# Buying and paying for goods purchased in Asia



## Moirad (5 Nov 2011)

Am starting small online business and am ordering stock in Asia. What is the safest and simplest way to pay for goods abroad, and online. Also best way for me to get paid when I sell.  Thanks  Moirad


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## Rudolf289 (6 Nov 2011)

*Ordering products in the Far East*

Hello Moirad,

If this is your first time ordering products from the Far East, you are likely to find that your supplier(s) will demand either of two scenarios. 1) 100% payment at time of order or 2) 30% downpayment at time of order with the balance due at time of shipment.

Generally speaking you should be able to do a bank transfer to your supplier. For smaller quantities you may be able to pay by paypall or credit card. I would not under any circumstances use Western Union.

A few general comments when doing business in the Far East ;

1) Make sure you research your supplier. Ask for references of companies your supplier is doing business with in the UK or Europe. Follow up on those references to try and establish the reliability of your supplier. Another option is   to talk to specialist companies that source products on behalf of  Irish  clients in the Far East. They could do background checks on your  prospective  suppliers and perform pre-shipment inspections in the  factory
2) Take charge of the shipping process. Check the cost of shipping by   contacting freight forwarders based in Ireland who offer services from the Far East. I   have seen horror stories where the shipping was left to the supplier,   who got an unrealistically low rate and where the forreign freight forwarder,   through the agent in Europe / Ireland collected the difference (and then   some) in the form of a socalled "China Import Service Fee" on arrival.   The problem at that stage is that you are committed. You have paid for   the Merchandise, the supplier does a song and dance but claims to be   helpless in all this and you have no choice but to pay up. The principle   "Emptor Caveat" applies.
3) Incoterms ; When negotiating an international sales contract, both  parties need to pay as much attention to the terms of sale as to the  sales price. To make it as clear as possible, an international set of  trade terms (INCOTERMS) has been adopted by most countries that defines  exactly the responsibilities and risks of both the buyer and seller  including while the merchandise is in transit.     Devised and published  by the International Chamber of Commerce, Incoterms are at the heart of  world trade. Among the best known are EXW (Ex works), FOB (Free on  Board), CIF (Cost, Insurance and Freight), DDU (Delivered Duty Unpaid),  and CPT (Carriage Paid To). ICC introduced the first version of  Incoterms - short for "International Commercial Terms" - in 1936. Since  then, ICC expert lawyers and trade practitioners have updated them seven  times to keep pace with the development of international trade. 
4) Marine Cargo insurance is often a forgotton / overlooked aspect. A   lot of shippers and consignees assume that the carrier - since they are   in charge of the goods during the shipping process - has the obligation   to make good losses in case of damage or theft or total loss. Under   International conventions (such as the Hague Visby rules, soon to be   replaced by the Rotterdam rules) the carriers can (and will) rely on   limitation and exclusion clauses as part of the terms and conditions   they impose through the shipping contract (Bill of Lading). Even if they   have to accept liability, their maximum liability is often only a  small  fraction of the actual value of the goods. Make sure that General  Average is included in the policy you take out.

Feel free to contact me or post again if you need any further assistance.

Best regards,
Rudolf289


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## Purple (6 Nov 2011)

Great post from Rudolf289.
I would add that if you are having custom parts made in China you can expect your supplier to try to increase the price a couple of times after you have agreed it and sent a purchase order/ signed a contract.


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## Moirad (7 Nov 2011)

Thanks Rudolf289, Thats a very helpful answer. Am also looking at Pakistan, so I presume the same rules apply.  In Pakistan they told me Paypal dosen't work too good, and suggested Payoneer as a method of payment. When I looked it up, my "McAfee" site advisor flashed up a full page warning, so probably bank transfer is the safest.  Thanks for your help, and I'm sure i'll need more advice soon,
Regards, Moirad


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## Moirad (7 Nov 2011)

Thanks for the advice Purple,   Regards,  Moirad


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## larry duff (20 Dec 2011)

Question guys I'm an unvat-registered company for the time being, 
I'm buying in some sample goods from China coming to around 650 euro any idea what vat/ excise or other I will have to pay.

Ultimately I will probably vat register its just early days


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## Niall (20 Jan 2012)

We import from China, from waht you have detailed, i would give the following advice:

Finance - you will have to pay Vat and Duty at the point of entry usually 23% of the value of the goods.
Freight - is expensive - generally maybe of use to get your supplier to provide pricing first for freight to Dublin etc.
Customs - do check packaging etc - so this may cause delays.
Alibaba and Tradekey are generally good for searching for companies.
Get references for customers in other countries - get websites - as this may also give you ideas for new business oppurtunities.
Be extremely careful about quality - or use of paints etc - as there have been problems with toxins etc

This is not to put you off...the main thing is that you will not get everything right the 1st time out....Chinese suppliers are generally very good but never give too much info away as they can be the cucko in the nest at times...best of luck

DO NOT pay for goods until you have confirmed yourself that the goods have been shipped.


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## Rudolf289 (22 Jan 2012)

Hello Niall,

If you are importing container loads from outside the EU (e.g. China) your forwarder should be able to structure your imports in such a manner that you don't have the cash outlay for the VAT at point of entry. Instead, it can be deferred to your VAT return where you accrue the liability for the VAT and at the same time claim the deductable input. The nett effect is that you improve your cashflow by not having to outlay 23% and then claim it back in your VAT return. 

I also would urge anybody in Ireland, especially if they import less than container load / groupage quantities, NOT to leave the shipping arrangements to their supplier. I have seen so many people being caught out that way. The supplier in China gets an absolute sweet deal and pays next to nothing for the freight to Dublin. However, the Chinese Forwarder instructs his agents in Europe / Ireland to collect a socalled China Import Service Fee or similarly worded charge. I have found that that charge is often significantly higher than what I would quote for the total transport cost from FOB to door.

Cheers,
Rudolf289


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## Rudolf289 (23 Jan 2012)

Niall, 

one other point is that in my experience a lot of Chinese companies will not ship untill they have received the final payment.

The advice I would give is to do a pre-shipment inspection. There are sourcing companies based in Ireland - with people on the ground in China - that provide those type of services.

Regards,
Rudolf289


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## Rudolf289 (23 Jan 2012)

larry duff said:


> Question guys I'm an unvat-registered company for the time being,
> I'm buying in some sample goods from China coming to around 650 euro any idea what vat/ excise or other I will have to pay.
> 
> Ultimately I will probably vat register its just early days



Hello Larry duff

The duty will be dependent on the commodity. VAT will be charged @ 23%.

Calculation is as follows ;
Duty is charged over the cost of product, plus freight and insurance cost X % duty.
VAT is charged over the above plus the duty

If you are registered for VAT, you can claim the duty paid on import back through your VAT return. Duty is not reclaimable.

Cheers,
Rudolf289


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