safe and secure Outsourcing to INDIA and CHINA

Here is the situation. We will be having a small flashlight produced off shore - probably in india or china. The total value of the transaction is about $15,000. The company in india or china basically machines all the parts, assembles the components and packages the lights then sends it to the U.S where it is distributed. Now my question is how can we secure the transaction where the external company doesn't get paid until we get the lights in the right quality and quantity. Is there some sort of a neutral person to whom we can pay the money and this person is releasing the money only after the quality of the product has been confirmed. I am looking to have the following questions answered: 1) How can I secure the transaction? 2) Links to companies and parties who offer such a service? 3) Estimate on how much this would cost... ballpark range is ok.

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Subject: Re: We want a product produced in china - how to secure transaction? Answered By: hummer-ga on 27 Oct 2005 07:53 PDT Rated:

Hi mobile1, 1) How can I secure the transaction? You will use a Letter of Credit (L/C) between your bank and the supplier's bank. In this way, the money will be held in escrow until all of the terms of the L/C have been met. One of the conditions you will include in the letter is a pre-shipment inspection. >> Tips and How-Tos regarding importation FOREIGN AFFAIRS Sourcing Overseas Could Help Your Company Reduce Costs and Stay Competitive in Today?s Economy We?ve Got 10 Essential Steps to Get Your Started. By Craig R. Moss Step #10: Arrange A Payment Method "As the buyer, you don?t want to release the money until you know that you?re getting what you ordered. Sounds reasonable, doesn't it? Now put yourself in the supplier?s shoes. You don?t want to release the goods until you know you?re going to get paid. International trade is full of horror stories from both ends. If you think arranging payment is hard now, imagine what it was like before e-mail and air courier. Over the hundreds of years that international trading has gone on, banks have historically acted as the trusted intermediaries between the two parties. Banks use the Letter of Credit (L/C) for this purpose. The official definition of an L/C is ?a written commitment on behalf of an importer (buyer) to pay an exporter (seller) against presentation of documents that comply exactly with the terms and conditions of the agreement.? When you place the order, your bank opens an L/C to the supplier?s bank. The money is held in escrow until you take possession of, and approve of, the products. Then the money is released to the supplier?s bank. One tip: You may want to include a pre-shipment inspection as a condition of the L/C. As the relationship with the supplier grows and trust is established, many companies chose to wire transfer payments and eliminate the L/C." http://www.sba.gov/library/successXV/14foreignaffairs.htm 10 Tips for Safe Trading Use Pre-Shipment Inspection Services "If you are a buyer, you can protect yourself against poor quality by ordering a pre-shipment inspection of the products. You can demand the inspection as a condition to payment." Protect Yourself Against Payment Risk-You Are the Buyer "If you are a buyer, sometimes a supplier may ask you for a deposit (usually 30%) before he accepts the order. While this is not unusual between long-standing trading partners, if you are doing business with the supplier for the first time, make sure you have done sufficient background checks on the supplier before you agree to the deposit, or ask for a different form of payment, such as a letter of credit. If the seller seems more focused on payment than any other issue, or indicates that cash payment must be made urgently, more caution should be given to the transaction. Be extra cautious when the seller asks you to send money to an account whose real owner cannot be traced; for example, you cannot trace the real name of the person behind an account with a wiring service such as Western Union." http://www.alibaba.com/trade/servlet/page/static/safetrade/tips Some Basic Importing Cautions & Guidelines http://www.krtinspect.com/importcautions.htm How can I enjoy greater security when contacting potential business partners? "For greater security, we suggest that you can adopt the following measures when contacting potential business partners through the Internet 1. Call the telephone and fax numbers provided in the company's website posting to check that they are genuine. 2. Check with the registrar of business in the country or territory that the other party claims to be from, to insure that the business is legitimate and licensed to operate... 3. Use an external inspection service to insure that the products meet your requirements. 4. Pay for a sample before purchasing in bulk. 5. Be guided by your instinct... 6. Meet Your Partner in Person... 7. Confirm Contact Details... 8. Protect Yourself When Ordering or Providing Samples... 9. Use Pre-Shipment Inspection Services : If you are a buyer, you can protect yourself against poor quality by ordering a pre-shipment inspection of the products. You can demand the inspection as a condition to payment. 10. Protect Yourself Against Payment Risk-You Are the Seller... 11. Protect Yourself Against Payment Risk-You Are the Buyer : If you are a buyer, sometimes a supplier may ask you for a deposit (usually 30%) before he accepts the order. While this is not unusual between long-standing trading partners, if you are doing business with the supplier for the first time, make sure you have done sufficient background checks on the supplier before you agree to the deposit, or ask for a different form of payment, such as a letter of credit i.e. SecureLC. If the seller seems more focused on payment than any other issue, or indicates that cash payment must be made urgently, more caution should be given to the transaction. Be extra cautious when the seller asks you to send money to an account whose real owner cannot be traced; for example, you cannot trace the real name of the person behind an account with a wiring service such as Western Union. 12. Suspect Shipping or Contact Addresses... 13. Beware of Fake E-mail Addresses..." http://www.exportbureau.com/export_fraud.html Product Inspection http://www.export911.com/e911/purch/docINSP.htm Tips: How to Avoid Fraud http://www.made-in-china.com/tradeservice/additional/?for=trade_fraud 2) Links to companies and parties who offer such a service? >> Inspection Services KRT Inspection "Experiencing these problems with your China-originating shipments? If so, KRT pre-shipment inspection services are guaranteed to minimize defect rates and maximize shipment quality! And it's all 100% guaranteed by KRT, the only North American shipment inspection agency entirely focused on China shipment inspection." "Most KRT-serviced China inspection locations just $295/day" http://www.krtinspect.com/ "BUYINSPECT China specializes in supplier quality inspection in China, source inspection in China and pre-delivery inspection services in China and has offices and operation units in Shenzhen, Guangzhou, Zhuhai, Qingtao, Shanghai, Nanjing, Wuxi, Changzhou, Hangzhou, Ningbo,Swatow, Fuzhou plus many others." http://www.buyinspect.com/inspection.htm Hong Kong East Inspection Co. We offer a fixed rate of 258 USD per man/day (all included) for standard inspection. http://www.eastinspection.com/ Hong Kong Q.C. Center http://www.hkqcc.com/services.html BridgeNova Inspection Services http://www.bn-inspection.com/ SGS Inspections http://www.us.sgs.com/technical_inspections?serviceId=28169&lobId=16703 Pro QC International http://www.proqc.com/index.shtml 3) Estimate on how much this would cost... ballpark range is ok. About $300 per day, give or take. >> Additional Links of Interest: Escrow These companies handle the documentation and money transfer but do not perform inspection of the goods. "SecureLC holds the invoice total in a secure escrow account on behalf of the buyer and issues the seller with a Secure LC which is paid once the goods have been shipped." http://www.securelc.com/overview.html Escrow.com https://www.escrow.com/index.asp I hope this helps. If you have any questions, please post a clarification request and wait for me to respond before closing/rating my answer. Thank you, hummer Google Search Terms Used (in various combinations): import "pre-shipment inspection" china escrow l/c "letter of credit" secure invoice inspection importation goods

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