| hercheys | 01-04-2013 07:37 PM |
The difficulty in buying from Chinese suppliers is that most of them will only accept Western Union and wire transfer payments. As we all know, these are not secure payment options and potential buyers are usually not that willing to take such risks.
A few ways to protect and methods of exchanging safely online.
Prepare an indepth sales contract and list your conditions of sale, how you have agreed to pay, a complete inventory, shipping details etc. For a directory of INCOTERMS (International Commercial Terms) - a universally recognised set of definitions of international trade terms, visit Import911 so there is no discrepancy as to which shipping method you have agreed on. Fax it to them and get them to sign it. If you can't do this yourself, ask family members and friends if they know a lawyer or law student to draw one up for you.
Use 'Escrow' with your wholesaler.
Using an Escrow service with your wholesaler is just like using SafeTrader at TradeMe. Escrow.com, an accredited escrow company, acts as a secure third party to protect the Buyer and Seller. Beware of sellers trying to convince you to use other Escrow services, it is very easy to set up a ⊗⊗⊗⊗ website or engineer fraudulent emails. Insist on setting up your own transaction, only with Escrow.com.
Try to use safe methods of payment.
Credit Card: This is a relatively safe method as credit card companies will usually refund you if you are a victim of fraud. Wholesalers may be cautious of taking credit card orders because if the card or number is stolen, then the funds are deducted from their bank account to refund the victim after they have already sent the goods to the fraudster. It is up to the wholesaler to acertain whether or not the order is fraudulent, this is why most companies will only ship to the address on the card.
A 'Standby' Letter of Credit: This is where the bank acts as a SafeTrader for you. It is an exchange of documentation where the bank acts as a guarantor for you, agreeing that they will pay the supplier when the goods arrive and are inspected, you will need to convince your bank that you are good for the full amount. Make sure you check every detail on the letter of credit issued to you.
Cash On Delivery: Although it is fairly remote they are going to go with COD to New Zealand, you can give it a bash.
Choose other methods of payment carefully.
PayPal: PayPal is fairly safe, as long as the seller is verfied, check their buyer/seller number alongside their verification to confirm their number of transactions. Never deal with unverified sellers. PayPal will freeze an account if you report a scam so only make credit card payments, never e-cheque or cash from your bank account.
Try to avoid Telegraphic or Wire Transfers.
A TT or wire transfer is when the full or part payment is made directly into the seller's bank account. Most legitimate businesses prefer TT to get a deposit, or require the full amount in advance as it is the least possible risk to them. If they absolutely will not go with any other payment methods be very wary, there is no reason for legitimate wholesalers to have a problem with safe methods of payment.
Don't be pressured into going with TT for a first time transaction, it should only be regarded as a fast and cheap method of payment between buyers and sellers who have built a up a mutual trust.
Avoid Western Union like the plague.
Never, ever use it. Western Union is only safe if you are sending money to a relative and it is a favourite of many internet scammers. Flatly refuse to use Western Union in any other case. It may seem like the deal of a lifetime but you are almost guaranteed to lose the full amount. Visit Western Union's Consumer Fraud Awareness page for more information. | 
