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Beware the risks of ordering marble granite stone products directly from a source in China

 

Granted, in the past few years, China has become an important exporting country for marble, granite and other natural stone products. It is little doubtful that China is capable of supplying high quality and low cost building and carving stones due to its low labor costs, rich natural stone resources and internationally recognized traditional workmanship.

There are many excellent marble granite fabricators and stone carvers in China. However, a large portion of stone products have been imported to the States by various exporters in China, although they claim "factory direct". Among these exporters, some are large firms, some are one-man business and some even do not exist at all.

With fast growing of international trade, more and more stone dealers, contractors and even homeowners have been ordering or trying to order stone products directly from sources located in China. Most people believe by doing so they would get much better deals comparing to buying from a vendor in the States. That might be right to certain extent. However, this could expose a buyer to great financial risks as the buyer has very few leverages on a transaction conducted between two countries. I have heard of many undesirable experiences and disastrous stories associated with ordering stone products directly from China.

I am not trying to be scary. The situation is indeed true and the incidents are absolutely not isolated. Let's first review the ordering process that most international trades would follow.

 
 

As the first step, you will search for a number of stone suppliers in China through Internet. You don't know anything about them other than whatever they advertised themselves. Then you obtain a number of comparison quotes for the stone products you are in the market for and decide to deal with one of them. Then you sign a sales agreement with the supplier and wire transfer a deposit (typically 30-50%). After the deposit fund leaves your bank, the only things you can do are waiting for production to be completed in China and, praying for the order to be shipped on time and in conformity with what you specified. Finally, you have pay for the full balance before the shipment is delivered to your site.

The problem is right here - you will virtually lose control of the ordering process after sending the deposit oversea. The supplier that took your deposit may choose to proceed in the following three ways:

1, They will produce and deliver your marble granite order as per the terms in the sales agreement. This would be an ideal result with a happy ending. You get what you need with great savings.

2, They will produce and deliver your order in an inferiors way. This scenario happens quite often. For example, different marble granite and other natural stone materials have significantly different costs. Using the materials with lower costs will generate additional profits for them. When you receive the shipment and find out what you get is not what you wanted, what can you do? Basically nothing. They have your money. They may choose to do anything or nothing. Even if the discrepancy is discovered before the order is shipped, you will still find yourself in a difficult situation. You may ask them to redo the order, but the chance is rather slim. You may cancel the order and demand a refund of the deposit, haha, canceling order is okay; getting money back? good luck. Here is a real story. I know a buyer who paid over $2000 to buy a precious "jade vase". When the shipment arrived, she discovered the vase was made in regular "onyx", which has a value of less than $200. What a loss!

3, They will grab your deposit, close bank account and disappear completely. They may change the business name and do the same trick again and again. But you will never be able to track them down. This group of "suppliers" are running scam business and have caused significant financial losses to American consumers.

 
 

Therefore, buyers should be extremely cautious when ordering marble granite and stone products directly from the suppliers in China. Here are some important tips.

1. Always do some comprehensive researches on the background of potential suppliers in China. This may be difficult to do, but you must do. You may request trade references from their existing customers in America. You may also contact local chamber of commerce in the city where the supplier is located to validate their business nature and credit history.

2. If you order is large enough, you may want to pay a visit to China before finalizing the order to meet the supplier(s) in person and to see their manufacturing facilities.

3. Make sure to have all specifications included in the sales agreement, the more detailed the better. Also make sure to state "no substitute material allowed" in the agreement.

Let me give you an example. Italian White Carrara is a well-known marble with high value. There is also a type of white marble quarried in China, namely Beijing Off-white marble or Hanbaiyu, that can have very similar color and textures to the Italian White Carrara. Many suppliers in China, especially carving stone vendors, often use Beijing off white marble to replace Italian White Carrara and argue that Beijing Off White Marble is also called "white Carrara" in English. The problem is that the cost of Hanbaiyu is only fraction of Italian White Carrara. How to avoid this type of trick? Easy, make sure to include "Italian" before "white carrara" and indicate "Chinese version of the material" will not be accepted.

Similar situations also exist in granite colors. For example, there are two versions of "Emerald Green" granite. One is quarried in China and the other has an European origin. They are quite different in terms of texture and price.

3. Try to use "letter of credit" (L/C) as the form of payment. It is the fairest transaction methods for both seller and buyer. Both parties are financially protected if they are determined to fulfill respective obligations as set forth in the sales agreement.

4. Stop and think again when you see a quote containing prices that are too low to believe. Most scam businesses tend to use extremely low prices to attract buyers or more accurately, the deposits.

5. When comparing the quotes you received, make sure to compare apple to apple. Suppliers in China like to use some vague pricing or delivery terms in their quotes so they can impose hidden charges, i.e., increase your costs, later.

For example, you will be surely happy with total costs of $3000 for shipping a container from China to Buffalo, New York, including ocean and land freight, duty and port charges. But wait, there is a line in small letters, saying "shipping costs are estimate only". As the commonly used trade term is FOB, or Free On Board, you as a buyer are responsible for all logistics related expenses anyway; a supplier can quote anything to make their grand total appear competitive. How much truth in that $3000 estimate? Almost none. But I have seen this figure in many quotes sent out from suppliers in China. The average value of a container load of granite and marble is right around $30,000. The duty alone will be almost $1500. Therefore, when comparing the quotes, make sure to compare the costs of goods only, unless what they quoted is "CIF" (costs, insurance and freight, in contrary to FOB) "to-door" delivery.

6. It is strongly recommended to place your order with an accredited marble granite stone importer in the States who is dealing with manufacturers in China directly. You may need to pay little bit more (5-15%) for your order, but this certainly will save you lots of hassles and mostly importantly, your financial risks will significantly reduced.

 
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