Introduction

eCommerce scams are rising day by day. When you physically go to market and purchase a product, it is good because you check the quality at the spot. However, online buying causes several problems. According to Statista, 38% of total scams are online shopping.

The arrest of the scammer is a bit difficult. It has raised concerns about buying from Manufacturing hubs like China. But don’t worry; we have listed the nine major types of scams and tips to avoid them.

Our experts have added some tips. Let’s go through the scam in detail!

 

1．Nine Common Types of Scams when Sourcing from China

Scams in China can be of a wide variety. You need to be cautious of scammers by taking the proper steps. Our experts have sorted out the common types of scams.

Fake company

The most common scam is the faking of the company details. Some scammers print out duplicate certificates. Tell the buyers they are a real deal. Try to copy the names of other popular suppliers. And finally, they set up a contract that is often.

The result?

It is a clear-cut scam. They steal your money and never pay it back.

Non-Delivery Scam

Some Chinese scammers are very clever. They settle deals from sourcing to procurement. Once it comes to delivery, they make their way.

There are a few tricks Chinese scammers can apply:

• They don’t ship the products.
• You might get a fake tracking ID.
• Orders are still under shipping.
• The tracking ID has stuck at one point.

All such issues highlight the scamming cases.

Low-Quality Scams

Most buyers regard it as a mistake, but it is a severe crime in the eCommerce industry. The supplier promises good quality stuff. Even if you agree, production starts. Once the products come out of the production phase, they procure a low-quality material and decreased durability. It can be a pre-planned, low-quality scam!

Payment Fraud

Having a fraudulent payment option can be a scam. Some suppliers ask for directory payments to their bank accounts. Once you’ve paid them, they run away. Therefore, you should confirm whom and through what payment options you are paying.

Counterfeit Products

Copying other seller’s products isn’t a legal thing. Selling such products can even get you arrested since it is a crime. Some scammers in China produce counterfeit products and do such scams.

Invoice Fraud

Some scammers change the payment options midway between the deals. They might change the details and cause scams.

Overcharging

Having hidden fees and demanding extra money for shipping and other issues can be part of a scam. Not all suppliers do this. Being straightforward about the pricing is quite impactful.

Wrong product delivery scams

You order 100 pieces of tops while the seller sends the t-shirts or some other low-quality stuff. That is another type of scam in which product delivery differs from the ordered one.

Intellectual Property Theft

Using other products without permission is also a crime. Some suppliers do that and get you in legal matters. You must keep yourself away from such scamming cases.

 

2. Due Diligence and Research

Do you want to keep Chinese scammers miles away? Well, this point is your stop to explore the right deals and do research. Keep an eye on the following methods.

Company Verification

A verified company means your supplier is 100% authentic and reliable. Finally, you can close the deal and expect the next-level quality.

There are a few ways to validate the authenticity of a company.

● Get a business license

Business License ensures the company has legal status. All companies must have that status. So, grab a business license and verify it. Some scammers can hand over fake certificates, too. Filter them out quickly.

● Use third-party verification

Local Chinese can help verify it. The JustChinaIt team can assist in the verification of the company. So, hire third-party verification services to confirm your supplier is 100% real!

● Try online sources

If you are using Alibaba, get your hands on the Gold or verified suppliers. The Alibaba team manually checks such companies and gives them a verification badge after thorough research.

● Get testimonials

If someone has used the company earlier, it is a treat for you. You can get reviews about the staff and working mechanism. It will highlight whether the company is confirmed!

Background Checks

Ferreting out the background performances is necessary. It helps understand:

• The company has experience and trained staff to tackle your deals.
• The team is 100% authentic.
• You can expect fast progress in your projects.

Here are a few ways to check your background!

● Check portfolio

Every supplier has settled some deals and has to show off his best projects. You can assess the quality by evaluating the portfolio and testing the quality.

● Get the list of past projects

An experienced manufacturer works with many buyers. You can get a list of buyers and their outcomes. Also, consider the cancellation and reasons for it.

● View transaction history

If you are hiring a company on Alibaba or other online resources, it has a transaction history to show. Go through the transactions.

● Interpret Reviews

No matter if there are good or bad reviews, read them all. Understand the points where the seller is lacking. It helps you evaluate whether you should work with this supplier.

 

3. Secure Communication and Negotiation

Communication can tackle most of the misconceptions earlier. You can also proceed to adequate product quality by setting up clear-cut terms.

Clear Communication

Always be clear about your expectations. Tell the suppliers about your business goals and how you will meet them. Define the quality rules so that suppliers can agree to your terms. Avoid the risks of hidden fees by communicating.

If you don’t know Chinese, you can hire a translator. Nowadays, online translators don’t offer reliable translations, which can cause trouble, too.

Contracts and Agreements

Contracts help determine the rules and iron out complexities in the deals. Don’t compromise. Jump into the contracts and keep yourself on the safe side. You can hire legal experts to sort out the terms and negotiate them with the supplier. For example, you can define the ratio of defective products. If it exceeds the limit, the supplier must replace the faulty products with new ones.

 

4. Quality Control and Inspection

Let’s wipe out the quality concerns before it is too late. Here are a few tips regarding the top quality of the products.

Pre-Production Inspections

Get a sample from your suppliers and test its quality. Do you agree with the best quality? If the sample is good, hire the inspection services for the pre-production inspections. You can hire experts like JustChinaIt, who have years of experience in sifting through the best quality of the products. The team monitors the factory equipment and production processes.

In-process and Pre-Shipment Inspections

Now, move to the during-production and after-production analysis. Eliminate all the significant defects during production.

Take a final review before you ship the products. You can set a limit on major and minor defects. Revise the products when the limit exceeds your parameters.

 

5. Secure Payment Methods

Payment scams are an effortless way to steal money. The only solution is to use secure methods.

Safe Payment Options

Payment scams are rising due to online systems. Sending payments to the scammer’s bank can be a big trouble. Scan through the safe payment options and compare them.

Here are a few payments that are safe and effective.

● Letter of credit

It is the bank transfer method in which the bank releases payment to the seller. It can be a relatively safe and reliable method if you want to do transactions.

● Escrow services

In Escrow services, buyers must submit the payment and release it when products are received. If there are delays or risks of scams, buyers can create a dispute and get the money back into the account.

● PayPal

We all know about PayPal. It is the most straightforward transaction method, which is fast and reliable. Moreover, PayPal offers payment security. For example, if Chinese scammers try to steal your money, you can talk to PayPal and get your money back.

● Bank Transfer (TT)

Direct bank transfers are different from the latter of credit. It can be risky, but most banks offer payment protections when sending money. So, try this option for your payments.

● Trade Assurance

Alibaba Trade is quite an excellent method. You can transfer money into an Alibaba account and settle the deal with suppliers. After completion of the project, you can release the payment.

Payment Method	Pros	Cons
Letter of Credit	High security, meets payment terms	High costs, complex documentation
Escrow Services	Secure transactions, funds released on satisfaction	High service fees, time-consuming setup
PayPal	Quick and easy, buyer protection	Fees for receiving funds, limited supplier acceptance
Bank Transfers	Simple, widely accepted	Less secure, risk of non-payment
Trade Assurance	Covers payment, quality, and delivery terms	Platform-specific, coverage limits

 

Avoiding Upfront Payments

Payment of 100% on the contract settlement can erupt the payment scams. Therefore, keep an upfront fee and follow the below strategies to avoid scams.

● Order a small amount

First, test your supplier. You can do this by ordering 5-10 pieces. It can filter out the scammers. Moreover, if you lose money, it will be a portion, not the whole amount.

● Pay partial payments

Request a specific portion of the total amount before the production. For example, you can pay 30% on production and 70% once you have received the order.

● Set up milestones

Milestones can be the safest deal. Pay the price with a different percentage at different points. Set up a milestone of 10% on the contract settlement. Give 30% on the production. Set up a milestone of 20% after the output. Release the rest of the milestones after the delivery.

 

6. How do I find a reliable supplier to avoid scams?

The quest for finding reliable suppliers is never-ending. You have to sift through the suppliers’ market carefully. Here are a few tips to filter out the reliable suppliers for your

● Be aware

Know the market and learn about the supplier. Understand the working mechanism and market rates of the products. Also, consider the quality terms of the suppliers.

● Due Diligence and Research

Dive carefully and research the supplier. Pick a list of the top 10 suppliers on Alibaba or other platforms. Talk to them and learn about their professionalism.

Don’t rush in making deals. Work with the best team ready to fulfill all your high-quality inventory demands.

● Always double check

Confirm the authenticity of the supplier. Check the authenticity of the deal. Monitor your production and minimize the risks of scams.

● Use the chamber of commerce

The Chamber of Commerce is the local integration of the businesses. They have a list of top suppliers in the area. You can get reputed suppliers and enjoy a safe trade.

● Take help from Sourcing agents

Sourcing agents assist in the evaluation of the suppliers. They dig into the local address of the suppliers’ factory. Visit the factory to check the manufacturing facilities. Don’t hesitate to get help from such agents and fulfill your projects efficiently.

 

7. When does a scam occur?

After all the discussion, you might wonder what leads to the scam. Here are a few reasons!

● You work with a random supplier.

Choosing random suppliers means an open invitation to Chinese scammers. There are numerous scammers in a crowd of suppliers. You must know about your supplier before starting your first job.

● No verification occurs

Another big problem is the lack of verification. Most buyers often choose unverified suppliers on supplier directories such as Alibaba or DHGate. Therefore, the scams might occur.

● You don’t check on suppliers.

Talking to suppliers highlights whether the supplier is professional or not. Improper verification also causes serious concerns, such as scams.

● Fake companies with fake certificates

Some companies generate duplicate certificates and trick you into a verified one. The laziness to verify causes trouble and puts into the scams.

 

8. What to do when a scam has occurred?

Suppose you have worked with a scammer. Now, you want your money back. What will you do?

Here are a few steps to maximize your chances of getting funds back.

● Gather all necessary information.

Get all the necessary information. The essential documents might include:

• Contract terms
• Receipts
• Communication
• Relevant documentation

Bring all the essential tools to prove yourself right.

● Talk to a supplier on a platform if possible.

If you are working on Alibaba, first talk to suppliers directly. For example, you set an AQL at 2%. Now it has reached 5%. Negotiate and get compensation or revision for your products.

● Create a dispute on Alibaba or other platforms.

What to do if your supplier doesn’t agree with the refund or revision? Simple. Open a dispute. Provide all the proofs to the Alibaba team and let them settle the deal. After thorough research, they will decide the case in your favor.

● Report authorities

You can also take legal action. Talk to local Chinese authorities. Go to the police and expect better responses from the officials.

● Take legal advice

An attorney can be a good option if you don’t know what to do with your money. Reserve some time and talk to your attorney. Get legal help to settle down the dust.

● Use meditation services

Trade organizations offer meditation services. Sometimes, the Chamber of Commerce is ready to provide this service. Connect with all the mediation services and optimize your chances for refunds.

● Get back your money.

Once you have used 100% of your efforts, you can return your money through official sources. You’ll feel safer and ready to knock out all the Chinese scammers.

 

9. Ten Tips to Avoid Scams when Sourcing from China

We have curated some of the top ways to avoid scams when sourcing. Keep an eye on that!

Filter out suppliers on Alibaba.

If you are working on Alibaba, narrow your research to verified suppliers. Alibaba nurtures gold suppliers, too. Better work with them.

Verify your suppliers.

Get a location and use the third-party verification services for supplier verification. Use online sources to confirm the authenticity of the supplier, too.

Check legal registration.

Legal registration ensures the supplier has verifications with the government. Get the license and check it on the government websites. Validate the authenticity.

Inspect factories.

Factory inspection is the best idea you can ever try. But it is not an easy step. You have to visit the factories and test their equipment manually. Monitoring their production processes can be a hassle, too.

Get product samples.

Suppliers are ready to feature the samples. Get them and test the quality. Use lab testing methods to ensure the products are safe and effective.

Use sourcing agents.

The best method to use is to contact the sourcing agents. They are companies or individuals who know the local market. That can get you a safe entry into the market and work with reliable manufacturers. Moreover, agents also have contacts with top suppliers.

Avoid luring costs.

Some suppliers offer meager costs. Avoid that! Meager prices can be attractive but pose the risks of scams. Therefore, choosing fair prices is better than scamming costs.

Pay through safe payment options.

Use the Alibaba Trade assurance program and release payments once you know the quality. You can try other payment options like escrow or PayPal. All such methods offer good security.

Set up legal contracts.

Get a seamless experience with legal contracts. Avoid the hurdles on the way with the right terms and conditions. If the Chinese scammers try to scam you, you’ll still be on the safe side.

Negotiate prices

Finally, you can negotiate the costs and reduce the overall prices. It will elevate your profit margins and boost your business.