About the Alibaba.com Fair Play Fund

Cross-posted from Facts About the Alibaba Fair Play Fund.

I have said many times in this space that information can be hard to find on Alibaba.com.  For this reason, when I pluck out a few interesting nuggets, I like to share them, and sometimes, make them a little more intelligible. Let me stress a couple of things that will help simplify this:

• Alibaba.com is a platform.  It's software that like eBay, connects buyers and sellers.  In the grand scheme of things, it's zeros and ones in cyberspace.  That's it. When buyers and sellers get connected, if one percent of one percent of the suppliers are fraudsters, that's still a lot of people that can get ripped off.
• They are trying to do the right thing. Recognizing their responsibility (yet still acting as a platform), Alibaba has put in place procedures on the front end and back end to help ensure that people don't get ripped off.  On the front end, they have their Inspection Service to help verify that suppliers are legitimate, and on the back end, the Alibaba Fair Play Fund, that helps victims recover money when it has been proven that they have been defrauded.

A couple of points:

1. Pre-purchase: It's hard to weed through the Inspection Service page because it reads like a legal document, but here are some good links to the Alibaba.com Transaction Services Agreement and the Escrow Services Agreement.  They are long, boring legal documents but are worth reading if you are curious about how you may be impacted in the buyer-seller process.What's easier to understand is what Linda Kozlowski, Alibaba.com's director of global marketing and customer experience said September 2011, : "...Next month, Alibaba.com employees will begin visiting some 112,000 of the e-commerce platform's paid China Gold Suppliers in person to physically confirm that the factories exist and conform with members' registration documents, a process that is expected to take up to a year, Kozlowski said. A third-party inspection service will also conduct random, unannounced checks on an ongoing basis to make sure the manufacturers remain compliant."
2. Post purchase.  It's important to remember that like many successful companies, Alibaba presents vendors and suppliers with due process.  On their Alibaba Fair Play Fund page, it reads: "To be eligible for the Fair Play Fund payout, claimants must have presented a substantiated complaint before the Gold Supplier was removed from the site. Please note that Gold Suppliers are only removed from Alibaba.com after a complaint has been investigated and substantiated."

First, remember that it is a platform. Second, do your homework. Third, know your rights and responsibilities under the Alibaba Fair Play Fund.