Alibaba Trade Assurance service was launched in early 2015. Thanks to this great features, buying from China become less risky with pre-agreed delivery dates and product quality.

As a popular wholesale supplies website, Alibaba.com attracts global importers by its low manufacturing costs and a huge choice of suppliers. However, buying from Alibaba can still seem daunting. Is Alibaba safe? How can I trust your goods will arrive on time and comply with my standards? How to select a reliable supplier on Alibaba?

In today’s guide, we will look at the Alibaba Trade Assurance service and how it works to protect buyers and sellers during the international trading.

Table of Contents

1. What is Alibaba Trade Assurance?

Trade Assurance is a transactional protection service offered by Alibaba.com to increase buyer-supplier trust. It provides protection specifically when:

·Your products are not shipped on time as per the contract with your supplier.

·Your products do not meet the quality standards as per the contract with your supplier. 

If an issue arises with a Trade Assurance-protected order, Alibaba.com will assist you in reaching a satisfactory resolution. This could imply reimbursing some or all of your expenses or reaching another agreement with your supplier.

2. How does it work to secure your purchasing?

There is always very high risk to be scammed when writing money directly to a supplier's bank account. However in a Trade Assurance-protected order, Alibaba acts as an Escrow agent between the buyer and seller to eliminate this risk. As a result, upon placing an order, the buyer transfers funds to a designated Alibaba bank account with Singapore Citi Bank. Only after the goods have passed a quality check and shipped on or before the deadline, will Alibaba release the funds.

In a way, the process has some similarities with how a letter of credits works.

3. Key benefits of Alibaba Trade Assurance

Try new suppliers with confidence

For decades, worldwide buyers would travel to trade shows such as the well-known Canton Fair to touch and feel products and assess quality. However, with travel restrictions in place, how can you instill trust in new suppliers when you can't visit factories or attend traditional trade shows? This is where Trade Assurance enters the picture.

Trade Assurance makes it easy to increase your network of trusted suppliers and take advantage of reduced manufacturing costs in China because you can approach a new supplier with the peace of mind that a Trade Assurance order should meet your specified product standards.

On-time delivery

I believe you must have asked your China-based suppliers more than once when your order or sample should be shipped.Trade Assurance can bring peace of mind as you can specify a shipping date in your contract with the supplier. If they fail to meet this deadline, you can file a dispute and request a refund.

Products that meet your standards

Once you’ve agreed your specific product standards with the supplier, Trade Assurance ensures the product you receive should meet the requirements, or you can raise a dispute. This gives you the buying confidence to make significant orders from a China-based supplier, taking advantage of low manufacturing costs and acceptable product quality.

4. How to creat a trade assurance order to supplier?

Given the benefits of trade assurance service, you'll need to know how to create such an order if you decide to use it to protect your order. We'll walk you through the process step by step in this chapter. You can create it yourself or have your supplier create it for you.

Step 1: Search & Contact a Trade Assurance Supplier

A. Simply click the Trade Assurance filter when searching for a product:

B.  Click "Contact Supplier | Chat Now" to make an inquiry.

C. If you're ready to place an order with a supplier that you previouslyworked with, you can click‘Order with Trade Assurance’ to start placing an order.

Step 2: Place Your Trade Assurance Order

Place a Trade Assurance order just like any other order, just make sure the supplier has the Trade Assurance icon. After negotiation, you could draft an order by yourselves or ask your supplier to draft an order for you.

Be clear about your exact product and delivery requirements and draft a detailed purchase order (PO) detailing all aspects of the order and shipping.

In this video, you will learn how Alibaba Trade Assurance Contract to be drafted by buyer.

5. What should be attentioned when using trade assurance?

Trade Assurance protection isn't automatic at Alibaba. Whether or not you're covered all depends on if you can use trade assurance correctly. Here are some tips for you.

A. Check the supplier's Trade Assurance limit

A Trade Assurance limit can apply to suppliers so if your order exceeds this limit you won't get a full refund. For example, if you place a USD15,000 order but your supplier is only covered for USD10,000, your refund will be limited to USD10,000 under Trade Assurance. This means it's critical to double-check a supplier's Trade Assurance limit before placing a large order with them.

B. Keep all your communications with the supplier on Alibaba.com

Keep all your conversations and negotiate with suppliers within the Alibaba Message Centre, rather than speaking on private third-party apps. In that way, you can use the chat history as evidence should there be a dispute.

C. Provide clear product specifications and quality requirements

When placing an order through Trade Assurance be as specific as possible about your quality requirements in the purchase contract. Stipulate the exact materials and dimensions rather than referring to something that's hard to quantify like 'good quality material'.

D. Pay to Alibaba, not to the supplier

One thing to keep in mind is that when using the Trade Assurance service, you should pay to Alibaba, not to the seller's private account. Under trade assurance orders, a virtual CITIBANK account will be automatically created for each transaction; you must pay to the specific CITIBANK account rather than the suppliers' personal account directly. Otherwise, the trade assurance service will not protect your payment.

6. How much are the trade assurance fees?

The Trade Assurance is FREE protection service that covers orders placed on and paid through Alibaba platform. However, Alibaba.com charges transaction fees on certain payment methods to offset their operational expense in payment processing. 

You could learn more about fees schedule as below:

*Please note that PayPal and Pay Easy are newly launched methods in 2021. Kindly check Alibaba Help Center for more informations about payment Methods.

7. How to get refund when there is dispute?

While disputes are uncommon, the unexpected can happen. If unfortunately the goods arrived does not meet the specified requirements, you may decide to open a dispute and apply for refund with Alibaba. However, you'll need to ask for a refund within the applicable claim period, after full order amount is paid.

The period within which you can file a dispute with your supplier may vary depending on the shipment method in your purchase contract, but it shall not exceed 30 calendar days after the date of confirmed receipt of the products.

With the Claim Period in mind, here's how to start the dispute online:

Step-1: Go to Order List Page, find the order and apply for refund.

Go to Orders-All Orders, find the order, and click View More to order detail page.And on the order detail page, click Apply for refund to open dispute.

Step-2: Fill the dispute form and submit evidences

Keep the following documents as evidence to ensure a successful dispute resolution. The Alibaba dispute team will investigate and review this evidence before rendering a final decision.

List of documents for dispute solution: 

Step-3: Wait for your supplier's response or request Alibaba dispute team to get involved

Once you submit a dispute both you and the supplier have 30 days to negotiate without the involvement of Alibaba. However, if you did not get any response or negative feedback from your supplier, you could escalate the case manually and request Alibaba dispute team to get involved from the 4th day onward.

When the Alibaba Dispute Mediation Team becomes involved, they will first request evidence from you and the seller - usually within 5 working days. Once they have sufficient evidence, they will make a decision, including whether the seller will cover all costs or whether Alibaba will support the return of goods at all.

It's important to note that buying from a supplier offering Trade Assurance doesn't  mean you're guaranteed a refund. Both the buyer's and the seller's perspectives will be considered in a dispute - Alibaba won't automatically side with you. Once again, your need to specify the quality requirements from the start, confirm them with the suppliers, and keep all communication records throughout the process.

8.Do all suppliers on Alibaba can accept trade assurance order?

The answer is NO. 

When you search products on Alibaba, you can find that almost every Chinese supplier will have this shell icon but it doesn’t mean they are willing to accept trade assurance orders. I can tell you that most Chinese suppliers are hesitant to use trade assurance orders, especially when the order value is significant, such as USD 50,000, because the suppliers are also unaware of the buyer's factual background and are unsure whether the buyer is trustworthy. There are some terrible buyers out there, and they take advantage of the fact that Alibaba is more likely to give buyers more benefits when there is a dispute between buyer and seller during the refund process. Based on this situation, many suppliers prefer not to place orders through trade assurance and instead have the buyer send the money directly to their bank account.

So, if there are many suppliers for the product you want to buy, you must select those who accept trade assurance orders. However, suppose there are few suppliers available for the product you want. In that case, it's still important to choose suppliers who don't accept trade assurance orders because not accepting rate assurance orders doesn't mean he's a wrong supplier. You can still judge if he's a dependable supplier in other ways.

Final Thoughts of Alibaba Trade Assurance

Trade Assurance Service is a fantastic feature that adds an extra layer of security when ordering from Alibaba.com. It is acknowledged that Trade Assurance made purchasing from China less risky. When used correctly, it can make importing much safer and easier. However, it is not a master key. 

Ultimately, whether you use trade assurance or not, it all comes down to finding a trustworthy supplier.