What to do when having problems with a Chinese factory while everything is done through Alibaba? Please advise.

Hi,
I’m a private label seller who produces items in China and imports to sell on Amazon (like many people here do). I’ve been working with a Chinese factory in the last 4 years. We’ve had 7 repeat orders manufacturing the same product with different quantity for each repeat order. All orders are done through Alibaba TA, Trade Assurance. TA orders mean that Alibaba helps as the middle man and collecting a small fee in the process. Things have gone well until the last order that just finished around end of the last month. We changed the packaging from brown box to color box to increase its perceive value. It costed me $1200 extra for the upgrade. The production was done. I sent my own inspector to do the inspection. I paid the balance. A few days later, I discovered from the inspection report that the box size was slightly larger than all previous orders. The increased length of the longest side went over 18 inches which would change the item from Standard to Oversize in Amazon term. :expressionless: Luckily I caught this while all items are still at the factory. I confronted the factory for not getting my approval first before slightly enlarging the box and asked them to remake the boxes according to original size. The factory tried to counter that I didn’t tell them that 18 inches was the limit. Their argument was terrible. I knew that they didn’t want to spend around $1200 to make replacement boxes for their mistake. What should I do/say to convince them? One thing I know is that they have to be very careful about how they treat clients on Alibaba platform (just like how we treat customers on Amazon platform). How do I use Alibaba as a leverage to make the factory do the right thing and take care of the wrong size boxes that they made? Please advise. Thanks.

Do you do FBM? Could you meet in the middle, take the boxes, and use the larger ones for FBM, and have them rework to fit the FBA size. Let’s say for $600?

The first thing we do is engineer our packaging, if they do a lot of Amazon work, I am surprised that they don’t know the size limits.

Other than samples, I don’t deal with Alibaba, so I can not provide information on how to leverage them. We buy very few items out of China, and they are raw materials we buy direct and integrate to our products. We do our own packaging here in the US.

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Sorry I forgot to mention that I only do FBA. Thanks for your suggestion.

This is a tough one:

  1. Alibaba really has not control and oversight over China trade companies - which is whom you’re dealing with most likely. Now obviously buyers and sellers have to play nice but you’ll need proof in your PO that you specified size

  2. Working with China is always a specs game. You specify what you need, they sample it, you approve or disapprove and then the process continues - so in theory you would need a spec outlined on your PO that specifies box size in order to win a dispute.

  3. Now obviously, they want your business and you want them to continue supply quality - meaning if you intend to work with them in the future then you may compromise and meet them half way.

  4. Everything we do is outlined in a SOP or description, then agreed to - nothing is left to chance or guesswork - and China is not a business strategist or even able to think on your behalf - their job is to manufacture based on specs that cover A-Z including pantone color codes for insert cards.

  5. I question your sourcing method but that is OT - essentially Alibaba has a considerable markup because you’re using English capable middle men who then source your product - ideally you want your own sources (very difficult to find someone who is reliable and and an expert in their craft since everyone claims to be a sourcer) and those that are take a cut of every order (generally 2.5-5% - everything is negotiable based on volume) - I don’t know if you have the volume to support this yet but you want to go to a local manufacturer who doesn’t speak english and who doesn’t export and you want to pay them in RMB - this is how you source in China (very high level - there are a million things you will have to do to get there including making it worthwhile with volume for the manufacturer and sources - about 5 containers per year to start and then about a container a month). But just some additional thoughts.

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I know nothing of alibaba. But that should not be an issue in this case as you stated that you have done repeat business with this vendor before.

As well there is some context that was not divulged, like the value of this total order and orders prior. That plays into the decision as to your leverage and your value to this vendor. I mean, if this is a $100k order, then $1200 is peanuts, and not worth much thought. In that case, a 50/50 split is well suited as a resolution.

As well as to your ability to find another vendor if this vendor will not do business with you again needs to be considered

Also, you never said that you called out a MAX size for this order. Is it possible that this 18" was never called out, but instead accepted by you back 7 orders ago, because the sample provided was under 18", and you accepted without documenting. As well, did your PO EVER call out the actual box size? I assume not

Also to note, This $1200 represents just the upgrade to Color, but if the job needs to be re-done, then there are other costs of this vendor in the removal and repackaging, and possible damage, on a portion when doing so.

You can stand on principal and demand a re-do, but generally this is the option for those that have leverage. Like if you order $100k per year/per order, or have a name or position in your industry that this vendor is aware of.

I would NEGOTIATE. Your vendor does have an obligation to tell you of any change, but again for me is how materially different was this change. From 17.9" to 18.1" is so small, that His supplier might not have even notified him.

As others mentioned it is a tough call. $1200 to you may be significant, and may not but YOU (at least by what I know), have fault as well by not calling out on your PO what you require

Obvious, I do not need to tell you now, how important that every order you place has all the requirements you need. And that EVERY change to any PO should be sampled and approved PRIOR to production.

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Thank you for your long reply. I appreciate it. I have good news to update :slight_smile: I just notified Alibaba about this problem. 10 min later, their representative from China called me back and we talked in English. Wow I was impressed! I emailed her the pictures and told her the problem. She agreed that the supplier should provide replacement boxes since they were the one who made the wrong size. She will contact the supplier on Monday and let me know the results. I was super happy that Alibaba was on my side. I’ve ordered probably over a hundred factory orders through Alibaba from multiple factories. I know that Alibaba is their overlords (just like Amazon is our overlord :grin: ). I think I’ll hear good news on Monday.

Glad to learn that the trading companies only get a cut of 2.5 - 5%. Frankly I thought their cut would be larger. I agreed with you that finding and ordering directly from Chinese factories is best. However I don’t speak Chinese. I would have to rely on a sourcing agent. Wouldn’t the sourcing agent take a cut just like the trading companies?

Most of my products are source through trading companies. Only a few products that I order directly from the factory because that factory is large enough to employ a salesperson who understand English well. I wish I could find more of such factory.

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Sorry for not explaining it well. $1200 is only the packaging. Even though it’s not a large amount, I would not spend another $1200 to reproduce new packages because the supplier made a mistake.

Everything is spelled out very clear with dozens of pictures of everything from the product itself down to packaging. A factory even borrowed my PO to use as template for their other clients who didn’t have PO. I’m proud of that :slight_smile:

Thanks for reminder. This factory is 1 of the 3 that produce this product for me. I don’t rely on one supplier. It’s too risky. Therefore I’m ok to lose them. I can always find a replacement.

That thought has crossed my mind. Therefore I already mentioned to them that there will be another inspection after this. So, they’ll be more careful.

Agree. Another way to accomplish that is to have a giant (Alibaba) to back me up which I just successfully did (you may read my recent reply to Tried_Tested here). Fingers cross.

Thanks for your reply. Sending the love back to la isla del encanto :upside_down_face:

Unfortunately, you will end up paying. One way or another.

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It didn’t say it was illegal, so it must be ok to make a U Turn on a one way street.

TA via Alibaba is mostly useless, they side with the seller 99% of the time.

Did you ever give them a box size?

Trading companies have a higher margin, probably averaging 30% depending on volume

Sourcers would take 2.5-5% of every order (at least you want to find someone who is incentivized to transmit and relay every possible spec imaginable in the local language and demonstrate sample submissions/revisions and then negotiate - this is a huge skill and most sourcers just suck or are interested in single transactions so it takes some doing to find a guy - then its your own competency that is in question as well - meaning you have to be the conductor in an orchestra and orchestrate the entire supply chain - which is a skill garnered over time).

Local factories don’t export - so essentially they are the one’s selling on 1688 and taobao - there are trade companies there as well that are also on Alibaba - I’m saying go straight to the local who doesn’t care about exports but does have the fab and know how to make what you want - then the gap fill is having a human on your side and having 200% (higher than probability) communication with that person who is then able to transmit and translate every minute detail the local supplier. It’s all semantics until you do it - and that’s when the fun begins.

If you’re simply able to switch suppliers and that doesn’t take a minimum of 6 months of vetting including molds and samples - then that is a shortfall you must explore.

Again all high level.

Hope this helps.
T_T

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Seems to me that if your contract with your supplier was subject to successful inspection, your supplier did not meet the requirements of the contract.

Unfortunately, dealing with a Chinese court will cost more than $1,200 or the costs of oversize and you probably will not win.

Lets hope Alibaba TA is successful. And your inspector did not accept on your behalf without your approval.

This is one of the many reasons that I have been loath to import from any other country. I would be reliant on others who might not always act in my best interests.

It is likely that the box is larger because the raw stock for the box was available in a larger size.

7 orders in 4 years may not be enough to make a customer worth keeping, and I fear this might be the end of a relationship, win or lose.

Really? Is that what you have been experiencing? Do you mind sharing a story?

Of course, we agreed on the entire diagram of the entire box and we have done it repeatedly for 7 previous orders. If I didn’t have this, Alibaba wouldn’t have agreed with me that the seller should correct the box size that they made wrong. The supplier admitted that they increased the box size without my approval.

Yes, that’s really helpful. I know that I currently don’t have the ability to find such sourcers. Hmm… the difference between 30% and 5% is high. I wonder why the sourcers accept a much lower commission. They must have known that other trading companies have 30% profit margin. If I were the sourcer, I would have ask at least 10-15%. Thanks for the info.

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You’re correct. $1200 doesn’t worth anyone times to go to court. Alibaba help is my best bet. Worst case scenario, I’ll pay $1200 again to make the new packaging and that would be the last time I do business with them.

That’s a possibility that I’m willing to take. I’ve got bombarded with offers from many factories that could build this kind of product all the time. It’s not difficult to replace them.

You may be right. If you’re right, at least I would pay them for the last time.

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Because you can see what prices are like on 1688 and taoboa

Which is why the synchronisity between your ability to minutely source is important - you are always the driver for every aspect of your business - the moment you have to defer to an expert entirely - you will be taken for (not by malice, but by the very burden of not being able to do the task for which the professional was hired for).

The reason why all these things tend to fit is because my sourcer and I speak the same language: analytics - everything is done on excel and all specs are provided well in advance down to the carton markings including font size and style

I did the entire line of research for him and he pursued my leads in China and we both went through each supplier in a very detailed, excel intensive process

Start now and within a year, if you’re lucky you will be able to do the same.

Detailed RFQ’s with picture, color, material sheet, measurements — the whole gamut

Glad it all worked out with Alibaba!

All the best!

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HumbeWarrior, you said this was for a color box. Did you check the die lines for your artwork? It’s entirely possible they made your boxes to the dimensions of your artwork. If the die lines were over 18", they would have made the boxes over 18". It would be odd that the factory would have just decided to make the box larger than the die lines.

I’m not trying to blame you but it’s something to look at. It’s possible the factory messed up but it’s just as likely the die lines for your artwork were larger and the packaging factory just made the boxes to your artwork dimensions. You have the same issue either way but it can save you headaches in the future by double checking.

Good Luck,

TJB

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Thanks for your reply. The die lines never changed. I only asked to put color pictures on the box and sent the artwork. The supplier admitted that they increased the size by 1cm because they have known for a long time that the original box size is quite tight. They didn’t know that extended it even only 1cm is enough to trigger the product size classification from standard to oversize :frowning: