Hilarious Alibaba "Fail Safe" Video

I think this video shows that someone at Alibaba.com has a really good sense of humor.  This is one of a series of videos called "Fail Safe."  It's topical, timely and funny as well.

Check it out.

 

Why Does the Alibaba Fair Play Fund Have a Process?

I don't know how many transactions take place on Alibaba.com, but one must assume that there are millions.  Pulling numbers out of the air (STRESSING: I am inventing these numbers), if you figure that there are 10,000 transactions on Alibaba.com that take place per day, that's 3,650,000 transactions per year.  According to Alibaba, less than .05 percent of registered users have reported potentially fraudulent activity.  That is a small, small number.

Let's say that the unfortunate ones who get ripped off don't get a response from the supplier, or something else goes wrong and they lose money.  What do they do?  Well, duh, this Web site is all about the Alibaba Fair Play Fund, a program that was set up to help defrauded buyers get some of their money back.  So there is a way to go about it.  But that's just it.  There is a process.

Alibaba is a big company, but if you work with big numbers, you have to assume that there are a large number of claims coming in to the Fair Play Fund.  If you used my made-up numbers and take .05 percent of the total transactions (as approximated by Alibaba.com), that's still 1,825 potential claims for the Fair Play Fund.  What company could easily juggle 2,000 fraud claims at the same time?

That's why there is a process set in place to establish and verify a claim - no company could possibly have the resources to manage thousands of claims without having a way to collect the right information, attempt to communicate with both the buyer and seller, and determine who has been wronged.  I don't know how much time it takes to process a claim, but according to Alibaba, it can take between two weeks and two months depending upon the complexity of the case.

All of this again tells me that Alibaba.com is doing the right thing by providing due process for both the buyer and the seller, and also by providing a compensation fund for harmed buyers.

There's more information laid our in the Alibaba Fair Play Fund FAQ.

Five Steps to Avoiding Fraud on Alibaba.com

Alibaba.com has been in the news a lot lately because of its upcoming vote to go private along with selling back shares to Yahoo!  Behind the news stories are the millions of transactions that go through monthly (daily?) that are successful and leave both the buyer and the seller happy.  When you have millions of transactions, some will go bad.  It's the law of averages.

Like shopping for about anything from a toaster to a car, you need to do some basic research in order to ensure that you'll end up happy with what you have purchased, and this is especially true when dealing with suppliers as far away as China.

So after having been at this blog for a while, I have come up with some tips that I think can help you avoid scams and fraud on Alibaba as well as having to make use of the Fair Play Fund, the turn of last resort if you have been defrauded.

Top Five Steps for Avoiding Fraud on Alibaba.com

1. Check the list of banned suppliers on Alibaba.com.  If a company is investigated and found to have defrauded a buyer, they will be banned from the site and their name will appear in this section, which is usually updated monthly.  So start here.
2. Google the company.  It's sounds simple, but if people are happy, they may say something on on the trade forums or their own blogs, but if they feel that they have been defrauded, you can be almost 100 percent certain that there will be an online trail of unhappy customers.  Conversely, if you find an Enlish-language Web site with information about the company that looks legitimate, all the better. 
3. Try calling the company.  I don't speak a word of Mandarin, but if a supplier is hoping to do business with the English-speaking public, you have to assume that there will be someone there who speaks passable English and who can converse with you.  And make sure you are calling a business, not some guy's cell phone.
4. If you are really serious, investigate the Verified Gold Suppliers on Alibaba.com.  If verified, Gold Suppliers (according to the Safety and Security Center on Alibaba.com) will have had one of these two:  "a) A&V Checked suppliers are Gold Suppliers who have passed authentication and verification inspection by Alibaba.com as well as a third-party verification company. All legal business licenses and contact persons are verified for those who have been A&V Checked, or b) Onsite Check is a verification process for China Gold Suppliers. Personnel from Alibaba.com visit suppliers’ premises to verify ownership of the premises. The suppliers’ legal status and other related information are then confirmed by a third party verification agency."
5. If you are ordering a large quantity of items, ask for a sample.  It's perfectly fine to pay for a sample, but if you are ordering 1,000 widgets, ask the company to send you five and test them out:  see how the process goes and how long it takes to get you what you asked for.

These five tips are not rocket science, but simply represent some simple, quick ways that you can take advantage of services that are available to you. 

Fair Play Fund: When to Blame, and When to Claim

I like reading Alizila, the blog that was created by Alibaba to give a pretty objective view on all things Alibaba.  Read it:  you will see that they do not pull punches and call it like they see it.  It's not a mouthpiece for the company.

This site, however, is dedicated to raising awareness of the Alibaba Fair Play Fund, a fund that helps buyers recoup a portion of their money when they are proven to have been defrauded on the Alibaba platform.

In his Alizila post, "Who is to Blame for E-commerce Fraud?," editor Jim Erickson points out that in a recent court case, Alibaba.com was cleared of liability for the sale of counterfeit products by a Chinese supplier using the website.  More information is here, but the court case reinforces the fact that Alibaba is simply a platform that connects buyers and sellers;  it's like eBay or Craig's List.

Although this court has recognized that Alibaba is not liable for misdeeds carried out by their suppliers, they still take their facilitation role seriously.  If buyers get ripped off or scammed, they can still get compensation through the Alibaba Fair Play Fund.  I have written about it extensively, but essentially if you are defrauded, go through the Alibaba arbitration process and can prove fraud, you can get back some of the money that you were scammed out of.

So if you are an Alibaba user, do your homework first to avoid scams and fraud.  And if by chance you fall victim, know the ins and outs of the Alibaba Fair Play Fund.  You can get money back.

Avoiding Fraud on Alibaba.com: Alibaba Onsite Check

I am not sure who first said this, but someone once said "you can believe me, or you can believe your lying eyes."  I'd go with the eyes, thanks.

Onsite Check Icon

For people who are lacking experience in sourcing materials from other countries, especially China, it can be intimidating.  Alibaba.com has a wealth of information on how to do your homework and avoid fraud in the Safety and Security Center, but they too believe in "laying eyes" on a vendor's premises through their program, Onsite Check.

What is Onsite Check?

Onsite check is a verification program launched by Alibaba.com for Gold Suppliers in mainland China. Simply put, it means that an Alibaba.com representative has visited a supplier's place of business and many important aspects that prove that it is a legitimate business.  They check out the supplier's:

• Business license
• Main product lines/services  (up to five product lines/services)
• Business type (trading company, manufacturer or both)
• Company location
• Head of the department responsible for their company website on Alibaba.com
• Contact information  (e.g. telephone number, address, etc.)
• Certifications   (e.g. product certificates, export/import license, etc.)
• Bank account
• Factory location
• Premise size
• Number of employees
• Certifications of subsidiares, partners, and contractors

I am not in a position to offer advice (nor would I ever) on whom to source from on Alibaba.com, but if it were me, I would be much more inclined to trust a supplier whose business had been validated and verified.

More on Avoiding Scams on Alibaba.com

You don't buy something from someone who comes to your house with a sales pitch, do you (except maybe Girl Scout cookies, and those are just irresistible).  So if you would not buy something from someone who comes to your door, why would you buy an item (or thousands or items) from someone in China without doing your due diligence?

Alibaba.com is the world's largest e-commerce trading platform, but the key word in that sentence is "platform," as in "we build it and they come."  They have build a technology that connects buyers and sellers.  It's like eBay or any other web site that connects buyers and sellers.

Avoid fraud on Alibaba.com by trading safely

Fraud happens.  Online fraud happens.  Fraud from China happens.  With millions of customers, even if a small percent are scammers, you have a chance of being defrauded on Alibaba.com - if you don't do your homework and TRADE SAFELY.

The information on Alibaba.com changes frequently, but they have a new service whereby you can do some research and find out if you have encountered one of the bad guys:  their Alibaba Safe Trading Guide.   And understand that Alibaba is a company that metes out justice, but they have an investigation first.  So when a buyer complains and the claim is substantiated, the seller could be banned from the site and the fraud victim may in fact be eligible for a payout from the Alibaba.com Fair Play Fund.  A good FAQ on the Alibaba Fair Play Fund is on my other site.

Doing your homework and research first step in your fraud protection plan.

Top Ten Signs of Online Scams

Build it, and they will come.  Scammers, that is.

When you have a platform as big as Alibaba.com, as I have mentioned before, if even one percent of one percent are fraudsters, someone is going to get scammed.  Alibaba.com is a platform that connects people, not a store.  Note:  as I have said, if you have a dispute that cannot be resolved through normal means, you can always apply to the Alibaba Fair Play Fund.

From time to time, I'll hit the Alibaba.com Safety and Security Center to see what's new.  Recently, they posted their Top Ten Signs of Online Scams.  

The whole list is here, but it includes things like promises that seem too good to be true (they often are), agreements in which you have to pay up front, or someone being overtly friendly the first time they correspond with you ("Dearest Ernest...").

Have a read here.  It's worth getting smart knowing how to spot online fraud if you are on the Alibaba.com platform.