Is it possible to use PayPal with suppliers in China?

Full Question When I ask to pay by Pay-Pal the supplier is not interested? Should I lose confidence in working with them?

The value is $200.The problem that we are faced with in Australia is if you TT the money and the product is faulty, the buy side does not have any protection. Pay-Pal will protect the buyer. We prefer to buy a sample using PayPal, test it, then buy 10 more pieces, then 100 pieces and so on.

Answer Thanks for your question. The answer really depends on volume. Small traders/ exporters who sell at very small volume (units or small cartons) generally work w Pay Pal if they have clients overseas. Factories/ medium-large suppliers almost never use PayPal as a transaction tool due to the service fees and complicated set up.

I think at those volumes you will have a hard time convincing a supplier who is used to larger orders to set up pay pal just for you. But I have two suggestions.

1. If the supplier does want your business, then do one of the following:
   1. Ask to pay after the samples have arrived
   2. Pay half up front and the rest after it has arrived
   3. Pay 100% upfront, but agree on a reduced unit price when future orders are placed in an agreed period of time.
2. As it is probably too expensive to fly over and check a few units yourself, consider using a third party Quality Control company (3PQC). They charge a few 100 USD to check out a supplier or inspect sample before they are sent. Granted your order size is only a few 100 USD, but if you get scammed and end up paying 2 or 3 bad exporters before you find a legit supplier with legit quality, then paying 3PQC upfront will save you money.

Before you engage the supplier, simply ask if they will allow an inspection. If they say “no”, then you should run away. Asking a key question doesn’t cost anything. Ask for references too!

Here is a video and a link to a section in Ask the Experts about using 3PQC:

• Video: Project management and quality control
• Ask the Experts: Effectively conduct factory inspections, quality controls and product sampling

Here are some articles about the challenges of being a small buyer:

• What to look out for when placing small volume orders