Top 10 safe trading tips

Before contracting with a potential client

1. Confirm Contact details

Always confirm if the address, phone number and email address given to you by your trading partner belongs to the same company. If a trader provides inconsistent contact details, for example an address in the USA and phone number from another country, we recommend you look up the address in the local phone directory and obtain the local phone number, and call this number to confirm that the person you are in touch with actually works for the company. Similarly, if a partner's email heading states that they work for a certain company, you should verify this. Be aware that some scam artists could alter their return email address heading to make it look like they work for a company that they don't.

2. Check your potential partner's background

A basic company credit report is highly recommended.

Background checks from independent third-party sources include a search for legal registration and credit reports. In many countries the existence of a company and its legal status is a matter of public record. If the company you are dealing with is not MercaTrade Verified, check with the company's registry in the partner's country to ensure that the company exists with a valid registration. If you cannot have independent access to your partner's registration information, you can gain further knowledge about your partner by ordering a credit history report from a local credit agency. Credit history reports contain information about the partner's business history in their relationships with banks and other trading partners.

MercaTrade offers Credit report services. Order a Credit Report.

3. Ask as many questions as possible in order to test the knowledge of the buyer/seller

• Where the product is manufactured?
• Does the manufacturer have quality certification?
• Do you have a certificate of origin?
• Do you offer warranty? How long?
• Do you provide spare parts? Etc...
• Ask as many technical questions that are specific to the product you are looking for as possible.

4. Search what the market price for your products is and be suspicious of any deal that is too good to be true

5. Meet Your Partner in Person after doing all verifications suggested in point 1 and 2

Whenever possible, meet your business partner in person and visit his company's facilities. While the internet offers you a wealth of information on your potential partner which enables you to make an initial assessment, there is no substitute for face-to-face contact.

In doubt, contact the local embassy or consulate for help, guidance and tips.

6. Protect Yourself when ordering or providing Samples

As a buyer, order a sample before committing to a purchase in order to be sure that the product meets your expectations.

As a seller, request payment for a sample and/or payment for shipping costs before you send out the sample, especially if your product has a high resale value.

7. Use Pre-Shipment Inspection Services

If you are a buyer, you can protect yourself against poor quality by ordering a pre-shipment inspection of the products. You can demand the inspection as a condition to payment.

8. Protect Yourself Against advanced Payment Risk

If you are a buyer, sometimes a supplier may ask you for a deposit (usually 30-50%) before he accepts the order. While this is not unusual between long-standing trading partners, if you are doing business with the supplier for the first time, make sure you have done sufficient background checks on the supplier before you agree to the deposit, or ask for a different form of payment, such as a letter of credit. If the seller seems more focused on quick payment than any other issue, or indicates that cash payment must be made urgently, more caution should be given to the transaction. Be extra cautious when the seller asks you to send money to an account whose real owner cannot be traced; for example, you cannot trace the real name of the person behind an account with a wiring service such as Western Union.

If you have already been trading with a partner, determine the payment terms by taking into account the credit history of your partner. A full Company Credit report would be useful since some companies will pay well the first few small orders then after you give them credit for a larger order, they will disappear or pay years after . A large number of companies have lost high amounts of money with this scenario unfortunately.

9. Pay close attention to high risk countries

Pay close attention to shipping or contact addresses located in regions with high reported incidences of online fraud, such as Eastern Europe and Western Africa.

10. Beware of Fake E-mail Addresses

It is possible for anyone with some technical knowledge to send an email with a fake address. When you receive an email from someone you know or whose email address appears legitimate, but the message of the email looks suspicious, you can verify whether the email came from the person whom the sender claims to be by using services specialized in this.

After Contracting

• Inspect the goods that arrive into your warehouse for damages. The longer you wait the harder it will be to claim with your insurance company. If you identify some damages, call an independent insurance expert right away to value the damage and claim as soon as possible.

• If a buyer is reluctant to pay its debt, contact its bank and tell them about your situation (A Full company credit report about this company contains its bank details together with Bank contacts). Some companies are also specialized in debt collection and could help you collect your money faster.

• In case of problem, try to get legal assistance quickly. Submitting a claim is often conditioned to following some steps that you do not want to miss. Your legal adviser will help you with this procedure.

Content by MercaTrade.com

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