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Walter Hay

Walter Hay

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Thank you for your elaborate response. If I understand correctly in your opinion only pre-shipment inspection is sufficient in this case (during-production inspection is not).
Yes that is what I meant. The big benefit of pre-shipment inspections over in production inspections is that pre-shipment inspections increase the risk that a supplier will get caught out if they try to cheat the system.

Walter
 

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LPPC

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Hello Walter,

I hope you are doing well.

I have a question regarding DAP vs DDP Air Express/Courier shipments. What risk is there for the buyer if he or she chooses DAP Air Courier instead of DDP? Is it possible that extra costs will be involved for the buyer if customs clearance takes too long or something of the like? Or does the seller pay for everything up to the destination address and all the buyer has to do is pay the import VAT and import tax?

A forwarder of mine says that a risk could be that they check for CE certificates and that might prevent me from receiving the products if it does not have CE certificates (or extra costs). But isn't that also the case with DDP?

Thanks in advance.
 
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Walter Hay

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@LPPC , I would never accept DAP terms, even if the goods are shipped via Air Courier which normally includes the formalities of Custom clearance. There is too much risk and obligation imposed on the buyer.

As the buyer, under DAP terms, the risk passes from seller to you from the point of destination mentioned in the contract of delivery. That point is the place where the goods will be unloaded from the transport, whether air or sea. Unloading costs would be your responsibility.

This means you are responsible for customs clearance . This can include an import permit, (if required), preparation and lodging of documents required by customs and payment of all customs duties and taxes. It also obliges the buyer to obtain the necessary authorizations and registrations including certifications.

On the other hand, DDP imposes almost all obligations on the seller. The only thing the seller is not responsible for under DDP is the unloading of the goods at your final delivery address. They are responsible for freight to that address.

Walter
 

LPPC

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@LPPC , I would never accept DAP terms, even if the goods are shipped via Air Courier which normally includes the formalities of Custom clearance. There is too much risk and obligation imposed on the buyer.

As the buyer, under DAP terms, the risk passes from seller to you from the point of destination mentioned in the contract of delivery. That point is the place where the goods will be unloaded from the transport, whether air or sea. Unloading costs would be your responsibility.

This means you are responsible for customs clearance . This can include an import permit, (if required), preparation and lodging of documents required by customs and payment of all customs duties and taxes. It also obliges the buyer to obtain the necessary authorizations and registrations including certifications.

On the other hand, DDP imposes almost all obligations on the seller. The only thing the seller is not responsible for under DDP is the unloading of the goods at your final delivery address. They are responsible for freight to that address.

Walter
Thank you for the detailed explanation. So DAP means in the case of air shipment, that the responsibility goes to the buyer the moment they unload it from the airplane at the airport? Or does it go to the buyer when the mail man hands the package over to you? If the second, then customs clearance etc should already be done.

The reason I considered DAP is because the quote is cheaper usually and in Netherlands we can get the import VAT refunded by the government. I thought DDP would be more expensive because they have to pay VAT and import tax. But now I guess DDP is more expensive mostly it includes the extra costs you mentioned (like import permit).
 
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Walter Hay

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Thank you for the detailed explanation. So DAP means in the case of air shipment, that the responsibility goes to the buyer the moment they unload it from the airplane at the airport? Or does it go to the buyer when the mail man hands the package over to you? If the second, then customs clearance etc should already be done.

The reason I considered DAP is because the quote is cheaper usually and in Netherlands we can get the import VAT refunded by the government. I thought DDP would be more expensive because they have to pay VAT and import tax. But now I guess DDP is more expensive mostly it includes the extra costs you mentioned (like import permit).
With DAP via air courier the responsibility is all yours from the moment the aircraft lands. Those costs can make DAP much more expensive than DDP.

Walter
 

LPPC

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With DAP via air courier the responsibility is all yours from the moment the aircraft lands. Those costs can make DAP much more expensive than DDP.

Walter
That is indeed way too much risk. Thank you Walter. DDP is the way to go then.
 
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Walter Hay

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I had intended to post this in my Q&A thread, but found that it is locked, so here is an interesting question that I have received a number of times and just in the last week it has been asked three times. Someone must be heavily promoting their course.

Q. I have read on an importing blog that it is easy to pick up your own shipment from the dock provided you have a suitable truck. Do I just drive in with proof that the shipment is mine?
A. I think I know the blog you are referring to but it is an Amazon Course blog not an importing one. The writer has most likely never tried it because if he had he would say NEVER try to pick up a shipment from the dock yourself. That is the advice I would give. If you take the inexperienced guru's advice you will regret the many hours of frustration the attempt has cost you. Pay for a collection and delivery to your premises and save yourself getting an ulcer.

Walter
 

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Hey Walter,

Any input on sourcing/importing bulks of broken lawn and garden machinery equipment?

Thank you
 
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Walter Hay

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Hey Walter,

Any input on sourcing/importing bulks of broken lawn and garden machinery equipment?

Thank you
The best place for finding used, but not broken, equipment of that kind is Japan. Just as the Japanese have been accustomed to buying new cars as soon as their car is run in, they seem to have a similar attitude towards garden machinery.

I have had no reason to search for exporters of that equipment, but I would be surprised if they don't exist.

Walter
 

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The best place for finding used, but not broken, equipment of that kind is Japan. Just as the Japanese have been accustomed to buying new cars as soon as their car is run in, they seem to have a similar attitude towards garden machinery.

I have had no reason to search for exporters of that equipment, but I would be surprised if they don't exist.

Walter
Thanks Walter. I’ll start there.
 

Veloman

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I have a question about Chinese culture with regards to dealing with suppliers. I have placed my second order with a known company in China. The first order last year was delivered to me and the product was as requested. It is a known company in the industry, not a no-name with no reputation.
I have placed my second order this spring and my sales contact has not responded to me in 13 days. I paid the first 50% in March and the remaining 50% in April when requested as it seemed the order was almost ready to ship. That was 20 days ago. My sales contact says there was a quality control issue that they are fixing, and there was a 5 day holiday.
My freight forwarder told me the goods will be ready this week, but it's now almost Friday there with no update.
I ask the sales guy for a picture before sending out, multiply times now. And I've asked for an update two times in the last week with no response.

At what point do I try to contact someone else at the company? I feel like I'm getting crap service after paying out $11,000. Constantly checking my phone for a response, feeling like I might be getting scammed. Wondering if my sales contact has sold my goods to a competitor and is using this time to make more for my order.

Is this sort of lack of updates/poor service normal when dealing with Chinese suppliers?
 

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Constantly checking my phone for a response, feeling like I might be getting scammed. Wondering if my sales contact has sold my goods to a competitor and is using this time to make more for my order.

Is this sort of lack of updates/poor service normal when dealing with Chinese suppliers?
You might be getting scammed. 50% is not normal. Usually it's 30/70 terms. Also the lack of a picture at a minimum is indicative of a scam.

Either your supplier is providing extremely shitty customer service (find someone else - it's not worth the headache), or they're stealing your money. Higher chance it's shitty service and your product isn't ready yet so they're bullshitting you.

I got scammed for a lot of money a few years ago by a supplier that I did business with before. It was the third full container shipment from them. They ran into cashflow issues and stole my money.

I'd be careful if I was you. And I'd definitely start looking for a different supplier with better communication.
 
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Walter Hay

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I agree with @AgainstAllOdds. I have seen a quite a few cases of a successful first order, followed by the scammer disappearing with your money.

It's like a poker cheat letting his/her opponent win the first few hands until there's plenty of cash on the table, and then the newbie opponent's luck suddenly changes.

No importer should pay 50% deposit.

If you care to PM me with the supplier's name I will check them out for you, although it is probably too late to alter the situation.

Walter
 

Rshin

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Fantastic info in this thread.

I have a question about your product selection process.

Do you look for products and then investigate potential demand?

Or do you find a need in the market and then see if a product can be sourced?

Or is there another way?

Cheers
 

Mckenzie

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I agree with @AgainstAllOdds. I have seen a quite a few cases of a successful first order, followed by the scammer disappearing with your money.

It's like a poker cheat letting his/her opponent win the first few hands until there's plenty of cash on the table, and then the newbie opponent's luck suddenly changes.

No importer should pay 50% deposit.

If you care to PM me with the supplier's name I will check them out for you, although it is probably too late to alter the situation.

Walter
I think we'll see more of these scams from China in particular in the coming days/months & years due to the current market & tensions.
 
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Walter Hay

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These scams have been around for a very long time.

Few people seem to know that a few years back Alibaba admitted that over 3,000 Gold Suppliers had scammed buyers.

Walter
 

Veloman

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These scams have been around for a very long time.

Few people seem to know that a few years back Alibaba admitted that over 3,000 Gold Suppliers had scammed buyers.

Walter
What recourse if any does an overseas importer have if the supplier doesn't deliver? Best way to ensure it doesn't happen? Other than checking out the company first of course.
 
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Walter Hay

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What recourse if any does an overseas importer have if the supplier doesn't deliver? Best way to ensure it doesn't happen? Other than checking out the company first of course.
When placing orders overseas there is a simple safe way to buy, but it is hard to get suppliers, particularly in China to agree to it. I refer to escrow.

In effect you pay in advance but the supplier doesn't get paid until they have delivered the goods precisely as you specify in your order. Escrow.com's fees have been reduced and are in my opinion reasonable.

For larger orders using a Letter of Credit produces a similar result, but is more expensive to set up. It is done through your bank.

Lesson #1 in dealing with suppliers on Alibaba is: Never believe anything you read on that site, and be very cautious about what the suppliers tell you.

Walter
 
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Walter Hay

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What recourse if any does an overseas importer have if the supplier doesn't deliver? Best way to ensure it doesn't happen? Other than checking out the company first of course.
As you will see from my reply to your PM, I am less than impressed with the company you are dealing with. They raise a lot of red flags, mostly with inconsistencies in the various companies that are supposedly part of their organization. The links to those companies are not working.

Also by checking the Bills of Lading for their shipments to the US (3 only) I discovered that one of those shipments consisted of a product totally unrelated to what they claim to be their specialized product line. The recipient of all 3 shipments is clearly a front company. That company's delivery address, supposedly head office, is different to the head office address their website displays.

I am sorry to say that I think you have lost what you paid this time.

Walter
 
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Walter Hay

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DOES AN INSPECTION REPORT ON A CHINESE COMPANY CONFIRM STATUS AS MANUFACTURERS?
I have not been asked this question directly, but it crops up from time to time, and is particularly important to understand in the light of Alibaba's recent big changes to their supplier rating system.

The inspection companies sometimes provide a detailed report on the supplier's capacity and that states whether they are traders or manufacturers.

The problem is that those reports are no longer available for you to read :rage:. This means you have to depend on seeing the Verified Supplier badge on a Gold Member's sales listing, and trust that if their listing states "Manufacturer" then they are.

In reality, that statement might simply be due to the office inspection of their business license showing their "business scope" as manufacturing. All that means is that if they choose to manufacture their license allows it. It does not prove that they do manufacture.

With the latest changes on Alibaba, buyers have even less security than before.

Walter
SOURCE FROM OTHER COUNTRIES!
 
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LPPC

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@LPPC , I would never accept DAP terms, even if the goods are shipped via Air Courier which normally includes the formalities of Custom clearance. There is too much risk and obligation imposed on the buyer.

As the buyer, under DAP terms, the risk passes from seller to you from the point of destination mentioned in the contract of delivery. That point is the place where the goods will be unloaded from the transport, whether air or sea. Unloading costs would be your responsibility.

This means you are responsible for customs clearance . This can include an import permit, (if required), preparation and lodging of documents required by customs and payment of all customs duties and taxes. It also obliges the buyer to obtain the necessary authorizations and registrations including certifications.

On the other hand, DDP imposes almost all obligations on the seller. The only thing the seller is not responsible for under DDP is the unloading of the goods at your final delivery address. They are responsible for freight to that address.

Walter
Hello Walter. If the supplier arranges shipping via sea or railway for you, is it ok then to choose DDU/DAP or is that too much risk and DDP is the only way to go?

Thank you.
 

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Walter Hay

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Hello Walter. If the supplier arranges shipping via sea or railway for you, is it ok then to choose DDU/DAP or is that too much risk and DDP is the only way to go?

Thank you.
DAP is scarey. DDU is frequently used, but I would still avoid it. DDP is ideal and is the way air courier services always work.

Most Chinese sellers are afraid of DDP because they think it means they are responsible for paying the duty, when in reality it means that you the customer will pay the duty as a result of the DDP arrangement with your freight forwarder (or courier).

DDP should be pre-arranged with your freight forwarder on the basis that they pay on your behalf and you reimburse them before they deliver. That is the basis on which air couriers work.

As a general rule, you don't need to ask your couriers to do that, it is routine. You definitely should have it in writing as part of the quote from your freight forwarder for door to door shipment.

Walter
 

LPPC

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DAP is scarey. DDU is frequently used, but I would still avoid it. DDP is ideal and is the way air courier services always work.

Most Chinese sellers are afraid of DDP because they think it means they are responsible for paying the duty, when in reality it means that you the customer will pay the duty as a result of the DDP arrangement with your freight forwarder (or courier).

DDP should be pre-arranged with your freight forwarder on the basis that they pay on your behalf and you reimburse them before they deliver. That is the basis on which air couriers work.

As a general rule, you don't need to ask your couriers to do that, it is routine. You definitely should have it in writing as part of the quote from your freight forwarder for door to door shipment.

Walter
Thank you for the prompt response. I was actually talking about shipping via sea or rail via my forwarder, not via air. Would you say DDU or DAP is okay here as long as they state all costs are included up to my door except for VAT and customs duty?

It is all very confusing, last time I read DDU term was replaced by DAP. And also with DDP I thought all costs were included, including all the taxes so the buyer would pay nothing more than the amount paid to the seller.

Also all 3 of my forwarders refuse to ship DDP for me, only DAP. Meaning that all costs are paid by me beforehand and the only thing left for me to pay is customs duty and VAT at the border.
 
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Walter Hay

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Thank you for the prompt response. I was actually talking about shipping via sea or rail via my forwarder, not via air. Would you say DDU or DAP is okay here as long as they state all costs are included up to my door except for VAT and customs duty?

It is all very confusing, last time I read DDU term was replaced by DAP. And also with DDP I thought all costs were included, including all the taxes so the buyer would pay nothing more than the amount paid to the seller.

Also all 3 of my forwarders refuse to ship DDP for me, only DAP. Meaning that all costs are paid by me beforehand and the only thing left for me to pay is customs duty and VAT at the border.
I am in the last stages of drafting a revision of Incoterms to include in the major revision of my book, so I won't go into great detail now. I will post that revision of Incoterms here on the forum when I have completed it.

When you refer to shippers, it seems to me that you mean suppliers? In any case, it is rare and almost impossible, to get a supplier to agree to DDP, because it includes payment of charges at the destination. They cannot be certain how much those charges will amount to.

DAP does not mean that you are only responsible for duty and VAT. It also means you are responsible for unloading at the named destination. Beware that the destination names is not a port, because port charges can be costly. The P in DAP should be your delivery address. There you will need some means of unloading.

Walter
 

LPPC

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I am in the last stages of drafting a revision of Incoterms to include in the major revision of my book, so I won't go into great detail now. I will post that revision of Incoterms here on the forum when I have completed it.

When you refer to shippers, it seems to me that you mean suppliers? In any case, it is rare and almost impossible, to get a supplier to agree to DDP, because it includes payment of charges at the destination. They cannot be certain how much those charges will amount to.

DAP does not mean that you are only responsible for duty and VAT. It also means you are responsible for unloading at the named destination. Beware that the destination names is not a port, because port charges can be costly. The P in DAP should be your delivery address. There you will need some means of unloading.

Walter
Hello Walter. That sounds great, looking forward to the revision.

With the current shipment I mean suppliers yes, I might have them arrange shipment for me. Meaning that I pay the supplier the shipping cost and they arrange the shipping.

About the DAP, I see. Yes indeed so far the DAP air quotes from my freight forwarders have been delivery to my door. I have made sure of that because of your advice ;)
As long as DAP does not deliver to port but to my address, then it's fine I guess. So far it has gone well with Air Courier services.
 

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