By You have done your product research and found a supplier of your product and now you are ready to pay your supplier on Alibaba. Wait read this first. Here are 5 things to do before you pay your supplier on Alibaba. I assume that you have ordered sample unit. If not order a sample no matter if you are a beginner or an expert.
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Check for Trade Assurance
You may find many suppliers on Alibaba who are gold suppliers and ranked on top of page 1 of search results. But some of them do not support trade assurance.
Trade Assurance is a free service by Alibaba.com designed to create trust in trade. Alibaba provides a set of protections to give you assurance that suppliers will honor key terms of your contract. You can read more about trade assurance here.
Sometimes suppliers may ask you to pay via western union, bank wire transfer, or any other method of payment. If you are dealing with your supplier the first time then you are better off paying by Alibaba trade assurance.
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Check Hazmat and Patents Products
As you guys know that Amazon does not store Hazmat products in their warehouses and Hazmat items are not eligible for FBA. Sometimes Amazon’s system thinks that item is hazmat but it is not in reality. I highly recommend all sellers to create a product listing and make a shipping plan first before you pay to your supplier on Alibaba.
Examples of Hazmat items are lithium batteries, fluids, chemicals, gasoline, antifreeze, fire extinguishers, etc.
Also you should double-check if there is patent or trademark on that product. I know many sellers find out about patents after they have made a payment on Alibaba. You can hire someone from Fiverr, Upwork to do a patent search for you or you can do it yourself by checking on Google Patents or the USA official patents website. Remember checking patent yourself is sometimes tricky so do your due diligence before paying Alibaba.
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Check Shipping Details
Another thing you should keep in mind is shipping terms attached to your order. Commonly used shipping terms are EXW, FOB and DDP. Identify which term you are paying for and understand the difference between all these terms. Here is brief information on these terms.
EXW– Supplier is not obligated for shipping. You are responsible for shipping from factory to FBA or your warehouse.
FOB – You and Supplier both are obligated for 50% of shipping. i.e shipment till port is supplier’s responsibility and from port to FBA or your warehouse is yours.
DDP – This means door-to-door shipping. Duties and taxes are covered in this term. You don’t have to worry about anything. But this term is expensive and secure than others
You can watch this complete video and this will help you understand these terms much better.
Not only shipping term, Also verify shipping weight, dimensions of cartons, and no. of cartons included in the shipment.
In case packed boxes, product quantity should not increase 150 units and Amazon will not create shipment plan.
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Read your Purchase Agreement thoroughly
This is quite obvious but trust me many FBA sellers do not read their contract or Performa before paying. Always check quantity, size, variations mentioned in contract. Verify how much time does supplier needs to make your order. These are quite basic things and cannot be ignored. There is nothing worse than realizing that you should have read it before. Alibaba trade assurance works only if you have enough proof to prove if there is something wrong.
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Understanding Customs
There are some products which are prohibited to import from other countries. Make sure your product is not one of them. Check your country’s border regulations.
If you chose to go with DDP term shipping and duties and taxes are included in the shipping price.
In EXW and FOB consult with any custom broker or call you customs department for more information.
Taxes depend on category of goods you are importing, total declared value of your goods.
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