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How do I know if the pricing and import-export information I've received from a China supplier is legitimate?

Posted: 2012-02-27

Full Question

When I asked about an item from easttech-china.com/. I wanted to know if pricing was in US dollars and was told, "Yes". Next I asked about freight to the US. I was given a price for 1 item and was told if I ordered more than 2 items, freight was free to the US. Next, how do I get it after it gets to the US? I assume pick up on ship docks in Los Angeles, CA., but does it have to go through some import-export company first? If so, what kinds of fees are incorporated and what kind of import tax would I have to pay? Will it be percentage based, weight based, or what?

Answer

I had a chance to review your notes and the website of the seller. I hope I am wrong, but my gut tells me you may be about to fall victim to a common scam.

The following red flags lead me to suspect the supplier is not legit:

  • Website is very similar to the design used by other scam artists.
  • VERY wide range of products. Manufacturers and trading companies generally don't carry this wide of a selection.
  • The branded products offered are not readily available, to my knowledge, in China. And if they were available, the pricing would be much higher than what you could buy them for back home. Check out this answer on our Ask the Expert section: "Genuine products from China?" to learn more about how pricing works globally for branded products. The article is mainly about electronics, but the concept applies to your motorcycles too.
  • The phone number given is a cell phone, the emails are free Hotmail and Gmail and no formal address given. I would bet you dollars to doughnuts that this "company" doesn't exist.
  • The bank account listed is a private account not a corporate account. Run away my friend! Run! I'm from a small town in the USA where we tend to assume the best about people until proven otherwise, but maybe I have been in China too long (15 years!) so I'm pretty jaded and tend to assume the worst now when sourcing.

Before you make a payment to this company or any other company in China (regardless if the ownership is Chinese, American or something else), consider doing some due diligence to confirm the company really exists. I would be happy to introduce providers of this service. But if you want a quick, down and dirty, free way to expose a scam, just ask them the following:

  • Can you have a 3rd party inspect the goods before it ships and before any payment is made?
  • Can they put you in touch with some other clients to get some references? I bet they will dance around these questions and not give you a clear answer. Having said all that above, if this supplier turns out to be legit, please let me know.

But if they have already scammed you by the time you get this email, then I have two ideas:

  • Let me put you in touch with an English-speaking lawyer in China who has helped other victims of scams recover funds.
  • Please let me list the supplier on my blacklist of bad suppliers on my blog so we can help other foreign buyers avoid falling into the same trap.

On the off chance that this supplier proves to be legit, let me now answer your questions about logistics.

The website of the supplier says they can arrange door-to-door shipping, but it sounds like they are not very clear to you about the process (another red flag).

Specifically, you asked: Next how do I get it after it gets to the US? I assume pick up on ship docks in Los Angeles, CA, but does it have to go thru some import-export company first? If so, what kinds of fees are incorporated and what kind of import tax would I have to pay? Will it be percentage based or weight based, etc.?

It is possible for the seller to arrange door-to-door including all taxes and import duties and you would not have to engage any 3rd party. But most sellers in China don't provide that level of service and leave it to the buyer to clear inbound customs in the USA and arrange final delivery from port to your door. A legit supplier would give you a quotation which is very clear about the incoterms and payment terms so you would know all the details about how it ships and who pays for the logistics. If the contract (I bet they didn't even give you a formal quote let alone a contract...another red flag) with your supplier leaves the US customs clearance up to you, then you would be wise to engage the services of a customs broker or freight forwarder. Without more details on your product Ican't tell you the import tax that would be applicable, but the freight forwarder certainly would be able to find out.

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