Four Things to Check Before Paying Your Supplier
The four items listed here are common things importers overlook when placing an order with their supplier. Chinese suppliers are infamous for only performing explicit requests from buyers. (What?! You wanted instructions included with that 248-piece Murphy bed?!)
So make sure you ask yourself and your supplier the questions on this page before finalizing your order.
Question #1: What Are the Shipment Terms?
It's easy to get burned with extra fees by having unfavorable shipment terms. Suppliers will often (although not always) agree to different shipment terms if you simply ask.
- EXW [Supplier's Factory] : The most expensive for you. You pay all of the freight costs from their factory (including China ground freight) all the way to your doorstep.
- FOB [Port Close to Supplier's Factory] : The most common shipment term. You pay for the freight from the Chinese port to your doorstep.
- CFR [Your Port]: Your supplier pays for all the freight to a port near to you. Does not include insurance nor the ground freight from your port to your doorstep.
- CIF [Your Port]: Same as above but includes insurance. The most favorable for you.
And a bonus:
- How will you get your products from your freight forwarder's warehouse to your doorstep? Will you pick it up yourself? Hopefully, you have a truck if the items are big. If not, ask your freight forwarder for a quote for grand transportation from their warehouse to your doorstep.
Question #2: How Are the Products Packaged?
- Are they packaged in a plain brown box? If so, it will be hard to sell anywhere besides online.
- Do they include a box at all? Or are they simply thrown in a box together. This is very difficult to sell anywhere besides online, and you'll have to buy boxes.
- Are the boxes marked “Made in China”? They should be or your shipment can be rejected by customs authorities in your home country.
- Are there any warning labels needed on the items such as flammable warnings? If so, make sure your supplier includes them.
- If the product is complex and requires instructions, are instructions in English included?
Question #3: When Will the Order Be Complete?
- When will your order be complete? 30 Days? 60 Days? Whenever they get around to it?
- If the order is late, what are the penalties? 1% per week is common. You might not be able to enforce the penalty (or want to enforce it), but it keeps your order in some priority queue.
Question #4: Will They Be Including Marketing and Photos?
- Does your supplier have any photos (not simply taken from another website) they can provide you?
- If your supplier doesn't have photos, can they take photos? If not, remember this will delay you being able to sell your products immediately after receiving them (*Hint* Search for your Supplier's SKU on Google. Possibly one of their customers in a foreign, non-competing country, has great photos and is willing to let you use them)
- Do they have any brochures or other marketing materials? These can be great to use when selling your product.
Don't forget to ask these four questions to your supplier before paying.
Are there any things that you always check with a supplier before importing? Have you been burned by any gotchya's? If so, share them below!
There are actually two risk area for payment: one for deposit when supplier ask for 30-50/% before starting producing and the balance 50-70% remaining before shipping the goods. Those two area of risk are related to two points: 1./ Does supplier is reliable enough to produce goods 2./ Does the goods are indeed produced according tot the specifications. Those two area of risk can be covered using Supplier Audit to verify supplier background and Product Inspection before shipping.
We do this everyday at our company Asia Quality Control (http://AsiaQualityControl.com).