I recently received the following letter from a buyer in Ireland who is being abused by her China supplier. As this situation is far from uncommon, in order to help other buyers, I am including key parts below.
(Note: the B/L is the paperwork needed to release the goods into the buyer’s custody at the port of entry.)
Irish buyer writes:
The Chinese factory will not release the Bill of Lading (B/L) in Dublin on the good until I pay an extra $5,000! I did not agree with them and they never ever mentioned $5,000 extra before this time. They said they wanted this money or they would not let me have the goods. Basically they are blackmailing me in to paying extra $5000.
The agreed price was $9,300 USD I ended up paying them $14,300 USD. I am still in shock. My hands were tied. There was nothing I could do.
I went to the Irish Chinese Association here in Dublin. There was nothing they could do.
My client was very distressed because they did not have the goods on time. Plus the factory didn’t get the quality right.
One problem is I only talk with Michelle in that factory as she is the only one that speaks English. She said they were using this opportunity to take $5,000 extra from me, because they knew I would not use them next year. Those were her actual words.
I offered them $3,000 extra to release the BL and she replied “NO” they wanted the full $5,000. Michelle, said she knew about the $5,000 but she decided not to tell me in Aug and waited until the goods landed in Dublin because she knew I needed them and that I would pay the money under distress. She also laughed at this point.
It is absolutely disgraceful business behavior.
Is there any way I can make a complaint? What should I do?
Unfortunately your situation is quite common in China. It’s a typical manipulation scam where perhaps the supplier didn’t set out to trick you when you first started cooperation, but later when the relationship deteriorated (for whatever reason) they decided to extract as much money as they could at a time when they had the most leverage. Blackmail is an accurate way to describe it.
If it was me, I would issue a polite but authoritative demand letter in Chinese from a reputable Chinese lawyer to let the supplier know you are not taking this sitting down. If you don’t already have Chinese legal counsel in place, I’d be happy to introduce some affordable English speaking Chinese firms.
I would also encourage you to get some emotional satisfaction by listing this scam factory at SupplierBlackList.com!
It’s the norm that the business associations and authorities can’t provide much help. They are so overwhelmed by the number of these kind of cases, that unless your loss is in the millions of USD, they don’t get involved.
I would like to offer some tools to help you better manage the relationships in China if you are lucky enough to bounce back from this disaster and engage a better supplier in China next time:
About the author: Mike Bellamy
Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center (www.ChinaSourcingInfo.org). Author of “The Essential Reference Guide to China Sourcing” and founder of PassageMaker Sourcing Solutions.