Most buyers use Trade Assurance for protection when sourcing products on Alibaba. Alibaba has already explained what Trade Assurance is so I won’t go into detail here. 

However, there are some common issues buyers face when using Trade Assurance but may not find answers on Alibaba. I’m here to break it all down for you.

Is there a trade assurance fee?

Alibaba claims that Trade Assurance service is free for buyers.

For Chinese suppliers from Mainland China, Hong Kong, and Taiwan, the service is free to activate. However, suppliers must pay a transaction fee, typically 2%-3% of each transaction, with a cap of $100-$350. This depends on whether the supplier is using the basic or premium Trade Assurance service.

In practice, most Chinese suppliers on Alibaba support Trade Assurance, but they usually add the 2%-3% fee to the product price, so the buyer ends up paying for it.

What to know when creating a trade assurance order?

If you’re buying ready-to-ship products, you can draft the Trade Assurance order yourself. For customized products, you’ll need to ask the supplier to draft it.

Make sure product details, quality requirements, shipping terms, dispute resolution, etc., are specific and clear in the order system and purchase contract. These can serve as official legal documents in case of any disputes.

Product specifications and quality.

Make your product customization and quality requirements clear in your order contract. If possible, attach design files—especially for complex designs. 

Here are some important points and examples.

Color: For example, instead of saying “red,” use Pantone color 186C. If the color doesn’t match what you ordered, you can easily compare it with the Pantone reference during a dispute.

Size: In the case of a wine tumbler, specify the exact dimensions, like 8.8*8.8*13 cm. This way, suppliers know exactly what to deliver.

Material: State precisely what material you need, like “100% stainless steel”. You can also mention that you’ll have a third party do material testing to ensure quality.

Weight: Specify the exact weight, like “217g,” and include an acceptable weight range, such as “215g-219g.

Quantity: Specify the exact quantity you want for each product style.

Quality: Define how you’ll assess quality issues, referencing the final confirmed sample and third-party inspection results.

Trade Assurance order – uploda contract

Click to enlarge and see the Trade Assurance order–product info.

2. Packaging details

Clearly state packaging material, carton size, labeling requirements, logo design, whether to use a pallet or not, etc.

3. Shipping

Specify shipping methods, dispatch date, trade terms, shipping address, etc. 

trade assurance order--shipping
alibaba tarde assurance order

Six payment methods explained: fees and limits.

For trade assurance orders, you can pay on Alibaba using PayPal, Credit card, Apple Pay
Google Pay, Wire transfer (T/T), and Letters of Credit (L/C).

PayPal, Credit Card, Apple Pay, and Google Pay are common in:

  • Multi-currency transactions
  • Payment processing fee: 2.99% of the transaction amount
  • Payment limit: Up to $12,000 per transaction
  • Processing time: 1-2 hours

PayPal is recommended for orders under $500.

PayPal is generally used for orders under $500. For larger orders, many Chinese suppliers are not willing to accept it because of PayPal’s 180-day refund protection, which some dishonest buyers might exploit to file false claims and chargebacks.

Credit Card: Visa or MasterCard

Credit Card payments are common in practice. However, for large orders, it’s not recommended to use credit cards due to high transaction fees—2.99% of the transaction amount.

T/T is commonly used for large orders.

The transaction fee is not high, usually around USD 40, charged by the remitting bank. There’s no payment limit for T/T, and it supports multiple currencies such as EUR, USD, GBP, and RMB.

Letters of Credit (L/C)

L/C has strict document requirements, and the transaction fees charged by banks are also high. Therefore, L/C is more suitable for large orders rather than small ones. Additionally, L/C is usually not available for high-risk countries like Iran, North Korea, Syria, Cuba, etc.

The payment arrival time for L/C is similar to that of T/T. However, the overall process of L/C takes longer than T/T due to more steps involved. If everything goes smoothly, it typically takes 1-2 weeks for a Sight L/C. For Usance L/C, the process can take longer, usually 1-3 months.

Always check your order’s payment page for the most up-to-date options. Payment methods may change over time and can vary by country or region. For example,

  • Boleto payments are no longer available for Alibaba Trade Assurance orders since September 11, 2023.
  • Western Union is not available for US buyers on orders under $2,500 since June 30, 2023.

Make your payments to the virtual CITIBANK account—automatically created for each Trade Assurance order. Any offline methods can’t protect your payment, and you’ll likely get scammed.

How to control product quality?

No matter the order size, always inspect the products before shipping from China. You can hire third-party quality inspection companies or sourcing companies to inspect the products.

If any issues are found, negotiate solutions with the supplier. If you can’t reach an agreement, the inspection report can serve as evidence to file a dispute on Alibaba, so you won’t be left in a passive position.

How to open a dispute? Full refund?

If, unfortunately, the goods received do not meet the specified requirements, buyers can open a dispute with Alibaba and request a refund within 30 days from the delivery date. This 30-day claim period applies to Level 3 or within buyers. If you’re a Level 4 or 5 buyer, the claim period will be extended to 60 days.  

Once a dispute is submitted, the supplier has 5 days to respond and work towards a solution. If there’s no response, you can escalate the issue to Alibaba’s dispute team. Alibaba will review the evidence from both you and the supplier. Only with powerful evidence can Alibaba judge that the supplier did not comply with contract terms and take full responsibility.

Make sure to keep these important documents as evidence:

  • A signed copy of a purchase contract or invoice.
  • Documents related to the product specifications.
  • Documents related to design drawings or files. 
  • A copy of the inspection report.
  • A copy of all related emails or communication records on Alibaba/WhatsApp (e.g. texts, videos, etc.).
  • A signed copy of the transaction receipt.
  • Any pictures or videos of defective goods.

For buyers, while Trade Assurance offers an extra layer of protection, the key is to work with a reliable supplier.

If you choose the wrong supplier who agrees to use Trade Assurance but ships poor-quality products, even if you eventually get a refund, consider the time spent on resolving the dispute. It could mean an additional 30 days of back-and-forth, disrupting your product sales. And there’s always a chance that you may not get refunded as expected.

open-book  Read More: Alibaba Sourcing Resources (find suppliers, payment, shipping, etc.)

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