If you are a company in the United States, how can you trust that the money you send to a Chinese company will result in that company honestly sending you the purchased products?
Many foreign buyers are wary of buying products from Chinese companies because suppliers are sometime apt to abscond with the funds or send back sub-par goods.
But Chinese e-commerce firm Alibaba.com now has an upgrade to its Trade Assurance program, a free service designed to give businesses peace of mind when buying from overseas suppliers.
With the upgrade, buyers who make purchases from qualified Alibaba.com suppliers will be entitled to up to a full refund of their deposits or order amounts should suppliers fail to meet the shipping times or product quality specified in contracts. Coverage has been extended to post delivery, meaning buyers are now entitled to full refunds in relevant transactions if they spot quality problems after receiving orders.
To help make it easier for small businesses to identify reliable trading partners, Alibaba.com suppliers who qualify for the Trade Assurance program can display a Trade Assurance icon on their Alibaba.com virtual storefronts. To further improve transparency, storefronts will also display the total number of relevant transactions and total value of relevant deals completed over the previous 12 months. In addition, Alibaba.com will show how often and how quickly qualified suppliers responded to their own customers.
Trade Assurance is immediately available to all of Alibaba.com's millions of global buyers trading with Chinese suppliers, and it will be available for non-Chinese suppliers to participate in the coming months. Participation in the Trade Assurance program is voluntary for suppliers.
Alibaba.com says it uses data analytics to assess suppliers' past performance and trading histories over six-month periods to determine who can join. Every qualified supplier is assigned a Trade Assurance Amount, which will be used to cover the buyer's loss in the event of the supplier's breach of the purchase contract.