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    Case Study 1 – Sandbag Scam

    This is a story of an Australian Company receiving a container load of sandbags instead of the copper wire they ordered from China. with 8 lessons learned. Summarized by lindy chen from ChinaDirect Sourcing Services.

    There are many opportunities to be had in China, and these opportunities can make a Company and/or yourself a lot of money; yet where there are opportunities, there are those looking to take advantage of the situation, read till the end to find out what you can do to avoid this situation.

    In May 2019, it was Sam’s first time to import a large number of copper wires from China with an order valued at US$35,000. Sam found the Chinese supplier (A Trading Company) from Alibaba.com and sent a representative to visit the supplier in China. After visiting the supplier, Sam signed a Purchasing Agreement and made an initial 15% deposit to the supplier.

    Sam and the Chinese supplier signed a purchasing agreement, yet the price was a CIF price, which means the supplier will organise the China Customs Clearance and shipping. The purchasing agreement also states that the supplier will arrange their own product inspection, which is a Red Flag.

    Two weeks after Sam made the second 15% deposit, the supplier stated they still haven’t received the money. While Sam was trying to sort out with his bank to trace the seemingly missing money, the supplier suddenly informed Sam that they have already shipped the container and it will arrive in Australian soon.

    Note: This is very unusual as they shipped the goods before receiving the 30% deposit in full.

    The supplier provided two certificates – Quantity and Quality certificates from the Chinese Customs. These two certificates were the only things for the client to decide whether to make the balance payment or not. With such a rush processing created by the supplier, Sam decided to make the payment.

    The shipping container arrives in Australia, Sam opens the container and finds out it is full of sandbags.

    what’s the lesson learned here?

    Paul – FS Concierge
    • Total posts: 3,120

    Hi And Welcome to Flying Solo @lindy,chen. It is great to have you!

    Thank you for joining our community and posting.


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