Take the right steps, Do not be a victim scam!

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Posted on 22nd April 2010 by WebTeam in China Sourcing

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Tips to Verify a Chinese Supplier


Some Chinese companies – even some paid members of trade websites – are scammers. Your business is not legally protected by Chinese authorities if you are dealing with an illegal company. Buyers need to verify potential suppliers first.

Unfortunately, while there are some Chinese websites that can help provide company verification, there is little support for us English speakers. So, here are some tips to help you be sure you are dealing with a valid supplier:

1 – Contact Information

Most of the time, scammers do not provide correct business contact information. They submit a false address, telephone number, etc. TradeStaff recommend that ALL buyers make personal contact with suppliers before concluding a sale.

2 – Company Verification

Every legal company in China needs to be registered with Chinese government authorities at the Bureau of Industry & Commerce (BIC). Once approved, each company is provided with a unique company number. Be sure to get this number from suppliers – if they cannot provide one, walk away. Once you have the number, check with the local BIC administration office to verify company information. (NOTE: You will likely need to have someone Chinese make the call, as English is not supported).

In China, all companies that wish to import and export must apply for and obtain a Certificate of Import & Export from Ministry of Commerce and its authorized local agencies in China. This must be done after a company has registered at their local BIC. In addition, trade companies have to register with Chinese Customs House and its regional branches before conducting formal business with international businesses. Buyers should ask suppliers for their company number from BIC, as well as a copy of their Certificate of Import & Export.

3. Payment Terms

Scammers never accept Letter of Credit (LC) payments. The fraudsters of the world prefer Western Union, TT and PayPal payments – as these cannot be traced. Buyers making a large purchase should definitely pay be LC. For sample orders and smaller shipments, consider using an escrow service (like Escrow.com).

4. Customer Referrals

Professional suppliers understand the value and power of customer referrals. Before finalizing an order, ask the supplier to provide names and contact information for some of their satisfied buyers. You may wish to start by asking if they have shipped product to your country before. If they say yes, get customer referrals there. If not, ask what other countries they have sold to and get info for some of those customers.

5. Unbelievable Prices
Part of the lure of scammers is to offer products at truly unbeatable prices. But, the reason they can offer such low prices is that you will never get the product – so who cares what the sales price is? Consider this: If the deal sounds too good to be true, it probably is.

6. Branded Products

China is famous for selling copied versions of branded products, such as watches, electronics, shoes, handbags, golf clubs and more. At the same time, there are a number of legitimate Chinese producers of branded products, that sell surplus quantities illegally. Buyers should note that while a Chinese company may provide you with a certificate indicating they have the right to produce the branded item, this certainly does NOT authorize them to resell those items. Check the wording carefully.

Chinese suppliers provide buyers with real opportunities for cost savings. Just remember that without conducting appropriate due diligence, you are going into the deal blind and putting yourself at risk. Like in the rest of the world, most businesses are professional. With a little research, buyers can trade confidently and develop valuable business relationships.

Are You A Victim Of A Scammer?

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Posted on 22nd April 2010 by WebTeam in Victim Of A Scammer?

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Submit to us what happened, along with proof of your trade and will we review it and post it on our website and provide you further help.

Email us!

Thinking about sourcing products from China? Read this!

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Posted on 22nd April 2010 by WebTeam in China Sourcing

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Here is the “what you need to know” before buying from sources online from china.

AVOIDING SCAMMERS – 5 Steps to protect yourself

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Posted on 22nd April 2010 by WebTeam in Trade Guide - 5 Steps

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Here are the 5 points I always check before going into any transaction with a supplier (excerpt from my book, so please forgive me my bad english, I may not be a good translator):

AVOIDING SCAMMERS

So now you have targeted your products, you are ready for sending your inquiries.
The fact that you are not used to international business will make you the perfect victim for scammers, they will feel it in your messages and will take care of you. It’s now your time to defeat them at their own game.

You can’t even imagine the creativity of scammers to convince you that you are dealing with a real company. But there are many manners to be sure that the person you are in contact with is reliable.

The checking process is simple (and free !), follow these checking points anytime you feel ready to place an order:

-Check the quality of your contact’s communication,
-Check the accuracy of the information you are given about products,
-Check that the company have a registration number,
-Check the company’s bank account,
-Check the company fax and phone numbers and their postal address,
-Check their internet website.

Here’s the detailed checking method for each point:

1- Quality of the communication and prodcuts information

When talking about wholesalers, we are talking about professionals. Most of them are managing huge stocks and are not common with being friendly. Just imagine an hundred faxes and phone calls per day, with customers asking you to always give them lower prices (Yes, that’s you!).

However it can be stressful, wholesalers know that a single price error can be fatal to their business. If you loose by mistake 50 cents on each 2,500 products sold, the total loss is 1,250 $. A company cannot handle such a loss two times in a year. Be sure that wholesalers know their job and are very accurate when spreading information.

The first thing you will be able to verify is their ability to communicate information. Maybe you will not get very friendly emails, but be sure that any information you will have asked will be given.

Think about something: scammers never have the products they are selling. If you ask a very technical question, a wholesaler will give you an accurate response, while a scammer will ignore it or will mumble about it.

A checking example: “Will the Ipod Nanos have the good AC/DC plug, I need the 220/240V European norm?”
The scammer’s answer will be: “Yes of course, we have the European models!”, when the professional’s one will be: “Since Nanos are charging via an USB 2.0 cable, power plug is an option. They will charge on any computer on earth equipod with USB 2.0. Language can be chosen at first start or changed later”.

Don’t hesitate to ask pitfalls questions like this one, you will immediately know who you are in contact with. You are a seller, all you want are sexy products, you are not assuming to know all about them, don’t fear to ask even silly questions.

2 – The company business registration number

First of all, ask the wholesaler to send you proof of registration of the company. Depending of its state or country, the company have a registration number or VTA/TVA number. This number is not a mystery, it’s the identity of the company in its country, its business authorisation number. If you can not have this number from your contact don’t go further; this person is a scammer.

When you have this number, search the web (like google.com) for a business verification site in the country where the company is registered. This service is not always free, if you cannot afford a fee, send a fax to the business information center of the city where the company is located. It will only cost you a fax.

For Europe, check this usefull site:
http://europa.eu.int/comm/taxation_c…n/vieshome.htm

HINT : To find these verification websites, use www.google.com, and type « google thailand » in the search bar, to find the google thailand website, then check “only Thailand pages” to refine your search results.
Than type « verify company » and you should get good results in english. If you don’t find such service, ask your wholesaler for the address, phone number and fax of the chamber of commerce/business where their company is registered. It should not be a problem for him to give you this information.

If he wish to send you a copy of his company certificate, let him do so, but this should be only a document for further verifications, and not considered as an ultimate proof. False documents are very easy to produce today.

3 – Verifying the company bank account

Let’s imagine you have placed an order and the method of payment is T/T (for Telegraphic Transfer, well known as bank to bank transfer). Ask your contact for its bank full address, phone and fax number. Verify all these on the bank website and call the bank to ask them if the bank account numbers are good (pretending your T/T has been refused by your bank) and try to know if this is a company bank account.

Due to a protection of bank information, you may not be able to verify all. Give the bank all the details you have and just ask them if the information you have is ok.

4 – Verifying the postal address, phone and fax numbers

After some emails regarding a possible order, give a short phone call to your wholesaler. During his work hours of course, but without telling him that you will call him.
You will see immediately if he remembers you, he will not try to argue but only to bring the transaction to an end (this is business, you know).

After that call (or before), check the prefix of the phone number. Try to see if the fax number match with the company number, are you calling on his cell phone, is the +32 the good prefix for Germany?
With google, try to find the phone number of the police office, or a school, or a shop near the company’s street and see if it tends to be the same first local numbers.

The best way to verify a phone or fax number is to find the company in the yellow pages of its country.

5- Verifying the company’s website

If your contact has a website, you’ll have to verify it too. Try to find a website specialized in domain name registration with Google.com.
You can try this site for example:
http://www.raynette.fr/services/whois/

Type the full wesite adress (eg. : www.superwholesaler.com) in the « propriétaire du site » bar, and and click on « proprietaire et infos ». It will give you a large view of who registered the domain name, if it’s a company or a web agency. Look after the name and contact info and see if they are the same as your contact ones.

You can also check the website itself by clicking with your right mouse button and select “properties” in the menu that will open. The images should have an address following the same directory (eg.: www.superwholesaler.com/ipod-box.jpg). If the images are coming from another site, you can be sure this is a scammer site, using a mirror site, leave this contact immediately.

Last thing : ask your supplier for some pictures of his stock or products, with the day newspaper, and a note with your name and his.