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The One Time China Product Purchase. Please Don’t.

Posted in China Business

I am tired of feeling bad for people/companies who call or email me to say that they just bought this or that from China and they did not receive it or what they received is not even close to what they ordered and paid for.  Happened to me twice yesterday:

  • Restaurant owner in the Midwest bought two kitchen machines from China for about $15,000 for the two of them.  Why?  Because according to him, the same machines cost around $30,000 each in the United States.  The machines he received did not work at all.  Not at all.  Neither of them.  His requests to the seller to fix them or to accept a return were completely ignored and he wanted to know what my law firm could do to help.  I told him pretty much nothing other than to write a letter in Chinese threatening to sue the offending company in China, which letter would almost certainly be ignored.  He asked about suing in China and I told him that to do so, he would need to find a Chinese lawyer to take the case in the somewhat remote city in which the Chinese company is based and then he would need to pay that lawyer, along with the court filing fees, and who is to say that he would win in any event?  And then if he does win, how will he actually collect on the judgment?  He asked whether there is some sort of law in China mandating that companies accept returns.  I told him that I was not aware of such a law, but that even if there were such a law, why should his Chinese manufacturer follow it? We ended the conversation with him saying that it would have been cheaper in the long run for him to have just bought the machines in the United States and with my agreeing with him.
  • Retailer in the Midwest (pure coincidence) bought $23,000 of allegedly ceramic dish-ware, only half of which ever came and all of which was low grade plastic.  Again, I had to tell the caller that it would not make sense to pay my firm anything to assist in what would almost certainly be a fruitless exercise.  This person ended the call by saying she would never buy from China again.  My reaction to that was to remain silent.

If you are going to be doing a one-time China product purchase (really not just from China, but from anywhere) without due diligence and a contract, you should know that what happened to these two companies could very well happen to you and that your recourse will be limited, at best.  And if you are going to be doing a one time product purchase from China of an amount that does not warrant your engaging in at least some due diligence regarding your seller and/or in having an enforceable contract drafted, well then maybe you should reconsider.

Cause if the deal goes bad and you call me, I won’t have much to tell you.

Just saying….

  • xnpu

    It’s hard to imagine why someone who’s about to save 30K doesn’t spend a small fraction of that on getting some solid advice.

  • http://www.qualityinspection.org/ Renaud Anjoran

    I bet they found their suppliers on Alibaba. And, in the end, they blame “China”.
    Who is responsible for their loss? I would say, the purchaser (for not trying to learn about what is needed when buying from China) AND Alibaba (which makes is look easy and safe to buy from China).
    When one signs up for a financial product, he has to acknowledge all sorts of caution warnings. Those using Alibaba should be subject to the same treatment!

  • Martin Jones

    It still intrigues me how some foreigners think that doing businesss in
    China is the same as doing business in the USA or Europe. I lived in
    Shanghai for 3 years and almost every week, I learned valuable lessons.
    Paramount are the need to do your background checks, be thoroughly
    prepared and learn to roll with the unexpected, the completely
    unexpected and the “where the h.ll did that come from” unexpected. Black
    Swan events are not rare in China!

  • China Newz

    Interesting post. Buyer beware, as cheap prices from China lure you into to doing business and then look what happens. Imagine that because of the internet many businesses may be tempted to purchase Chinese goods like this case. This is a hard lesson and glad you shared it in your blog.

  • Guillaume

    For once, I do not fully agree. There may be one thing one can do. If the purchase has been made on a website like Alibaba, it is a good idea to add comments warning of the fraud on the guy’s page. It would actually have been a good idea to scrutinize the previous reviews before shopping. On Taobao, the guys are really going to do whatever you want for you to remove a negative review, I have seen it with my eyes.

    I guess for a $10 000 asset, the fraudster will close account and change place, but for a more mundane amount, for some clothes or some electronics, the Taobao shop owners really worship their reputation and rarely engage in frauds.

    • KevinC

      I agree. Although, I’m not sure about Alibaba, but on TaoBao many people who covet their positive rating are usually individual sellers – and thus the TaoBao account is tied to their ID. I have run across many people who will open additional accounts with their mother, father, friend or cousin’s ID to deal with bad past ratings.

      I imagine Chinese businesses wouldn’t hesitate in doing the same provided it is even possible with Alibaba.

      In the long run though, I think it all comes down to the fact that the cheap way isn’t always the best way. As the Chinese say – 便宜没有好货

  • nathan

    While it certainly is naive to purchase from China without any experience it’s hardly the buyer’s fault that they were defrauded by dishonest and incorrigible suppliers. Fool me twice and all that but if you’re a fraudster I hope you get what’s coming to you.

  • master-yoda

    What I have learned from the Chinese. The LEASTexpensive item ever purchased, ends up being the MOST expensive item ever purchased. WHy? 9 times out of 10, the item will never be used and rendered “junk”.