Comments on: China-U.S. Trade http://www.driftreality.com/china-us-trade/ Wed, 08 Feb 2012 10:08:47 +0000 http://wordpress.org/?v=2.5.1 By: dan http://www.driftreality.com/china-us-trade/#comment-4578 dan Sat, 31 May 2008 18:40:59 +0000 http://www.driftreality.com/miscellaneous/china-us-trade/#comment-4578 To be fair, cash on delivery is standard when buying from China (at least in the industries I know). Many times you will also need to pay a 30% deposit before they even start production, with the remainder before shipping. Perhaps after a long relationship, credit may be given. Chinese factories have been burned way too often when giving credit, and their extremely low margins cannot support the risk. Consider a European factory (or distribution), where margins of 40% are considered low, and you will often see margins of over 100%. Chinese factories often have 5% or 10% margins. At 100% margins if a customer doesn't pay, one additional equivalent sale will recoup the loss. At a 10% margin you need 10 equivalent sales. Now regarding samples, shipping from China might cost $50 or $100 or more, depending on weight. Imagine a Chinese factory that makes flash memory mp3 players, and are offering samples to potential buyers. Many people will say yes to a sample even if they have no intention of buying; they just want some free stuff. Someone serious about buying will have no problem paying the shipping. Likewise, if you are an established customer, or are known as a serious company, the factory will have no trouble paying for the shipping. BTW if your friend used his own freight forwarder to arrange the delivery, he should have known the terms were COD the moment his agent picked up the goods. It is very unlikely the COD was for cost of the item. I don't think freight forwarders (or any shipping company) will want to get involved in collecting money. It is a hassle without any benefit at all. It means the sender has to invoice the shipper, who then invoices the recipient. There is no benefit for the shipper to do this, and it just doesn't happen with international shipping (afaik). If the Chinese arranged the shipment with their agent, and your friend agreed to pay for the shipping, he would not have had a credit account with the shipping agent, and hence would have been expected to pay for the shipping cost on delivery, directly to the shipper. It would have worked out better for your friend too, since he was paying the true shipping cost (not a marked up cost). It sounds like your friend misunderstood what the payment was for, and rejected the item hastily. And you wonder why the Chinese guy was angry. His samples were probably destroyed, because it probably wasn't worth having them shipped back. And he probably also got stuck having to pay for the shipping cost to Arizona as well. While I don't agree with the death threat (even those clearly without intention behind them), it seems your friend acted like a jerk, and (probably) unintentionally ripped off the Chinese company. To be fair, cash on delivery is standard when buying from China (at least in the industries I know). Many times you will also need to pay a 30% deposit before they even start production, with the remainder before shipping. Perhaps after a long relationship, credit may be given. Chinese factories have been burned way too often when giving credit, and their extremely low margins cannot support the risk.

Consider a European factory (or distribution), where margins of 40% are considered low, and you will often see margins of over 100%. Chinese factories often have 5% or 10% margins.

At 100% margins if a customer doesn’t pay, one additional equivalent sale will recoup the loss. At a 10% margin you need 10 equivalent sales.

Now regarding samples, shipping from China might cost $50 or $100 or more, depending on weight. Imagine a Chinese factory that makes flash memory mp3 players, and are offering samples to potential buyers. Many people will say yes to a sample even if they have no intention of buying; they just want some free stuff. Someone serious about buying will have no problem paying the shipping. Likewise, if you are an established customer, or are known as a serious company, the factory will have no trouble paying for the shipping.

BTW if your friend used his own freight forwarder to arrange the delivery, he should have known the terms were COD the moment his agent picked up the goods.

It is very unlikely the COD was for cost of the item. I don’t think freight forwarders (or any shipping company) will want to get involved in collecting money. It is a hassle without any benefit at all. It means the sender has to invoice the shipper, who then invoices the recipient. There is no benefit for the shipper to do this, and it just doesn’t happen with international shipping (afaik).

If the Chinese arranged the shipment with their agent, and your friend agreed to pay for the shipping, he would not have had a credit account with the shipping agent, and hence would have been expected to pay for the shipping cost on delivery, directly to the shipper. It would have worked out better for your friend too, since he was paying the true shipping cost (not a marked up cost).

It sounds like your friend misunderstood what the payment was for, and rejected the item hastily.

And you wonder why the Chinese guy was angry. His samples were probably destroyed, because it probably wasn’t worth having them shipped back. And he probably also got stuck having to pay for the shipping cost to Arizona as well.

While I don’t agree with the death threat (even those clearly without intention behind them), it seems your friend acted like a jerk, and (probably) unintentionally ripped off the Chinese company.

]]> By: driftreality http://www.driftreality.com/china-us-trade/#comment-3653 driftreality Sat, 02 Feb 2008 19:33:10 +0000 http://www.driftreality.com/miscellaneous/china-us-trade/#comment-3653 Personally I can't wait to get my bule colored water going... Personally I can’t wait to get my bule colored water going…

]]> By: Babel http://www.driftreality.com/china-us-trade/#comment-3637 Babel Fri, 01 Feb 2008 08:12:13 +0000 http://www.driftreality.com/miscellaneous/china-us-trade/#comment-3637 Hopefully they don't use Craiglist's to advertise for a killer. Hopefully they don’t use Craiglist’s to advertise for a killer.

]]> By: Dodd http://www.driftreality.com/china-us-trade/#comment-3634 Dodd Thu, 31 Jan 2008 18:42:24 +0000 http://www.driftreality.com/miscellaneous/china-us-trade/#comment-3634 I didn't realize "washing in the same bule colored water that swirls aroud the toilet bowel" could actually be a value proposition. I'm constantly tempted to wash up in the toilet bowl. I didn’t realize “washing in the same bule colored water that swirls aroud the toilet bowel” could actually be a value proposition.

I’m constantly tempted to wash up in the toilet bowl.

]]> By: driftreality http://www.driftreality.com/china-us-trade/#comment-3551 driftreality Fri, 25 Jan 2008 17:15:46 +0000 http://www.driftreality.com/miscellaneous/china-us-trade/#comment-3551 Hehe - what if you could have a party in your faucet? Hehe - what if you could have a party in your faucet?

]]> By: Poem http://www.driftreality.com/china-us-trade/#comment-3545 Poem Thu, 24 Jan 2008 20:23:45 +0000 http://www.driftreality.com/miscellaneous/china-us-trade/#comment-3545 I've always wanted to take a shower in LEAD - I mean LED - lights. I’ve always wanted to take a shower in LEAD - I mean LED - lights.

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