After I covered some great tips on how to avoid scam suppliers on Alibaba.com, I received a huge amount of feedback from readers.
With a few exception (which is always the case) most of the responses were very positive and they appreciated the article which would help them out in case they needed any guidance in relation to importing through AliBaba portal.
Like always, I love to keep you updated on the latest news and views relating to ecommerce in general and eBay in particular.
AliBaba recently introduced a new fantastic feature called Trade Assurance. This is a great feature as well as an effective filter to weed out scam sellers and import real and quality products.
Before I dig it deeper, let me remind you that I am not affiliated with AliBaba in anyway and I don’t know of any affiliate program associated with the company. I always put a disclaimer on such posts, especially relating to AliBaba, because there is a lot of discussions and scam stories relating to the site which are often due to newbies own innocent “ignorance” in the field of eCommerce.
Without further ado, let us get started and dig the trade assurance feature further.
What is Trade Assurance?
Trade Assurance is a payment protection service for buyers recently introduced by AliBaba.com.
Just like eBay and PayPal who offer their customers money back guarantees subject to their terms of service, AliBaba introduced its own payment protection program by the name of Trade Assurance.
Now, it may not match eBay’s or PayPal’s protection standards, yet it is a great step forward in building confidence among buyers who are interested to import directly from China.
The Service is Free
The service is completely free and you do not have to pay anything for the service while buying from participating suppliers.
Beware Not All Suppliers Have Trade Assurance
Any supplier listed on AliBaba is not a part of the program. Only suppliers who have agreed to participate in the plan are taken in to account.
So it is important that you look for this trade assurance icon before you proceed.
100% Protection of Agreed Amount
Trade assurance differs from supplier to supplier. Most supplier fall in the range of $3000 to $5000 which is a good amount especially for first time importers. Some suppliers even offer up to $25000 of trade assurance amount
Your payment is protected up to 100% of the amount agreed between you and the supplier. This is called the Trade Assurance Order Amount (TAOA).
If a supplier trade assurance limit is $3000 and you file a claim, you will get 100% protection of that amount in case the claim is awarded in your favor. Before the claim is awarded, AliBaba will do inspection of the goods and if the supplier is found to have made a default, you will not be charged inspection fee.
What Does the Trade Assurance Cover?
There are three main areas the Trade Assurance Covers namely:
When the supplier fails to deliver the goods in time as specified in the contract.
Pre-Shipment Product Quality:
Once you put your order, you can arrange for pre-shipment inspection to make sure that the order meets the quality standards. In case the inspection finds that the goods do not meet the quality standards, you may refuse to accept the order. In the light of the inspection report, you may either reach a settlement with the supplier or file a claim after 15 days if the case is not resolved.
Only Order with Participating Suppliers
Bear in mind that all suppliers do not participate in the program. I know I have already mentioned it before. I am reiterating just in case you missed that point as it is absolutely essential to understand it. You will have to go for the Trade Assurance icon and then check the suppliers Trade Assurance Limit.
When you are searching for products in AliBaba, make sure you check the filter trade assurance. This will only show up suppliers who are participating in the trade assurance protection plan.
Negotiate with the Supplier
Once you have spotted a supplier and a product, don’t just jump in thinking you are already covered. You must agree on the Trade Assurance Amount Order. You must also specify the shipping time.
Pre-shipment inspection quality is optional. If you go for pre-shipment inspection make sure you negotiate with the supplier and be as detailed as possible regarding the quality requirements.
It is a good practice to ask the supplier for the agreement draft and then go through it thoroughly. Once you have read it, send amendments or modifications to the supplier. Once you are happy with all the details, you may sign the contract.
How to Submit a Claim?
OK.. now you have ordered the products and unfortunately it does not go as agreed in the contract. So what should you do now?
You can file a claim with AliBaba. If the buyers responds within 5 days, AliBaba will encourage you and the supplier to reach a settlement within 15 days. If you do not reach any settlement with 15 days you may file a claim and wait till it is processed.
If they do not respond within 5 days, then you can straight away file a claim on the 6th day and wait till it is processed.
What is Not Covered?
This is the most important part of the whole new TA feature. Don’t just think that a company is participating in the TA plan and you are covered for everything. You will still have to follow all the precautions to avoid any issues.
You are not covered if any of the following happens
- Disputes for reason other than late shipment
- Product quality issues after shipment
- Damage during pick up or transit
- Delayed delivery
- Goods such as vehicles, real estate and digital products
Let me clarify here that most people are confused with shipment in time. That means that the supplier will ship on the date or time specified in the contract. Once the suppliers have shipped it in time, they are not liable for any delays during transit.
It looks to be a bit favoring the supplier, but once they ship the goods, they have no control over the shipping company. It is like when you ship your eBay item well in time and it gets delayed during transit. Yes, you do get angry customers for the delayed delivery, but the reality is it is beyond your control.
It is not a perfect solution to all the import related problems when it comes to quality of goods, in time delivery, customer service and finding genuine suppliers. Yet, it is a great step forward. I would rather say it is a great leap forward in adding to the filters already in place to avoid scams.
If you work with the supplier and specify all details in your contract before you put your order, the trade assurance feature is your “insurance guarantee” if things go wrong.
Besides offering protection for payment, trade assurance is a terrific filter if used for the sole purpose of weeding out scam suppliers to reach out genuine business people. Along with other filters such as length of time, gold status, modes of payments etc. trade assurance is yet another fantastic feature that can assure that you order form authentic sources.
Just like the Gold Suppliers membership program, scammers are not able to apply and get approval for trade assurance.