Hi,
One of my Chinese suppliers (a factory that I’ve worked with since 2017) told me that they would charge me storage fee for leaving inventory at their factory for too long (one year) due to slow sales in the US. I’ve always produced more and they agreed to store left over for free at their factory since 2017. Yesterday I shipped the last batch of one product and didn’t place a new order. Once they learned that I have no intention of producing more, they tried to charge me extra. 
Yep, I’m pissed. I’ve been their good client and paid them good money for years. Anyhow I have about $7000 worth of inventory with them that have retail price of about $18000. Even though this product is not selling well and I plan to discontinue, I would like to sell all inventory to get my initial investment back. I have Alibaba Trade Assurance with this order. Not sure how much help Alibaba would be in this case. Any advise? Thanks.
Did you already pay for the $7k of inventory?
If not, walk away. If so, how much of a storage fee are they going to charge?
I do not have advice about your situation, but be very careful that the communication you received is from your contact at the factory/supplier.
Double check the email address very carefully.
I have a horror story about a final payment to release a container that was an accidental payment to the wrong factory from a tricky scam email. I feel like it happens to every company eventually.
-
Yikes
-
Honestly, if you’re not ordering more from them they are disincentivized to do you favors at their cost
-
I would work out a nominal storage fee with them or let go of the inventory, which from my top line guess is not worth the hassle of selling for the costs you would have to incur
-
It is really not their job to store stuff for you and just because they have doesn’t mean they must - this is not good business for them and from their perspective, they’re carrying a burden which is not theirs.
Finally, I would never use Alibaba as a source - that adds an extra layer of complication as most of these companies are not factories themselves and thus the extra layer of complication.
Best,
T_T
As @Pepper_Thine_Angus notes, you can walk away if you haven’t paid for it BUT be prepared for them to undercut your pricing by 50% and sell the items themselves!
Only one of the reasons I can’t see myself ever dealing with any manufacturers from there.
Yes I paid in full a year ago. They haven’t told me how much they’re going to charge yet.
Thanks. This is the real salesperson who I have dealt with. He sent messages through WeChat.
Find out how much. If you hadn’t told them it was the last order they may not have charged a storage fee but it is what it is
True. However they told me from the beginning that they would keep inventory for free to incentivize me to place larger order and not worrying about storing.
If they had told me this from the beginning, I would have not produced so many. We agreed on free storage. It’s wrong for them to charge extra after learning they aren’t going to make more profit from me. At least they could tell me to ship everything out. I’m ok with that. But to hold inventory hostage for the storage fee is completely wrong.
Thanks for the forewarning. I’m considering getting Alibaba involved to see what they can do.
Frankly I’m afraid to ask them because asking means that I would accept their practice of charging storage fee. I wonder what kind of threat can I make to convince them to just release my inventory. I know that Chinese stores really care about scores on Alibaba. I once had another supplier who beg me to cancel the order because they were so late and that would hurt their Alibaba score. It seemed like Alibaba has a tight grip on Chinese factories just like Amazon has a tight grip on sellers.
I should add that the left over inventory is NOT selling well on Amazon. Only 1.5 units a day. They are holding 730 units hostage at their factory. That would take 486 days to sell (730/1.5) if the sales volume doesn’t drop further. With Amazon increasing fees left and right, I’m basically selling at breakeven just trying to get the initial investment back… Hmm 
I mean you can try the trade assurance, but I’m sure something shipped a year ago when you ordered so you may have no recourse here
I’m good at asking the toxic questions, but are you even attempting to sell on other sites and/or doing FBM instead of only being a cow for Amazon to milk?
Thanks for your follow up. I just did it. I chatted with Alibaba customer service and gave them the order number. They agreed with me that the supplier cannot ask for extra storage fee because it was never agreed upon. They are contacting the supplier to ask them to release my inventory. This is a very good sign. It worth the extra 2% that we’re paying for Alibaba TA order. I’ll be waiting for the response from the supplier and hopefully just ship everything out of their factory.
Again, forecasting is not the manufacturers job. If they promised the Golden Gate bridge, it doesn’t mean they can deliver. I understand that you feel like they’re breaching an agreement, but from their pov they are not - China is wild, but one of the many reasons not to assume anything unless you have a written purchase agreement with them that explicitly states this - you may use Trade Assurance (I guess). That is what I’m saying. And at this point, there is nothing but two options. Negotiate a storage fee that is nominal and reasonable or use it as a sunk cost. My guess is, the inventory hasn’t been paid for in full?
My supplier, made fab investments because of the volume of the business I was giving them; and I had negotiated a rate which was highly competitive - they have no recovered their investment (whether true or not is irrelevant). These things happen - there was an agreement on my part to send them volume, but that wasn’t investment advice on their operation - now I’ve obviously placated my partners there because I value our relationship and it’s just good business/ethics. But many things are left unsaid - the world over - but especially in China. They are not being deceptive as far as I can see thus far from their POV.
You’re right. I should do more. I only sell this item on Amazon and Walmart. What other channels would you recommend? 
Depends on the item/category (I am not asking you to out yourself!)
ebay, facebook marketplace, etsy.
Yes we do have a 15 page purchase agreement (that I wrote it myself) for every single order that details everything. They have to upload it to our TA order every time.
You guess right. I paid for the order in full.
Good news. I asked for help from Alibaba. After reviewing the order and our purchase order. The Alibaba Chinese employee agreed that the supplier cannot just add the storage fee. She’s sending a message to the supplier to ask them to perform as agreed in PO and release my inventory. Frankly, with the help from Alibaba, I’m feeling much better now because I know how much power Alibaba has over these Chinese suppliers.
Thanks for your follow anyway
Thanks. What about Google Marketplace?