How to send Money to Chinese Factories ASK NILS EPS02

July 16, 2017 No comments exist
  • Why “secure” payments are important

  • Why you need to make a QC every time you order


    How to avoid expenses and hassle



Nils will answer a question from Nicolas (he used the contact form at to ask this question) regarding a supplier that only accepts bank payments and doesn’t want to use Alibaba or PayPal.

(01:00) It’s important that your buyer accepts secure payments, such as Alibaba or PayPal. If there’s a conflict with your order, such as quantity or quality, or any other conflict, there’s a way you can get your money back. This is necessary to place your first order.

If you’re working with that supplier long enough to trust them, you can perhaps move off Alibaba and pay through PayPal, but you still need that security.

(02:10) Get an agent to find a factory that accepts your terms. Ask your factory the issue for not accepting PayPal. They have to pay a higher fee when using PayPal. Tell them you’ll pay with PayPal or AliPay and that you’ll cover the fee, at least for the first order. If they disagree, move on.

If you and your agent cannot find a better supplier, you can hire an inspection company to have a look at the factory to see how it works and investigate if there were past issues. That reduces some of the risk when paying with bank transfer.

(03:35) Never send the full payment. The down payment is usually 30 percent to start production. After you clear the 70 percent payment, the factory ships your goods. If you’re not sure they did a good job (especially if it’s the first order), hire the same inspection company again to check your order to look at your produced goods. This is necessary if you’re shipping directly into Amazon FBA.

(04:40) Imagine if you made some Amazon sales and many reviews came in saying the product sucks. You’ll have to get the product out and pay for the shipping back. This is not only a hassle but also expensive.

It’s up to you if you decide to source from another country, find another factory, or simply accept the risk in that first order.

If you have any other questions, go to to send a text message or voice message. Next time, we’ll cover what to do if your factory decides to change their terms: raise their rates or skip quality control, for example.

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