10 {{ upvoteCount | shortNum }}
10 {{ upvoteCount | shortNum }}

HELP! About to place my first order with Alibaba - Need advice

by FreshMedia
10 replies
  • ECOMMERCE
    • |
I'm about to spend a little over $500.00 for a simple product made out of plastic. I've been communication with the sales rep in China for a few days. I've managed to get a good price for the product. The company seems legit, but I have a few concerns.

They are a gold supplier with 6 years on Alibaba. It's a manufacturer/trading company. I've checked all the details on Alibaba and the companies website, and I didn't see any indication that they are a scam.

I got a proforma invoice yesterday with the item description, unit cost, qty, amount, and packing info. I'm having it shipped via DHL, and paying with Paypal. My biggest concern is that the Paypal email address is not from the companies domain. It's from 163.com. The proforma invoice only has my first name, since I haven't given them my full name and address yet. Are these red flags? Should I walk away. Thanks.
#advice #alibaba #order #place
  • Profile picture of the author Importexport
    First let me say that there have been thousands of cases reported in which Gold Suppliers have scammed people. Gold Suppliers are no more than ordinary "verified" (Ha-ha) suppliers that have paid money to buy a badge to convince people that they are trustworthy. I have seen Gold Suppliers listed as 4 or 5 year members, but the business was first registered 1 or 2 years ago.

    Your attempt at due diligence is totally inadequate, because you will not find anything on Alibaba or the supplier's website to indicate that they are scammers.

    Are you sure they really are manufacturers, or are you just relying on what they say? A high % of suppliers on Alibaba say they are manufacturers but they are traders. If you are dealing with a trader, the good price you have been offered would still be a lot higher than you would have to pay if you dealt with the actual manufacturer.

    Very few genuine manufacturers accept payment via PayPal. Even if you pay via PayPal there are still ways you can be scammed.

    It might help you to read my thread Ask Me Anything About Product Sourcing And Importing For Profit. ― Veteran Importer Here. before you send them any money.

    Your supplier might be perfectly legitimate, but I think you are taking a big risk. Have you had a sample from them? Did they deliver promptly and was it good quality?

    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
    {{ DiscussionBoard.errors[10489747].message }}
    • Profile picture of the author FreshMedia
      Thanks Importexport for your advice. I didn't ask for a sample since it's a simple plastic product and it's not that expensive. I've asked the sales rep to also send me an invoice through Paypal.Since it's being shipped via DHL, are there any custom issues I may have?

      By the way, I purchased your book about a year a go. It's very informative, but I didn't find what I was looking for on the website you recommend. Thanks.
      {{ DiscussionBoard.errors[10490359].message }}
      • Profile picture of the author Importexport
        Originally Posted by FreshMedia View Post

        Thanks Importexport for your advice. I didn't ask for a sample since it's a simple plastic product and it's not that expensive. I've asked the sales rep to also send me an invoice through Paypal.Since it's being shipped via DHL, are there any custom issues I may have?

        By the way, I purchased your book about a year a go. It's very informative, but I didn't find what I was looking for on the website you recommend. Thanks.
        I would still be wary of acting until you have done more checking on the supplier. Because you have my book, I will be happy to check them out for you. Just PM me with the company name and I can let you know what I find.

        DHL will clear the shipment through customs automatically, and if (unlikely) there is any duty payable they will bill you for the duty. If using your own DHL account you should get a quote from them before it is shipped. If the supplier is pre-paying the DHL charge, chances are that will cost you less than using your own account, but their quote and DHL's quote will confirm one way or the other.

        Sorry you couldn't find what you were looking for on my #1 preferred site, but the #2 site has a huge range of products and suppliers. If you like to tell me what the product is I can do a quick search for you seeing that you have book user privileges.

        I expect the much expanded 2016 edition will be released this month and as a book buyer you will be notified when it is available for free download.

        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
        {{ DiscussionBoard.errors[10490906].message }}
  • Profile picture of the author Sheldon Slononazinski
    Hi Fresh, How's it goin?

    I pay like this all the time for small amounts like that and never have a problem but since you are new I understand the nervousness. You could ask to do it through Alibaba's system with their protection.
    Alibaba has a ton of help and videos about it. Look in your message center there.

    A lot of suppliers take the conversation out of Alibaba and start contacting you directly if you provided an email. It is normal.

    A couple of other things that struck me about your post besides noticing you were probably working outside of Alibaba's system.
    1. Is $500 the full price or is it a deposit? If it is the full price then this is a pretty standard procedure otherwise if it is like a 30% deposit then you should explore moving the transaction into Alibaba's protective system.

    2.You haven't given them an address yet? Are you sending it direct to a fulfillment or prep center?
    If I did not get a sample and it was my first order with a new supplier I would definitely want it to come to me first.

    Also, get Skype and add your contact at the supplier. They will message you if there is any problem or question and after chatting with them you'll feel a little more at ease having the ability to reach them so quickly and directly.
    {{ DiscussionBoard.errors[10491063].message }}
    • Profile picture of the author Importexport
      Originally Posted by Sheldon Slononazinski View Post

      Hi Fresh, How's it goin?

      I pay like this all the time for small amounts like that and never have a problem but since you are new I understand the nervousness. You could ask to do it through Alibaba's system with their protection.
      Alibaba has a ton of help and videos about it. Look in your message center there.

      A lot of suppliers take the conversation out of Alibaba and start contacting you directly if you provided an email. It is normal.

      A couple of other things that struck me about your post besides noticing you were probably working outside of Alibaba's system.
      1. Is $500 the full price or is it a deposit? If it is the full price then this is a pretty standard procedure otherwise if it is like a 30% deposit then you should explore moving the transaction into Alibaba's protective system.
      Alibaba's system gives very little protection. Thousands of buyers have been scammed by sellers on Alibaba. Use a safe sourcing site if you want real protection.

      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
      {{ DiscussionBoard.errors[10492216].message }}
      • Profile picture of the author Sheldon Slononazinski
        Please, enlighten us with just one example of someone being scammed while using the Trade Assurance escrow service that is free and baked into the Alibaba system.

        Here are the current numbers posted for its use. I just went and got these.
        Total order value: US$ 374,482,287 Largest single order: US$ 56,127,966 Number of buyers: 189241

        I'm serious. The system is set up in such a way that I really want to know an example of how it is circumvented in order to scam someone.

        and not just 'they got scammed!'. How did they get scammed in that system? How did it offer "very little protection"?
        {{ DiscussionBoard.errors[10492367].message }}
        • Profile picture of the author Importexport
          Hi Sheldon,

          You didn't mention the Trade Assurance system. You simply referred to Alibaba's system. Now you refer to the Trade Assurance system and call it an escrow service. It might imitate some of the aspects of escrow, but it is not escrow.

          Alibaba's old system they called Escrow is now called Secure Payment. The name has been changed for legal reasons since the float on the NYSE. There are strict financial rules governing the provision of escrow services.

          For small orders Trade Assurance is not available. The OP's deposit of $500 is only half the lower limit. That program looks good superficially, but the rules are a nightmare. Unless you read all the rules, you are likely to be very disappointed.

          Buyers need to know for example that they will have to pay for expensive Quality Inspection services before the goods leave the factory if they are to have any hope of making a successful claim under this system. This is because claims that the product is faulty must be made before the goods are delivered!

          A problem with that is, Alibaba's rules don't specify what "delivered" means. Under some Incoterms (Universal Shipping Terms), delivery is deemed to have been made when the goods leave the supplier's premises.

          I posted an extensive review of Alibaba's Trade Assurance system in my thread: Ask Me Anything About Product Sourcing And Importing For Profit. ― Veteran Importer Here. You might like to see it.

          I repeat, thousands of buyers have been scammed by suppliers on Alibaba, even Gold Suppliers, but I was not referring to Trade Assurance users.

          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
          {{ DiscussionBoard.errors[10492551].message }}
  • Profile picture of the author linda dropshipping
    hi
    payment method by paypal,its more safe then paying by bank transfter.and paypal protect buyer more then seller.once u find any unnormal on items (including shipping date ,items problems)u can make a complaint.
    hope it can help u.
    linda
    Signature

    to be a better girl.

    {{ DiscussionBoard.errors[10492555].message }}
    • Profile picture of the author Sheldon Slononazinski
      You know what Walter, you're right.

      I want everyone to buy your book and be terrified of sourcing from Alibaba.

      I'm crushing it right now because I hardly have any competition. I want to thank you for the help
      {{ DiscussionBoard.errors[10492596].message }}
      • Profile picture of the author Importexport
        Originally Posted by Sheldon Slononazinski View Post

        You know what Walter, you're right.

        I want everyone to buy your book and be terrified of sourcing from Alibaba.

        I'm crushing it right now because I hardly have any competition. I want to thank you for the help
        No sarcasm here from me. I prefer facts.

        The facts are:
        • In late 2011 Alibaba admitted that 2236 Gold Suppliers had scammed buyers.
        • Jack Ma promised then to clean up Alibaba's act.
        • Last year the Chinese government's equivalent of the FTC, the SAIC accused Alibaba of allowing merchants to operate without required business licenses, to run stores selling famous brands without authorization, and selling fake products. The Chinese State Administration for Industry & Commerce (SAIC) is a government watchdog for consumer protection, trademark protection and business practices.
        The report also said that Alibaba employees took bribes, and the e-commerce giant had not fixed flaws in customer feedback or internal credit-scoring systems. The government watchdog said "For a long time, Alibaba hasn't paid enough attention to the illegal operations on its platforms, and hasn't effectively addressed the issues." The report went on to say "Alibaba not only faces the biggest credibility crisis since its establishment, it also casts a bad influence for other Internet operators trying to operate legally."

        SAIC said Alibaba was still allowing sales of contraband including fake cigarettes and alcohol, as well as items "that threaten public safety" such as knives and phone-tapping devices.

        The watchdog says: "A huge number of merchants" haven't registered for operating licenses and are engaging in illegal behavior including bribing Alibaba employees.

        The report also accuses Alibaba of allowing merchants to mislead customers during sales promotions on Nov. 11 and Dec. 12.

        "Some operators on the platform have created fake transactions and deleted negative comments to improve their own and others' reputations," SAIC said.

        What Does This All Mean For Buyers?
        • It means that little confidence can be placed in Alibaba's verification system or Gold Supplier rating.
        • It also means that although 90 million fake product listings were deleted prior to Alibaba's float on the NYSE, the fakes are back.
        • It means that feedback scores can't be trusted.
        • It means that sellers listed on Alibaba continue to mislead buyers.
        • It means that Alibaba can't or won't deal with illegal activities on its sourcing platform.
        • It means that bribing of Alibaba employees is still taking place even after it was supposed to have been cleaned up after the "Alibaba and the 2236 thieves" scandal.
        Now maybe some who have been skeptical about my previous posts on the thread Safe to buy from alibaba? will appreciate why I teach that it is better to use safe sourcing sites where you don't have to keep looking over your shoulder.

        Good luck to you and others who prefer to gamble by buying from Alibaba vendors despite the facts.

        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
        {{ DiscussionBoard.errors[10492611].message }}

Trending Topics