How to Safely Pay for Wholesale Furniture ordered from Overseas
By: Julia Aidan
Submitted: 2010-06-03 03:47:14 | Word Count: 469
More and more furniture stores are ordering commercial furniture from overseas since the move of the manufacturing base from the United States to countries like China, Malaysia and Vietnam. This move away from ordering from wholesale furniture companies that they know, understand and more importantly are governed by the laws of The United States has caused many furniture stores to become victims of unscrupulous overseas furniture manufacturers. The most common way that wholesale furniture manufacturers are taking advantage of furniture stores is through theft of manufacturing deposits. There are ways to protect your investments.
The most common way that furniture stores pay for furniture order deposits is through a wire transfer. A wire transfer takes money directly out of the furniture stores' bank account and deposits it directly into the wholesale furniture manufacturer's account. Once money is transferred out of the furniture stores' account, it is essentially gone. If you are in New York and you order form a facility in Shanghai and they steal your money, your only recourse is to hire a lawyer in China to go and find that individual and then make him repay the money he owes you. Since the average deposit on a shipping container is around 30% of the order and an average order is $15,000, the cost to retain a lawyer, find your thief, have them arrested and him repaying you, the money you are going to recoup is going to be far less than the money you are owed.
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In order to counter this potential problem, work with the most reputable firms you can find. Resist the urge to work with smaller manufacturing facilities that might not be here the next day. You can request financials from the wholesale furniture manufacturing company you are dealing with before you place an order or run a credit check on them through DUNs. Another resource to use is Llyons credit that may have information on your counter party. You can also ask for references from other customers and contact them to see if they have had any problems in the past with non delivery of furniture. Be weary as the references thy are going to give you may be fake so be prepared to approach references with skepticism.
The best way to protect yourself is to pay with an American Express credit card if you can as you can do a charge back if your order is never received. The manufacturing facility may request that you pay a 5% bank charge to use the credit card, which is against their card agreement, but in the long run that 5% may be cheap compared to multiple losses of your deposits.
