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Payment Method Options for Importing from China

Discussion in 'China Sourcing' started by IMEX Sourcing Services, Jun 6, 2013.

  1. liyolanda


    Dec 9, 2013
    thank you very much for the post, very useful.
    i think paypal is a very safe tool to pay these orders online. but because many of shopping webs in china como taobao.com can not acept paypal, due to the selling of imitation items. so those taobao agentes like newbuybay, taobaomaster, etc, can not acept paypal, ether. so their costums usually use Credit Card and westernunion for paying.
  2. Globetraveler


    Dec 26, 2013
    Hi, im new here, this is my first post, but this is an interesting thread. I lived in various cities in china over the course of about 8 years and im now back based working in the UK. I've also worked in international trade for a while, just wanted to offer some friendly advice that might help new buyers, in my opinion all the payment options mentioned above are all fine safely assuming that you have actually traveled to china, met your suppliers, assessed the factory sizes, checked the various samples on site etc. Once you have physically met with your supplier and assessed their credibility it doesn't really matter whether you pay through, bank transfer, western union, paypal or any of the other options available, just use whatever method works out cheaper, taking into consideration bank charges and exchange rates,based on what terms you have agreed.

    Whats more important is to ensure that you physically go and check who you're dealing with if you plan to establish a serious business, this may perhaps cost you 1-2K to spend a couple of weeks out there visiting potential suppliers, but will be worthwhile in the long-run and you may also see additional products that could be good to sell once physically there.

    Also as im sure everyone probably already knows 8 years trustpass on Alibaba showing you superb pictures of some massive factory, that appears fully legit and verified by veritas, has an escrow record etc. does not mean that you are not still dealing with an agent!!!

    The "real" chinese alibaba site (domestic) and .com (international) are different sites and most of the time the guys you see on the .com sites with nice showrooms, English speaking sales staff and pleasant offices in large cities claiming to have factories are simply intermediaries that have essentially come to an agreement with a factory and are actually using the factories' pictures/product listings, despite Alibaba.com giving you the impression that you are dealing direct with the factory. Now im not saying this is the case 100% of the time, however something worth noting when your doing a search on Alibaba. Over the years i've come across several places with 5+ years trust passes and finally when you actually go to visit them it turns out they are just another trading company that will sell you the same product at an inflated price compared to the actual factory.

    Secondly having a single sourcing agent will help you in the long term, as they can accept one inital bulk payment on your behalf in USD/GBP/RMB (as most will have an account in HK), and then pay your suppliers locally in whatever currency they want on whatever terms you've agreed with the supplier, they can also assist with consolidating your goods, negotiations, shipping, quality control etc.

    However this by no means implies that you contact your agent asking for a particular product and leave it in their 'safe' hands to find it for you at the best price, you still have to put in the effort to meet/choose the companies you want to deal with yourself and then pass these details onto your designated agent to deal with your chosen suppliers once prices, quantities and terms have all been finalised. Usually this type of service shouldnt cost you more than 2-3% of your total order value. The key once again is to make sure that your working with a reliable company and not a random person in China that's posing as a sourcing agent (believe me there are 100,000s), again in order to find the best rates/agents its worth actually going out to china, look around and meet with several companies before taking any decisions.

    Hope this helps, if anyone needs any additional advice please feel free to post here and il do my best to answer.
  3. IMEX Sourcing Services

    IMEX Sourcing Services

    Sep 28, 2006

    Thanks for sharing some great advice here. I would like to further expand on some very good points that you make.

    This is an interesting point and I see this come up often in the forum. In my opinion, a trip to China is feasible only if it is justified by the "economics" of the transaction make sense. Based on a lot of the enquiries we get from TWF, majority of the buyers are "small buyers" who want to buy mixed lots and even change product lines regularly depending on "what's hot" in their market at the time. This means, that while travelling to China would be a great learning experience (which can be classified as an investment in business education) it would dent the profit severly and may even make the transaction unfeasible. This is even more applicable to online sellers who are often working on thin margins and competing against big-boys who are buying in massive quantities. Meeting your supplier is a must if you are going to be ordering repeatedly from the same supplier, and the volume justifies it. But if you are changing product lines regularly, consolidating goods from wholesalers, etc. (which a lot of importers on this forum do), then it can become economically unfeasible.

    Secondly, even if you have physically met your supplier, "payment terms" still play a critical role in terms of risk management, Your supplier might have a great factory, might take you on an expensive dinner, but "disputes" happen here all the time. They might not always be because of the bad intention of the supplier, it could simply be a result of misunderstanding in terms of quality or other expectations/requirements. When the disputes arise, carefully negotiated payment terms & payment method play a critical role, in terms of what your recovery options and risk exposure are (did you pay 40% upfront or 20%, for e.g.). Finally, there are lots of other issues that happen all too often even after a factory visit, such when sub-contracting to another factory.

    Totally agreed. However, this can now be easily verified through verifying the background and government records of the companies without physically visiting the factory. Once again, we can take it to the next level and do a factory-audit or take it another level and the client may physically visit the supplier, but it all boils down to cost vs profit equation.

    Thats a very good point and definitely alibaba.com has a lot of trading companies and its true that majority of the trading companies in China claim to be factories.

    Absolutely and once again this is one key reason why people using sourcing companies.

  4. Chris Johnson

    Chris Johnson

    Apr 25, 2013
    If buying from Alibaba you can use the payment protection service they offer. This way you can use any kind of payment.
  5. Damon Lang

    Damon Lang

    May 2, 2016
    What kind of products do you buy from Alibaba??
  6. Jeweler


    Oct 1, 2016
    Thanks for sharing.
    Cody and IMEX Sourcing Services like this.
  7. martfoxhosting


    Nov 29, 2009
    Hi, are you selling jewelry or watches? It's not as clear on your shop site. Thanks
  8. Sarah Ayushi

    Sarah Ayushi

    Dec 10, 2016
    Thanks for sharing the payment methods .
  9. IMEX Sourcing Services

    IMEX Sourcing Services

    Sep 28, 2006
    very much welcome! :)
  10. sukkilee


    Feb 7, 2017
    thanks fr Sharing. i working for a American battery company, i stay in China help doing china sourcing part work. For most our suppliers here we do T/T payment, 30% deposit at advance, and 70% payment after provide the BL copy, for some small payment for small supplier we also did pay through Paypal and Alipay, havent had any problem yet:)
    PS: for the company i would choose be our supplier i usually would do a lot reseacher and would go to visit the company if possible before i start doing business with them, to make sure those are real and fine companies and will be safe doing business with them
  11. ledwritingworld


    May 20, 2017
  12. Mark-wholesale


    Mar 28, 2018
    good share. I would prefer escrow.
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