Alibaba Trade Assurance: An Unbiased Overview - Guided Imports

How it works

Alibaba Trade Assurance insures a buyer’s payment against missed shipment deadlines or a failure to meet established quality requirements. Qualifying suppliers are given the opportunity to participate in the Trade Assurance program depending on their previous sales volume, track record and verification of legal business status. This means that not all suppliers on Alibaba make the cut for Trade Assurance. When a supplier is able to offer Trade Assurance, it’s an indication of a certain level of proven reliability.

Alibaba will assign qualifying suppliers a specific coverage limit, or the amount Alibaba is willing to lay out on behalf of a supplier in case they fail to adhere to the terms of a purchase agreement. Suppliers who are in exceptionally good standing are able to offer higher Trade Assurance coverage amounts than newer or lesser established suppliers.

In the event a supplier is not able to ship an order on or before the agreed-upon shipping deadline, or if the quality of the products does not meet the terms of the sales agreement, the buyer can open a dispute with the supplier. The supplier is given three days to work out a mutually acceptable resolution with the buyer. If no compromise can be made during this time, the buyer is then able to “escalate the dispute,” or have Alibaba step in. Alternatively, the dispute will be automatically escalated after seven days without a response from the supplier.

Alibaba will listen to arguments from both sides as well as review the terms of the purchase agreement in order to determine whether the buyer is entitled to a refund. If a refund is warranted, Alibaba will pay it out upfront and then pursue the supplier for that amount.

When placing an order, buyers can opt for either pre-shipment coverage or post-delivery coverage. With pre-shipment coverage buyers will typically submit an initial payment upfront and then verify the quality of the production before it ships out. If at this point the supplier is found to have failed to meet the terms of the agreement, the buyer can withhold the rest of the payment and claim a refund for the initial portion paid. With post-delivery coverage buyers are required to inspect the production within 15 days of it clearing customs. If the contract is determined to have been breached by the supplier, the buyer must file a claim for the entire price of the order, or the maximum amount allowable within the coverage limit (whichever is lower). Any claims related to quality must be examined by a third party inspector approved by Alibaba.