Hi mobile1,
1) How can I secure the transaction?
You will use a Letter of Credit (L/C) between your bank and the
supplier's bank. In this way, the money will be held in escrow until
all of the terms of the L/C have been met. One of the conditions you
will include in the letter is a pre-shipment inspection.
>> Tips and How-Tos regarding importation
FOREIGN AFFAIRS
Sourcing Overseas Could Help Your Company Reduce Costs and Stay
Competitive in Today?s Economy We?ve Got 10 Essential Steps to Get
Your Started.
By Craig R. Moss
Step #10: Arrange A Payment Method
"As the buyer, you don?t want to release the money until you know that
you?re getting what you ordered. Sounds reasonable, doesn't it? Now
put yourself in the supplier?s shoes. You don?t want to release the
goods until you know you?re going to get paid. International trade is
full of horror stories from both ends.
If you think arranging payment is hard now, imagine what it was like
before e-mail and air courier. Over the hundreds of years that
international trading has gone on, banks have historically acted as
the trusted intermediaries between the two parties. Banks use the
Letter of Credit (L/C) for this purpose. The official definition of an
L/C is ?a written commitment on behalf of an importer (buyer) to pay
an exporter (seller) against presentation of documents that comply
exactly with the terms and conditions of the agreement.?
When you place the order, your bank opens an L/C to the supplier?s
bank. The money is held in escrow until you take possession of, and
approve of, the products. Then the money is released to the supplier?s
bank. One tip: You may want to include a pre-shipment inspection as a
condition of the L/C.
As the relationship with the supplier grows and trust is established,
many companies chose to wire transfer payments and eliminate the L/C."
http://www.sba.gov/library/successXV/14foreignaffairs.htm
10 Tips for Safe Trading
Use Pre-Shipment Inspection Services
"If you are a buyer, you can protect yourself against poor quality by
ordering a pre-shipment inspection of the products. You can demand the
inspection as a condition to payment."
Protect Yourself Against Payment Risk-You Are the Buyer
"If you are a buyer, sometimes a supplier may ask you for a deposit
(usually 30%) before he accepts the order. While this is not unusual
between long-standing trading partners, if you are doing business with
the supplier for the first time, make sure you have done sufficient
background checks on the supplier before you agree to the deposit, or
ask for a different form of payment, such as a letter of credit. If
the seller seems more focused on payment than any other issue, or
indicates that cash payment must be made urgently, more caution should
be given to the transaction. Be extra cautious when the seller asks
you to send money to an account whose real owner cannot be traced; for
example, you cannot trace the real name of the person behind an
account with a wiring service such as Western Union."
http://www.alibaba.com/trade/servlet/page/static/safetrade/tips
Some Basic Importing Cautions & Guidelines
http://www.krtinspect.com/importcautions.htm
How can I enjoy greater security when contacting potential business partners?
"For greater security, we suggest that you can adopt the following
measures when contacting potential business partners through the
Internet
1. Call the telephone and fax numbers provided in the company's
website posting to check that they are genuine.
2. Check with the registrar of business in the country or territory
that the other party claims to be from, to insure that the business is
legitimate and licensed to operate...
3. Use an external inspection service to insure that the products
meet your requirements.
4. Pay for a sample before purchasing in bulk.
5. Be guided by your instinct...
6. Meet Your Partner in Person...
7. Confirm Contact Details...
8. Protect Yourself When Ordering or Providing Samples...
9. Use Pre-Shipment Inspection Services : If you are a buyer, you can
protect yourself against poor quality by ordering a pre-shipment
inspection of the products. You can demand the inspection as a
condition to payment.
10. Protect Yourself Against Payment Risk-You Are the Seller...
11. Protect Yourself Against Payment Risk-You Are the Buyer : If you
are a buyer, sometimes a supplier may ask you for a deposit (usually
30%) before he accepts the order. While this is not unusual between
long-standing trading partners, if you are doing business with the
supplier for the first time, make sure you have done sufficient
background checks on the supplier before you agree to the deposit, or
ask for a different form of payment, such as a letter of credit i.e.
SecureLC. If the seller seems more focused on payment than any other
issue, or indicates that cash payment must be made urgently, more
caution should be given to the transaction. Be extra cautious when the
seller asks you to send money to an account whose real owner cannot be
traced; for example, you cannot trace the real name of the person
behind an account with a wiring service such as Western Union.
12. Suspect Shipping or Contact Addresses...
13. Beware of Fake E-mail Addresses..."
http://www.exportbureau.com/export_fraud.html
Product Inspection
http://www.export911.com/e911/purch/docINSP.htm
Tips: How to Avoid Fraud
http://www.made-in-china.com/tradeservice/additional/?for=trade_fraud
2) Links to companies and parties who offer such a service?
>> Inspection Services
KRT Inspection
"Experiencing these problems with your China-originating shipments? If
so, KRT pre-shipment inspection services are guaranteed to minimize
defect rates and maximize shipment quality! And it's all 100%
guaranteed by KRT, the only North American shipment inspection agency
entirely focused on China shipment inspection."
"Most KRT-serviced China inspection locations just $295/day"
http://www.krtinspect.com/
"BUYINSPECT China specializes in supplier quality inspection in China,
source inspection in China and pre-delivery inspection services in
China and has offices and operation units in Shenzhen, Guangzhou,
Zhuhai, Qingtao, Shanghai, Nanjing, Wuxi, Changzhou, Hangzhou,
Ningbo,Swatow, Fuzhou plus many others."
http://www.buyinspect.com/inspection.htm
Hong Kong East Inspection Co.
We offer a fixed rate of 258 USD per man/day (all included) for
standard inspection.
http://www.eastinspection.com/
Hong Kong Q.C. Center
http://www.hkqcc.com/services.html
BridgeNova Inspection Services
http://www.bn-inspection.com/
SGS Inspections
http://www.us.sgs.com/technical_inspections?serviceId=28169&lobId=16703
Pro QC International
http://www.proqc.com/index.shtml
3) Estimate on how much this would cost... ballpark range is ok.
About $300 per day, give or take.
>> Additional Links of Interest: Escrow
These companies handle the documentation and money transfer but do not
perform inspection of the goods.
"SecureLC holds the invoice total in a secure escrow account on behalf
of the buyer and issues the seller with a Secure LC which is paid once
the goods have been shipped."
http://www.securelc.com/overview.html
Escrow.com
https://www.escrow.com/index.asp
I hope this helps. If you have any questions, please post a
clarification request and wait for me to respond before closing/rating
my answer.
Thank you,
hummer
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