakes. Also it will be hard at this moment to find a better manufacturer and I am running out of stock soon.
B) I will decide that they get a chance to make the batch better. Then I think after this, it is wise to do another inspection (second inspection)....right?

Now I don't see here why it would be better to use the 3 big inspection companies for the first inspection, since the first time I will most likely not apply for Trade Assurance. If after the first inspection they find that it is a bad batch, then it would be wise to have the 3 big inspection companies inspect the revised shipment (second inspection), because if even then it has not been fixed, it would be wise to apply for Trade Assurance.

Would you mind to share your viewpoint on this? Am I overlooking something? I have already bought a big batch from this supplier before and had it inspected by the cheaper inspection service, both went well.

Thank you as always Walter!
 
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Walter Hay

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@LPPC The only real problem with your idea is that you have to apply for Trade Assurance at the time of placing the order.

Knowing the history of your experiences with this product and supplier, I would be inclined to inform them prior to placing the order that you intend have a quality inspection carried out before shipment, and if the inspection service rejects them, they would have to make a new batch or fix the one that was rejected.

This should keep them on their toes and ensure that they maintain top quality control.

You could even tell them that this would involve another inspection and you would expect them to pay for that. They might agree.

Walter
 

LPPC

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@LPPC The only real problem with your idea is that you have to apply for Trade Assurance at the time of placing the order.

Knowing the history of your experiences with this product and supplier, I would be inclined to inform them prior to placing the order that you intend have a quality inspection carried out before shipment, and if the inspection service rejects them, they would have to make a new batch or fix the one that was rejected.

This should keep them on their toes and ensure that they maintain top quality control.

You could even tell them that this would involve another inspection and you would expect them to pay for that. They might agree.

Walter
Thank you for the prompt reply!

Good idea indeed to ask whether they are willing to pay for the second inspection. And yes, i have warned them about the inspection taking place.

I don't understand though. Why would I have to apply for Trade Assurance at the time of placing the order and why would this be a problem? My supplier has already created the order via Alibaba and I have paid 30% via their system. Please enlighten me.

Good that you remember the previous fiasco with that supplier :) fortunately though, this is a different supplier and their first shipment was allright.

Looking forward to your reply!
 

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Hi Walter, I was browsing Alibaba and notice that some of these manufacturer's profile pages there on the site have photos of themselves shaking hands and posing with their other clients. Is this a reliable factor in determining how reliable they are (e.g: it shows that they're a factory and not some middleman)?
 
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Walter Hay

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Thank you for the prompt reply!

Good idea indeed to ask whether they are willing to pay for the second inspection. And yes, i have warned them about the inspection taking place.

I don't understand though. Why would I have to apply for Trade Assurance at the time of placing the order and why would this be a problem? My supplier has already created the order via Alibaba and I have paid 30% via their system. Please enlighten me.

Good that you remember the previous fiasco with that supplier :) fortunately though, this is a different supplier and their first shipment was allright.

Looking forward to your reply!
You can't apply for Trade Assurance after the deposit for the order has been paid.

Walter
 

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Walter Hay

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Hi Walter, I was browsing Alibaba and notice that some of these manufacturer's profile pages there on the site have photos of themselves shaking hands and posing with their other clients. Is this a reliable factor in determining how reliable they are (e.g: it shows that they're a factory and not some middleman)?
I would not take those photos on face value. They could still be traders, visiting someone else's factory with clients.

I recall in my early days of importing being taken to more than one factory, supposedly belonging to the one company, but the Chinese names on the factory signs didn't match. Maybe one was a manufacturer, possibly even both, but they had sown the seed of doubt, so I did not deal with them.

Walter
 

LPPC

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You can't apply for Trade Assurance after the deposit for the order has been paid.

Walter
How can that be? Trade Assurance is meant for protection after having paid for the order.

Or is it different if you place a deposit first and then the full amount after inspection? I have read the Trade Assurance rules but can not remember ever having read that. Care to point me to the relevant clause?

Thank you!
 
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Trade Assurance cover kicks in after you have paid the full amount, but you must reach agreement with the supplier before ordering otherwise you could find that they won't use Trade Assurance on that particular order.

Although they advertise that they offer that service, they are not required to do so. It's their prerogative to decide with each order.

Walter
 

LPPC

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Trade Assurance cover kicks in after you have paid the full amount, but you must reach agreement with the supplier before ordering otherwise you could find that they won't use Trade Assurance on that particular order.

Although they advertise that they offer that service, they are not required to do so. It's their prerogative to decide with each order.

Walter
Thank you very much Walter.

In that case, if I'm correct it still does not matter whether 1st inspection will be done by the cheaper inspection service or by the big 3. The reason for this is that at the moment I have paid 30% upfront on Alibaba. If I can only apply for Trade Assurance after full order has been paid, then after the inspection company rejects the batch, I would first have to pay the remaining 70% in order to be able to apply for Trade Assurance. I think it would not be wise to pay the remaining 70% if the batch is not good, just to be able to apply for Trade Assurance. In that case I would rather lose 30% than take the chance of losing another 70%, because as you said Trade Assurance is not what they promise it to be.

Just a recap, my original theory was that it would not matter whether for the first inspection of the batch you would choose the cheaper inspection company or one of the 3 big inspection companies chosen by Alibaba. Reason for this is that after the cheaper inspection company rejects the batch, I will give the supplier another chance to fix the batch and then do a second inspection. Only this second inspection should be done by one of the big 3 because this inspection report would be used to apply for Trade Assurance.

Sorry if I seem stubborn or sound like a smartass. I just like to have this figured out so that I know for all future orders which inspection company to choose.

Thank you for your time and efforts!
 

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I have found quality of products from Vietnam is generally better than those from China. This is probably due to a different work ethic. Labor in Chinese factories has been conditioned to finish the job at a very fast rate in order to maintain profit levels for the factory owners.

Workers in Vietnamese factories that I have seen appear to have been under less stress. That might change but so far it looks good.

You will need to provide very detailed and precise specifications before you even get a quote. With the products being so fragile it is worthwhile to include packaging requirements.
From the few Vietnamese manufacturers I've contacted in the past, the general feeling I got was that all of them only take (very) high MOQs. At least with the Chinese manus, it's still possible for some of them to give a bit of leeway.

Also, regarding Chinese manus, when you get a product made there, do you ask them to sign a contract stating they cannot sell your product or counterfeit it? Does it actually help though, or is it just a waste of time and I should just let it be?

Thanks!
 
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In that case, if I'm correct it still does not matter whether 1st inspection will be done by the cheaper inspection service or by the big 3. The reason for this is that at the moment I have paid 30% upfront on Alibaba. If I can only apply for Trade Assurance after full order has been paid, then after the inspection company rejects the batch, I would first have to pay the remaining 70% in order to be able to apply for Trade Assurance. I think it would not be wise to pay the remaining 70% if the batch is not good, just to be able to apply for Trade Assurance. In that case I would rather lose 30% than take the chance of losing another 70%, because as you said Trade Assurance is not what they promise it to be.
I might not have made that clear. You can apply for Trade Assurance once you have agreement from the supplier that the order will be covered by Trade Assurance. Then, when you have paid your deposit, you can make a claim if inspection shows the product to be faulty and the supplier refuses to replace or refund.

Walter
 
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From the few Vietnamese manufacturers I've contacted in the past, the general feeling I got was that all of them only take (very) high MOQs. At least with the Chinese manus, it's still possible for some of them to give a bit of leeway.

Also, regarding Chinese manus, when you get a product made there, do you ask them to sign a contract stating they cannot sell your product or counterfeit it? Does it actually help though, or is it just a waste of time and I should just let it be?

Thanks!
Unfortunately, the only benefit in getting such a contract signed is that they might feel some slight pressure to abide by it.

If they think it can make them a lot of money by copying your product, chances are they will still do that.

Chinese manufacturers have signed such agreements with big brands, but there are copies everywhere. The contracted manufacturer might not be producing the fakes, but might have sold the designs or shared them with a friend in the same line of business.

Walter
 
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Tourmaline

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@Walter Hay This thread is amazing, you're really doing a lot for so many people.

I'm looking for manufacturers for my business located in Africa and South America. Searching, I have not been able to find almost any, mostly I have only come across wholesalers. Do you have any ideas of how to locate manufacturers in these regions? I know they must exist!

The only thing coming to me as searching on google and bing is not being fruitful, is to hire a local agent where the goods are being made. But I am trying to avoid going through an agent if possible.
 

LPPC

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I might not have made that clear. You can apply for Trade Assurance once you have agreement from the supplier that the order will be covered by Trade Assurance. Then, when you have paid your deposit, you can make a claim if inspection shows the product to be faulty and the supplier refuses to replace or refund.

Walter
That is indeed what I thought too. My order page with the 30% deposit also mentions that it is covered by trade assurance.

But, I still decided to go with one of the big 3 inspection companies. I thought that since inspection is so important, I might as well pay more for quality inspection. I found 1 error with the cheaper one the last time I did an inspection with them. When I got the shipment home, I found out that they answered 1 question of mine wrong. Maybe they didn't check it or did not have time to check it and just gave an answer. Might also just be human error.

Thank you so much for your support!
 

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