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

JustWalkinAround

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Hi Walter, I am in talks with a Chinese supplier to import $6000 of goods, including freight costs.

They told me it’s a ‘door to door service via sea freight but not DDP because they don’t know Australia’s duties’. He said it’s DDU.

He explained to me the process:

1. I pay for the order
2. They’ll produce and send to Australia
3. They pay duty and taxes and clear customs
4. They invoice me for the duties and taxes
5. I pay that
6. They deliver to my door after I pay

Does this sound right?

Thanks in advance!
Edit: I called a few government bodies, custom brokers and clarified with my supplier today and found out the following:

- Supplier will deliver door to door via sea freight
- Upon arrival, their agent will pay duties/tax and clear customs on my behalf
- They will contact me to authorise them to clear customs on my behalf
- They will then invoice me the duties/tax
- Once I reimburse them, they will deliver to my door

Hope that helps for anyone wondering the same thing. Cheers.
 
Last edited:

Walter Hay

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Edit: I called a few government bodies, custom brokers and clarified with my supplier today and found out the following:

- Supplier will deliver door to door via sea freight
- Upon arrival, their agent will pay duties/tax and clear customs on my behalf
- They will contact me to authorise them to clear customs on my behalf
- They will then invoice me the duties/tax
- Once I reimburse them, they will deliver to my door

Hope that helps for anyone wondering the same thing. Cheers.
Your original post with your question has vanished from the thread, but I found it among the notifications in my email inbox!

What you have been told is exactly how it should work.

Walter
 

MattR82

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Hi all, just curious if anyone has experience with importing machinery? I have a family member that is looking to upgrade a "clicker press" die cutter to a rotary die cutter with an automatic feed.

He is looking at importing one to Australia from China in the 5k to 15k range. Anyway, I think he has a lot more work to do in researching exactly what type he needs as there is so many models, but I was curious as to whether there may be a better place to look than China for importing these industrial kind of machines.
 

Walter Hay

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There should not at this stage be any problems in importing such a product.

It would probably have to be packed in a wooden crate, and the crate has to pass inspections by AQIS. Time and cost can be saved by having an appropriate certificate prepared to accompany the shipment.

Fumigation may or may not be necessary, so you should consult a Customs agent in Australia about that.

Walter
 

MattR82

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There should not at this stage be any problems in importing such a product.

It would probably have to be packed in a wooden crate, and the crate has to pass inspections by AQIS. Time and cost can be saved by having an appropriate certificate prepared to accompany the shipment.

Fumigation may or may not be necessary, so you should consult a Customs agent in Australia about that.

Walter
ok great, yeah he has a broker etc that will do that for him. I just wasn't sure if industrial equipment like that was best sourced from China, but it does seem like it.
 

Walter Hay

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It could be worth searching in Vietnam where Chinese manufacturers have been steadily transferring their production lines over the past 5 or 6 years.

Walter
 

Blackman

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Dec 28, 2018
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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
 

Walter Hay

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Because you receive your proceeds of sales in GBP, you are going to suffer currency conversion rates no matter what you do.

If you use your PayPal balance to pay for purchases, you can do that without previously converting your GBP to USD. THis will at least simplify the process for you.

You could ignore the fact that your balance is in GBP and enter the USD amount in the payment field.

PayPal will do the conversion to USD at their current daily rate and will send to your supplier for their usual fee.

Have you considered selling on Amazon USA? If so I can give you a link that well help you learn to do it. That will give you USD income.

Walter
 

Blackman

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Dec 28, 2018
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Thanks Walter, I guess there's not much that can be done regarding the currency differences.

As for selling on Amazon US, I wouldn't be interested in that the moment. My focus currently is on eBay UK and then possibly my own e-commerce store, so don't have Amazon in my plans for the foreseeable future.
 

avandelay

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May 22, 2019
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I placed an order on Alibaba ($1000 item, $650 shipping) via their trade contract system, and specified DDP which the seller approved and I then sent payment via CC. I specified DDP because the seller mentioned using FedEx in their email.

A week later I asked for tracking and they sent an Air China waybill, said they overlooked the DDP part and already shipped it and I had to pick it up myself and handle customs.

Long story short it cost several hundred dollars in broker fees and travel, plus took 8 hours start to finish to pickup the item.

How good is Alibaba at mediating disputes, or should I go straight to my card issuer?
 

LPPC

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A box sealed in the way you illustrate should keep out the humidity.

If the glass transition level is in fact 45 degrees Celsius it would need insulation or refrigeration if there was a risk of reaching that temperature. If, as I believe to be the case, glass transition level is 60 degrees Celsius there should be no cause for concern unless the package was in something such as a closed vehicle in which temperatures can reach 50 to 60 degrees.

Walter
Hello Walter,

I have asked you this question a while ago, whether there would be a good chance that a product made of PLA would be deformed because of the heat during a train or sea shipment (glass transition level of 60 degrees celsius). You said that there would be no cause for concern unless the package was in something such as a closed vehicle.

Do you consider normal LCL containers for sea shipment to be a ''closed vehicle'' as you worded it?
I have called my sea forwarder and they said that I could not choose a different container for normal LCL shipments. The container is not fully sealed he said, so some air slips through, but there is no LCL container which has some sort of holes or gapes specifically made for ventilation.

The shipment will be shipped via sea beginning of June 2019 from China to The Netherlands. I have done some research and it appears that sea temperatures almost never go above 35 degrees Celsius if I'm not mistaken.

Thank you!
 

Walter Hay

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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
 

Blackman

New Contributor
Dec 28, 2018
14
7
14
London, UK
I placed an order on Alibaba ($1000 item, $650 shipping) via their trade contract system, and specified DDP which the seller approved and I then sent payment via CC. I specified DDP because the seller mentioned using FedEx in their email.

A week later I asked for tracking and they sent an Air China waybill, said they overlooked the DDP part and already shipped it and I had to pick it up myself and handle customs.

Long story short it cost several hundred dollars in broker fees and travel, plus took 8 hours start to finish to pickup the item.

How good is Alibaba at mediating disputes, or should I go straight to my card issuer?
Good thing that you placed the order through Alibaba, rather than directly with the supplier. That's not to say that Alibaba are amazing at solving disputes, but at least you've got all the records on Alibaba to prove your point.

Needless to say, before placing any large orders in the future, you should always place a few small orders with your manufacturer/supplier first to "feel them out", and then when you have confidence in dealing with them, you can place orders for 4 figures and above...

Have you tried resolving this directly with the supplier? It obviously cost them less to send the shipment to you via Air China, than it would have with Fedex.

If it's a genuine company, then I see no problem in them partially refunding the shipment cost, which would hopefully cover your expenses?

Also I wouldn't trust a supplier with paying my duties/tax, because these are applied by the receiving country, so I struggle to see how the supplier would know the amounts due to be paid and charge you in advance for it...

You should always get quotes as DDU (delivery duty unpaid).

If I've missed something, I'm sure Walter will correct me.
 

avandelay

New Contributor
May 22, 2019
2
1
1
Good thing that you placed the order through Alibaba, rather than directly with the supplier. That's not to say that Alibaba are amazing at solving disputes, but at least you've got all the records on Alibaba to prove your point.

Needless to say, before placing any large orders in the future, you should always place a few small orders with your manufacturer/supplier first to "feel them out", and then when you have confidence in dealing with them, you can place orders for 4 figures and above...

Have you tried resolving this directly with the supplier? It obviously cost them less to send the shipment to you via Air China, than it would have with Fedex.

If it's a genuine company, then I see no problem in them partially refunding the shipment cost, which would hopefully cover your expenses?

Also I wouldn't trust a supplier with paying my duties/tax, because these are applied by the receiving country, so I struggle to see how the supplier would know the amounts due to be paid and charge you in advance for it...

You should always get quotes as DDU (delivery duty unpaid).

If I've missed something, I'm sure Walter will correct me.
Thanks. Turns out their proforma invoice specifically said FedEx as the shipper. 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?

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.

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. 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.

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.
 

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 freight scams has saved many people thousands of dollars. You might find the cost a good investment before placing your next order.At least read through this thread.

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 of 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
 

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 you 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
 

LPPC

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Mar 6, 2016
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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.
 

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...
 

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!
 

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.
 

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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