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How do I actually go about making my payment for Alibaba item? (escrow)

by electric123
3 replies
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Okay, a bit of a newb question, but I'm wrapping up my first order and want to maintain my professional look with the supplier.
I've done all the back and forth with them, gotten samples, tweaked the item, discussed packaging, labeling etc, and finally they've emailed me the invoice. So now what?
We agreed early on that this would be paid by escrow, but how does that actually work? Do I email back and "accept" the invoice and wait for something on Alibaba, or do I have to do something on Alibaba? Like update my inquiry. Is escrow provided through Alibaba or do I need to set up an account somewhere else?
#alibaba #escrow #item #making #payment
  • Profile picture of the author Importexport
    Alibaba's old escrow system is now called Secure Payment. The name has been changed for legal reasons since the float on the NYSE. It should not be confused with their new Trade Assurance system. I have posted an explanation of their Trade Assurance in my thread: Ask Me Anything About Product Sourcing And Importing For Profit. ― Veteran Importer Here. It is complicated, but it needs to be because the rules are confusing to say the least.

    Alibaba's Secure Payment scheme is full of loopholes. Few people bother reading the fine print, but I am one of the few that do. I can tell you that the fine print contains contradictions and is missing information that is very important to buyers.

    The biggest problem is the time limit. If you are lucky enough to find a real manufacturer on Alibaba (most are traders even if they claim to be manufacturers) you might think you are protected, but remember to read Alibaba's fine print regarding their Secure Payment service. It has a short time limit for you to lodge a dispute and many suppliers are expert at procrastinating until that time limit runs out.

    There are other problems, such as the risk of refusal of your claim if you sign for a parcel and it contains wood shavings, newspaper, or maybe an empty plastic casing instead of the phone you ordered.

    Don't forget the huge cost of returning any faulty product. Suppliers on Alibaba will invariably require that before they will issue a refund. That is one of the many ways they manage to avoid refunding money.

    Walter Hay
    "If you think education is expensive - consider the cost of ignorance."
    Signature
    Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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  • Profile picture of the author electric123
    Does anyone have an actual answer? I thought escrow payment was a common payment method.
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    • Profile picture of the author Importexport
      It will be a long time before the incorrect term "escrow" fades from use in relation to Alibaba's system. They incorrectly called it escrow and had to change it before they could list on the NYSE.

      Currently the only place where you can use Alibaba's new Secure Payment system is on AlibabaWholesale. This is a retail section of the Alibaba website. You will pay more for the products there and it is not suitable for resellers wanting to buy for resale. The margins will be small. All transactions on the wholesale section are automatically covered by the Secure Payment system. You need to read the fine print in the rules. The security it offers is not as secure as you might think.

      If the amount is over $2,000 it would be worth using the services of a real escrow business such as escrow.com. Alibaba suppliers hesitate to use it because it gives total protection to buyers. Some will agree to use it if you offer to pay the fees.

      If you need more information about using escrow.com I will be happy to help.

      Walter Hay
      "If you think education is expensive - consider the cost of ignorance."
      Signature
      Use emotions and perceptions to build a great brand. Ask me about my book LabelsThatExploit. For safe sourcing and easy importing from 41 countries globally, see https://provenglobalsourcing.com
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