Payment is a significant concern for businesses when it comes to importing.
There are risks involved in placing an order and paying a company halfway across the globe. Online scammers are numerous. How can you avoid being scammed by someone trying to take your money? This list contains payment options that will help you protect your business against scammers.
START WITH SMALL ORDERS
To test the quality of the merchandise before you make your first purchase from a supplier, it is a good idea to order a sample. Businesses recommend that you never import from a company that refuses to give you an example. There are reasons to be concerned if your supplier refuses to provide you with a sample.
PAYPAL – TESTEN YOUR SUPPLIER
Many veteran importers can determine the legitimacy and credibility of a supplier simply by checking if they are members. Paypal has strict standards and can remove a company from its services if it receives too many complaints about the business. If the company isn’t a member, it is a sign to be cautious. It can also be difficult for companies to open Paypal accounts in China. You have options.
SERVICES & PROTECTION OF ESCROW
Escrow acts as a “storehouse” of money, standards and details for the sale agreement. Escrow receives the money, and releases payment to the supplier after the terms of the contract are fulfilled. Both parties are protected by this service. This service protects both the supplier and the buyer. It ensures that they are paid promptly. The fees associated with this payment method are not included. This method is helpful in preventing you from being scammed when placing your first order with a supplier.
PAYMENTS OVER CREDIT CARDS
Many sourcing companies recommend that you pay your invoices using your debit or credit card. This payment method offers additional protection from the bank. To retrieve money from overseas companies, most will use a merchant account. However, this requires them to go through multiple verifications. Many credit card companies also offer points systems that can quickly add up over time.
A wire transfer is where the buyer transfers money from his bank account into the account of the supplier. Transfer fees vary from one bank to the next. The time it takes to transfer money can take anywhere between 3 and 5 days. This method is the most vulnerable to scammers, but it will not stop them from stealing your money. This method is often used by businesses that have a long-standing relationship with their supplier. We recommend that you transfer the funds to the supplier’s business account. (Never transfer money to your personal account.
Some importers will work out a payment plan with their suppliers. Many smaller businesses can’t afford to pay until the merchandise is sold. You may be able to negotiate a payment plan that includes forty per cent upon receipt of merchandise, thirty per cent 30 days after shipment and the final thirty per cent thirty days later. If you’re new to each other, however, it may be challenging to agree to this type of payment plan. The supplier is responsible for any loss if a buyer fails to pay.
There is no one buyer or supplier that is the same. What works for one company might not work for another. It is essential to work together with your supplier in order to find a way that protects you both. Once trust is established, you can agree on more straightforward payment methods.