Today I want to talk to you about a NEW FEATURE that has been introduced by Alibaba.com that you may not be aware of.
And it’s actually something that I am very excited about!
It’s called Trade Assurance and it’s a terrific new service that basically protects your order from a supplier up to a certain amount (which is based on their selling history).
The process itself is actually very simple and easy.
You search for a supplier as normal, but now there is a new filter – Trade Assurance, which has been added to Gold Supplier, Onsite Check and Assessed Supplier:
So if you select this filter, you will only get results from suppliers who have agreed to trade under the Trade Assurance program.
Under the company’s name and contact details link, there will be a small Trade Assurance icon, and if you hover over that you can find out the exact amount that this company is covered up to.
Now this is where I thought there would be a problem, as I imagined Alibaba being very cautious here and only putting minimal amounts for each supplier, but I have actually been pleasantly surprised! The vast majority of suppliers that I’ve checked have at least $3,000-$4,000+ and many have $15,000-$20,000 and above which is more than enough for most first time importers!
Then after searching for suppliers like this, you continue as normal and contact them to discuss the price and other order details.
IMPORTANT – this is the critical part:
You need to be very specific in all the details that you agree with your supplier!
The Trade Assurance amount and coverage is based on the details that you agree and specify in your purchase order.
You can’t claim for late delivery if you don’t specify an exact date… and you can’t claim that your order is not of the required quality unless you’ve detailed some specific and measurable requirements…
I hope you understand what I mean here as this really is the most important aspect of Trade Assurance working as intended.
And actually, this is just good practice anyway and what I always recommend to all my importing students – you have to be very detailed and specific with your supplier about your requirements.
That way, they know what you expect and can deliver on that – it’s just 100% better for all parties and is something that you should be doing anyway, regardless of Alibaba’s new service.
Okay, so after you’ve finalised all the details with your supplier, you submit a purchase order request to them (via Alibaba). After they create the purchase order, you both have to confirm it – this is basically akin to signing a contract and means that both the buyer and supplier have agreed to all the terms specified in the purchase order.
And just to recap – the three most important points of the purchase order (in regards to Trade Assurance) are:
- The required shipping date
- Product quality requirements
- The agreed Trade Assurance amount
Please remember that it is not the supplier who sets the Trade Assurance amount, but Alibaba itself – so you can only be covered up to the maximum set and there is no way to alter this (it’s based on the supplier’s trade history).
But as mentioned above, this shouldn’t be a problem as the amounts are actually quite generous and should be more than enough to cover small-medium import orders.
Then after this point, everything just proceeds as normal:
1) You pay for your order under the terms stated in the PO (and this has to be to your supplier’s bank account via Alibaba.com) and your supplier then starts to fulfil that order.
2) Then, before your order is shipped, you arrange for an inspection of your goods to ensure the quality is up to par and as agreed upon.
I’ve talked about this a few times before and basically the easiest way is to just use one of Alibaba’s many inspection agents, which you can find here.
Arranging a pre-shipment inspection is something you should always do as the cost is minimal and it’s one of the best ways to ensure you receive your order exactly as expected.
And for Trade Assurance, you HAVE to have an inspection done pre-shipment. This isn’t eBay/PayPal where you can say the order wasn’t as described after receiving it, no – it just doesn’t work like that and for a good reason – these are large quantity, wholesale orders!
3) If the inspection finds that the quality doesn’t match the agreed upon requirements, or if your order is not shipped on time, then you can submit a claim for online negotiation.
This is basically the point where you and your supplier will try to reach a resolution that is acceptable to you, without any 3rd party influence.
4) If that’s not possible, you can progress your claim and Alibaba.com will make a final determination. If they find that the supplier didn’t fulfil the purchase order, then you will receive a full refund for your transaction under Trade Assurance.
Submitting a Claim
A couple of points about submitting a claim so that you understand the process and exactly how it works:
- For claims to do with the product quality not being as described, if you cannot reach a solution with your supplier directly and ask Alibaba to arbitrate, they will send one of three third-party companies to perform an inspection of the goods (the three companies are SGS, TUV Rheinland and Bureau Veritas) and you will have to pay for this inspection yourself.
If the supplier is found to be responsible, you will be refunded the inspection fee in full (as well as the Trade Assurance refund for the actual order).
- Secondly, please remember that Alibaba will not get involved right after you submit a claim, but will leave it for you and your supplier to try and reach an amicable resolution first.
This online negotiation period lasts for 15 business days so please also bear that in mind.
Overall, I am extremely pleased with this new feature that Alibaba have introduced.
It’s another great filter and tool to help us ensure all orders go smoothly and it adds a degree of built-in protection.
Of course, this isn’t eBay/PayPal and there are some specific terms and conditions that have to be fulfilled for Trade Assurance to cover your order but really, that’s to be expected.
These are international, bulk orders between two businesses so you simply cannot expect the same level of protection as with local, retail orders.
All things considered, I think this is a great new program feature that will make product sourcing even easier.
And anyway, many of the requirements to qualify for Trade Assurance are things that you should be doing already, such as detailed product and shipping requirements, production and pre-shipment inspections etc.
So if anything, it’s worth it simply to make sure you always follow these best-practices and protect yourself as much as possible when ordering from Alibaba (or any other Chinese supplier for that matter).
Use this in conjunction with my other articles on importing from China (links below) and you will reduce the chance of you being scammed/not receiving the order as you expected to an absolute minimum.
Alright, that’s it for today, but if you have any questions at all (about Trade Assurance or importing in general) then post below in the comments section and I’ll answer you personally.
Until next time!
All the best,