Additional Layer of Protection with Trade Assurance

22.08.2017 |

Episode #8 of the course Fundamentals of importing physical products from China by Damir Serbečić


Hey, it’s Damir with another lecture about importing from China!

Today, we’ll cover how to add an extra layer of protection when paying Chinese suppliers by using Trade Assurance.

Trade Assurance is a free service offered by to help develop trust between buyers and suppliers.

Trade Assurance can help you settle disputes in case the supplier fails to:

• ship on time

• deliver what you ordered

Having Trade Assurance coverage means that your supplier will fulfill their end of contract, or Alibaba will refund you for the covered amount.

Trade Assurance is very similar to a Letter of Credit, which is a letter issued by a bank to another bank (especially one in a different country) to serve as a guarantee for payments made to a specified person or company under specified conditions.

Trade Assurance service is absolutely FREE for buyers. However, keep in mind that you still need to pay transaction fees when you make a payment. Transaction fees vary by the payment method you choose.


How to Find Suppliers Who Accept Trade Assurance

If a supplier accepts Trade Assurance, you can be pretty sure it’s a legitimate supplier.

When researching suppliers on Alibaba search results page, click on the Trade Assurance checkbox at the top. This will refine the search results to show only suppliers who accept Trade Assurance.


What Trade Assurance Covers

Below are a few examples of what Trade Assurance covers:

• You purchased 2,000 silicone spatulas but received only 1,980.

• You purchased 200 microphones but 60 units don’t work properly.

• Your supplier agreed but didn’t deliver the CE certificate for your order.


What Trade Assurance Doesn’t Cover

Below are a few examples of what Trade Assurance doesn’t cover:

• You purchased 2,000 units of silicone spatulas, but you decide that you don’t want them anymore

• You ordered T-shirts and received a different fabric than you expected, but in the contract, you didn’t clearly specify which material you wanted.


How to Start a Trade Assurance Transaction

1. Request Trade Assurance transaction.

When negotiating with a supplier, request to make a transaction via Trade Assurance. (This service is FREE, so why wouldn’t you use it every time?)

Whether you use Trade Assurance or not, you’ll still have transaction fees when you make a payment.

2. Draft a Trade Assurance contract.

Once you have negotiated all the details with a supplier, it’s time to draft a Trade Assurance contract.

Ask your supplier to draft a Trade Assurance contract by covering all the negotiated details in the contract. Once drafted, the supplier should send you the link to the Trade Assurance contract.

3. Negotiate and confirm the Trade Assurance contract.

Read the contract and, if needed, negotiate any changes.

It’s IMPORTANT that you specify your requirements in great detail, such as product materials, quantity, shipping methods, lead time, obligations, etc.

4. Pay for goods.

Make the payment to the supplier’s designated Citibank account. Once a supplier receives the payment, Trade Assurance contract should be updated for the paid amount.

It’s simple as that!

In case you received a product that is not as requested or the supplier failed to ship on time, you can always open a dispute. Make sure you have all the necessary proofs and facts that can help you win disputes.

If the dispute reason isn’t specified in the Trade Assurance contract or if you don’t have the necessary proof, you’ll have hard time winning disputes.

That’s it for now!

In the next lecture, you will learn about importing procedure, customs duties, and fees.

Talk to you tomorrow!





Recommended book

Never Split the Difference: Negotiating As If Your Life Depended On It by Chris Voss and Tahl Raz


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