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Situation with supplier - what would you do?

Discussion in 'Product Creation, Inventing, Importing, Sourcing' started by LPPC, Jan 4, 2019.

  1. LPPC
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    LPPC Bronze Contributor

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    Hi all,

    I will try to keep it short. What would you think is the right choice in this situation? I know in the end it is my decision, but some viewpoints would be useful.

    I had ordered inventory with this supplier from China and they sent the goods via DHL Express through a forwarder that they use. With this first order I forgot to mention that the shipping address should be different from the invoice address, so that was my bad. DHL told me I did not have the authority to change the address, but the shipper (the forwarder of my supplier) could easily change the address by just making a call. In the end the forwarder said they changed the address, but this was not true.

    Now for the second order of another product, I explicitly told the supplier that the shipping/delivery address would be a different address than the invoice address, but apparantly the forwarder did not listen and sent it to the invoice address. Again the forwarder basically refuses to change the address.

    Now because of this the shipment will arrive 3 days later for us to inspect. If the quality of the product is good, then we would be able to order a big amount and ship via train. But now the inspection is 3 days later than it would have been had the forwarder changed the address by simply picking up the phone and calling DHL. This means that the shipment via train has been delayed by 7 days and we would have to send the inventory for these 7 days via air instead of train in order to not run out of inventory. This will cost more (air is more expensive than train), so because of the delay we will lose money.

    Now the supplier says that they are willing to refund me this loss, is it a wise choice to accept this refund? Or will it damage my reputation with them or affect our relationship in a bad way? This supplier provides me with 2 different products that are good and maybe more in the future. I would like to have a long term relationship with them. But the thing is, it was sooooo easy for the forwarder to just pick up the phone and save me all the hassle and delay. DHL confirmed it multiple times that they could easily change the address.

    Looking forward to your opinion! Thank you!
     
  2. Thoelt53
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    Thoelt53 Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I’m not familiar with Chinese business culture so I can’t say whether or not you should accept the reimbursement.

    I only have limited experience importing from Canada. In that case I would express gratitude for the offer and decline. Then find my own freight forwarder.

    However, it may be a massive insult in Chinese culture to refuse the reimbursement. Hopefully someone more experienced in that area will chime in, there’s an abundance on this forum.

    Regardless I would consider finding your own freight forwarder going forward.
     
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  3. AgainstAllOdds
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    AgainstAllOdds Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    China changed its laws a few months ago.

    The invoice name has to match the importer name. The same might be true for the address. This is a measure to prevent money laundering.

    If the address is affected, it means that the supplier is sending you the goods and then fixing it later because that's the easiest way for them to get the sale and deliver the goods.

    If that's not the case, it's best for you to just speak to the supplier, or to handle DHL logistics yourself. Get your own freight forwarder to pick up the shipment and have it sent via DHL to you.

    I'd take the refund. If the supplier offered the money, they want to continue the relationship. There's not any risks that I can see.
     
  4. Walter Hay
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    Walter Hay Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I agree with @AtAllOdds, that supplier is showing that they want the relationship to continue.

    I would express thanks and tell them that their generous offer confirms that you have made the right decision in choosing them, and you expect that your relationship with them will continue to grow, and you hope it will last for many years.

    Walter
     
  5. LPPC
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    LPPC Bronze Contributor

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    Thank you guys! I have accepted the refund and thanked them in the way @Walter Hay described.

    @AgainstAllOdds The problem was that the forwarder was not even willing to change the address later on. You mean that they will send the goods and fix it later, but fix it before the shipment gets delivered so that in the end there is no consequence for me?

    In this case it caused 3 days delay of delivery.

    And indeed, I will look for my own forwarder from now on.
     
  6. AgainstAllOdds
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    AgainstAllOdds Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I'm not sure if they're allowed to change it.

    If it's a small cost for you, I'd register a company that matches the name and transfer funds from that one. Just make sure to figure out the accounting.
     
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  7. LPPC
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    LPPC Bronze Contributor

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    I asked DHL express numerous times and all the employees on the phone said that it was very easy for the sender of the package to change the address. All they had to do was pick up the phone and call DHL.

    It is very strange that they did not want to do this. Also the supplier told me that they just wouldn't listen, but the supplier was also a big vague about it.

    Thank you for the tip about registering a different company for this purpose. I will consider it.
     
  8. Walter Hay
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    Walter Hay Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Courier companies have grown so big that they act like big government bureaucracies.

    Better to find a way around the problem than to beat your head against a wall trying to get sense and cooperation from them.

    Walter
     
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  9. LPPC
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    LPPC Bronze Contributor

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    Thinking about @AgainstAllOdds 's solution I realised that his solution would not be feasible in this situation, since often I ship the goods directly to a warehouse of another company. Ofcourse I can't register a company using the address of the warehouse.

    So the only solution left would be to find my own reliable forwarder?
     
  10. AgainstAllOdds
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    AgainstAllOdds Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    How much volume are you doing? My forwarder could help out if it's a large volume. If it's a smaller volume, I'm not sure if she'll be interested. Send me a message.

    Other options:
    • Get your own DHL account. Give the account # to the supplier and ship under that name. You won't get as significant discounts since you don't do large volume with DHL. You can pay yourself after the shipment.
    • Register your own company in China. Ship under that name.
    • Hide your import data if possible in your country and the shipper country.
     
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  11. G-Man
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    G-Man Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Get your own DHL and start looking for a forwarder. If your business is dependent on these goods there’s really no reason not to.

    Look at like this: there are so many things you can’t control in logistics that you might as well take control of the things you can.
     
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  12. LPPC
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    LPPC Bronze Contributor

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    I sent you a message.

    Getting my own DHL account might be a viable option, I am certainly going to look into it.

    Thanks for thinking with me! +rep

    @G-Man You are right about that man, thanks! It has been a month full of learning experiences.
     
  13. Walter Hay
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    Walter Hay Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    If you open a DHL account, remember to bargain hard. Massive discounts are available if you know to ask for them.

    Huge volume helps, but is not the only answer to getting a big discount. I am talking about >60% off schedule rates, but some reps will give you more than that.

    I would also consider UPS, who seem to be a little easier to deal with. I wouldn't bother with FedEx because they are the worst bureaucracy in the courier market.

    Walter
     
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  14. LPPC
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    LPPC Bronze Contributor

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    Thank you Walter for the priceless information again! This is very good to know.

    Do you maybe have specific tips on how to bargain in this case and things I should know? Really curious to how this will pan out.
     
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  15. Walter Hay
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    Walter Hay Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Face to face with a rep will work much better than trying to negotiate over the phone.

    A slight embellishment of your business stats and growth would not go astray, but be moderate.

    You must look and sound professional. It would be worth having a look through @Kak's thread
    Dressing For Success... Stop looking like a fool. There's more there than just clothing.

    If you give the impression that you are successful you will usually get better treatment.

    Finally I would add, don't accept their first discount offer, and when you shake hands, make sure you quickly get the quoted rate in writing. Don't forget to make sure they know it is for inwards freight delivered to your door.

    Walter
    P.S. One of my favorite negotiating tools has always been to walk away. Sometimes they don't care, but more often than not they will ask you to name the price (or discount.)
     
    YoungPadawan, LPPC and Kak like this.
  16. LPPC
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    LPPC Bronze Contributor

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    The option to meet face to face didn't even come up in my mind as an option if you hadn't said it. But indeed, that would be way better and more professional. So it would be a good option to learn the basics of negotiating face to face.

    You were talking about discounts of >60% for off schedule rates. What does off schedule rate mean precisely? Is it an arrangement where you agree to them to send you shipment as a replacement for a cancelled shipment of another customer for example, and thus often receiving your shipment later than usual but for a cheaper price? If yes, how many days will the shipment be delayed aproximately for an off schedule rate? And would I have to ask for off schedule rates separately during the negotiation?

    Thank you very much! +repped
     
  17. Walter Hay
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    Walter Hay Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    "Schedule rate" is freight industry jargon for a published price list. Only newbies or people who have failed to get a firm quote in advance will pay that rate. That often happens when new importers accept a shipment on the basis of freight payable on delivery at destination port, but without getting a firm quote.

    It is seen in the industry as a starting point for negotiation. Some other industries also use such extremely high published price lists to give the impression that with ridiculously high discounts they are getting a great bargain.

    I have seen price lists in another industry offering a 75% discount. It is obvious that those published prices are fake.

    Walter
     
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  18. LPPC
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    LPPC Bronze Contributor

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    Understood. I am learning so much more about importing, mainly because of you and by putting it in practice! Being able to import opens up a lot of doors. Thank you!
     
    Walter Hay likes this.

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