Today DHgate will be honored at The AlwaysOn and STVP Summit at Stanford University. We are joining the AlwaysOn Global 250, which recognizes top emerging private companies that create new business opportunities in the global technology markets each year.

We are honored to receive this award, which puts us in the company of some brilliant game-changing technology players. Our team works exceptionally hard to improve our business. Listening and acting on their feedback has brought us to the attention of industry experts like AlwaysOn.

My team and I would like to thank our customers and partners who help us make our platform and services better. Please continue to offer your opinions or suggestions here.

Many readers have asked for my thoughts on a couple of other important aspects of importing goods and products from China namely, how to ensure and maintaining the product quality of the products you order, and what are the major cultural differences when dealing with Chinese manufacturers and suppliers. In this post, I’ll look at the product quality issue.

Ensuring Product Quality

Most Chinese manufacturers and suppliers make a tremendous amount of effort to make sure their products are of a high quality. This ensures that they get repeat business and great customer reviews and high ratings on B2B online marketplaces.

However, sometimes problems do occur. Here are a few tips to make sure that what you ordered is the quality that you expect and that quality is maintained.

• Don’t get obsessed with the cheapest prices. Often it is a more cost effective option to go with a product that is a little more expensive which is of a higher and verifiable quality.
• Ask your potential supplier for samples. Even if you have to pay a small fee, this may be a preferable option to making an order for goods of unknown quality.
• If the sample sent to you is not to your liking, keep persisting until you get the ‘perfect’ sample. By this method you make sure your product specifications are exactly what you want, and it also allows you to define your tolerances and limits. Remember that good quality is also in the suppliers’ interest so this procedure is of mutual benefit.
• If a Chinese supplier or manufacturer won’t work with you to make sure that the quality of the product is up to the standard you want, then get another supplier.
• Don’t put all your eggs in one basket! That is, don’t rely on one supplier alone and spread your orders over a number of them. Then if there is a problem, there will be a minimum impact on your business.
• Make the minimum quantity purchase order from one supplier. Although a vendor may be making a great, ‘too hard to refuse’ offer on product, it’s often best to first not rush into a large order straight away. This also helps with your inventory storage and control.
• Always perform quality control on your shipment when first received and before you sell the products to your customers for obvious reasons.
• If your order is particularly large or you are spending a lot of money, you should consider using a China-based reliable quality control and inspection service which can check the quality of your products before they are shipped, or perform an audit on your preferred supplier.
• Lastly, if you’re serious about importing from China business and have the time and means, visit your supplier (or a number of them) in China!

In my next post, I’ll share insights on doing business with Chinese suppliers in relation to understanding some major cultural differences.

In future posts I am going to give you some further tips but before that I want to elaborate on one of the issues I previously raised as it generated some interest from readers. I mentioned that under very few circumstances should you pay the whole or a substantial part of the purchase price up front as you will have a very hard time getting your money back if your product is delivered late (or not at all!), or the product quality is substandard. We don’t encourage this practice at www.dhgate.com, if fact we specifically discourage it by using an escrow service as part of our Buyer Protection Plan. We also actively warn potential buyers not to work outside the escrow system as it offers them no protection.

Escrow Protection System

Some readers have asked how this escrow system works so I’ll briefly set out the basics. The escrow service is a licensed buyer protection system whereby DHgate receives and holds the buyer’s payment until the transaction is fully and successfully completed. The steps are:

• After the buyer has placed a product order on www.dhgate.com, they send the payment directly to DHgate and not to the supplier.
• Once payment has been received, DHgate then informs the seller to send the product directly to the buyer.
• The buyer can track the delivery process via the DHgate website. Once the buyer has received the product and checked that it is all correct and suitable, they confirm this via www.dhgate.com.
• Only when DHgate receives the confirmation from a satisfied buyer will we release the payment to the seller.

The system works well in practice and is well-received by our overseas buyers. The other aspect of the www.dhgate.com buyer protection service is our dispute resolution process which works in tandem with the escrow system.

Dispute Resolution

At DHgate we recommend the following process to deal with disputes:

• Often the easiest way is to open up a line of communication with the seller which usually clears up any misunderstandings or miscommunication.
• If you have a dispute, you can use the DHgate Dispute Process to open, manage and track the dispute.
• By using this process, then this guarantees that your money being held in the Escrow system will not be released until the dispute is satisfactorily settled.
• If the dispute cannot be settled with the buyer directly, then you can refer the dispute to the DHgate Dispute Resolution Center.
• Once referred, DHgate will immediately investigate the dispute by asking both parties to provide all relevant evidence.

In my next post, I’ll give some insight on how to ensure and maintain product quality and standards, and some of the major cultural differences in doing business with Chinese suppliers.

In short, we have been trying really hard to make our brand promise equal our user experience.

Of all our activities, no where has taught us more about our customers, and allowed us to understand the way they work, their personalities, their issues and their preferences more than our social media presence.

We host competitions, offer special discounts, arrange giveaways, deal with questions, provide reviews, etc in a multimedia format that get’s our buyers talking. They talk because we listen and – crucially – we act.

Our promise equals our customers experience.

We have a way to go in making improvements to our business, but we are letting our customers know that we are working for them. And they appreciate it.  Transparency is key and 2.0 is the perfect channel to keep all informed and ask for feedback.

Have you been using social media to connect with your customers? If so, what approach do you find works?

visit www.facebook.com/dhgate to see what we’ve been up to lately.

As part of this process, I hear many success stories of overseas customers, more than often from the US, who have successfully started a new business through importing product from China or have significantly reduced their costs or increased their product range via this method. I am also often asked about the best ways of starting to import from China and what pitfalls to look out for.

Some of the emails I receive from DHgate customers in the US give me examples of their initial experience in importing from China, and often it was not initially that successful. Usually this is as a result of choosing the wrong supplier, not doing your homework and rushing into product order and underestimating the nature of international trade. I want to share it with you over the next couple of posts some of my thoughts and tips to make sure your experience is successful.

Choose Your Supplier Well

One of the most fundamental errors is to pick a supplier without a thorough review process. Check whether they are the actual manufacturer or merely a wholesaler as you always want to deal directly with the source. Check the supplier’s website to see whether it’s in English which is always a sign that they do business with foreign companies. Ask the supplier for testimonials and references, and then check them up. Use a China-based verification company if the size of the order warrants it, or read customer reviews. For example on my site, www.dhgate.com, we have a number of verification methods like a 3 tier rating system and a Feedback scores from other buyers.

Don’t Rush; There’s Plenty of Time

Next, don’t rush into anything. Although there is pressure from both sides to get it done as soon as possible, it’s best to give yourself a long lead time to do proper research, complete perfect product specifications and shop around. The product will always be there, and it maybe cheaper next month or with a different supplier.

Don’t Underestimate Time and Costs

Although international delivery these days is very efficient even for smaller product orders, it’s probably wise to always work on the basis that the delivery will be late, so factor it into your plans. Also, it is probable that the landed costs will be higher than quoted or you have estimated. Eager buyers have a tendency to underestimate the time and costs of importing from China.

Don’t Pay Purchase Price Upfront

Never pay the purchase price or a substantial part of it upfront. If you do this, then it will be highly unlikely you will get your money back if there’s a problem with the quality of the products or there’s a severe delay in the shipping. If a supplier demands you do this, it’s probably best to find a new supplier. At www.dhgate.com, we use an escrow payment system where you don’t pay the supplier until you’ve received your shipment and are fully satisfied with it.

In my next post, I will give some more tips on how to deal with Chinese suppliers and basics on how to import from China especially in relation to understanding cultural differences, maintain product quality and dispute resolution.

This is part of the latest ‘mantra’ of the ecommerce industry: ‘frictionless ecommerce’ which involves giving convenience, flexibility and options to a consumer.

The idea of moving money from one person to another, both quickly and cheaply is a relatively new concept. For decades, the banks had a stranglehold on the process. Checks took up to a week to clear, and transferring money from one bank account to another took days, and fees were levied at every step. The introduction of credit cards and EFTPOS made it easier and quicker but provided the credit card companies and banks more opportunities to deduct fees.

There’s no doubt that this will be one of the more interesting areas of development in the ecommerce industry in the future. However, I believe that a ‘frictionless ecommerce’ payments system is still a long way off.

In the current international product sourcing business world, the reliance on safe, cost-effective and seamless payment systems is still of prime importance to buyers particularly those who are sourcing goods from China.

As I discussed in my last post, although China is enjoying exponential growth in its ecommerce sector and the credit card industry is on the verge of major expansion over the next few years, the country is still a cash-based society. There is also a lingering distrust of anything that doesn’t involve cash.

This is particularly so in the millions of small to medium size businesses that power the Chinese private sector. Many SME’s do not have the ecommerce platforms or sophisticated banking systems to handle domestic cyber payments. The same is true for international transactions. A US buyer can’t simply send or wire money to a Chinese supplier if the supplier doesn’t have a foreign currency account held at a Chinese bank. Even if it does, the supplier requires approval from the Government to convert that payment into RMB that can be transferred to its local account. In many cases, such complexity and cost is beyond the reach of most Chinese suppliers.

Even in the area of direct sourcing of Chinese products, the available payment options like T/T or Letter of Credit become problematic because they are simply too expensive for smaller companies and purchase orders.

The ability to simplify the payment options and systems between Chinese suppliers and overseas buyers was one of the major driving forces of the establishment of the B2B intermediary websites like the one I established, www.dhgate.com. Rather than have to make a payment directly to a Chinese supplier which may have limited, unsafe and expensive payment options,( if any at all), sites like mine provide a range of payment options which bridge the gap between overseas and Chinese banking systems and make the process seamless, transparent, cost-effective and safe.

For example, www.dhgate.com currently provides the following payment options:

1. Pay Pal, the world’s leading and most reliable online payments service. Pay Pal have recently announced a partnership with ChinaUnionPay, China’s biggest inter-bank payment and settlement system which will enable more and more Chinese companies to participate in international ecommerce transactions. This is the most popular and preferred method as you don’t need to use your credit card online, payments are traceable and Pay Pal offers its Buyer Protection service.
2. Credits cards like American Express Visa, MasterCard and Discover card.
3. Real time bank transfers.
4. Offline payments like Western Union and other bank transfers.

The difference between my B2B site and others is that we recommend overseas buyers do not deal directly with a Chinese supplier but pay any amounts via the above options directly to www.dhgate.com. The site also offers overseas buyers an Escrow Service which is a licensed buyer protection service. Under this service, DHgate receives and holds the buyer’s payment until the transaction is successfully completed. Only after the buyer approves the products received will DHgate release the payment to the Chinese supplier.

This highly innovative service has been very successful with overseas buyers with numerous cases of money being returned to overseas buyers who were not completely satisfied with the quality or standard of what they had purchased. In fact, it has been so successful that it has now been copied by other B2B sourcing sites and has become the standard for Chinese product sourcing sites.

In recent posts, I have been discussing payment systems in China. Before I continue on that in my next post, today, I would like to talk about Alibaba’s recently developed hacker-technology and how this relates to another important aspect of the business environment here: the competitive situation in China.

One of the key challenges facing China is moving away from low-quality imitation of products and services to more innovative, high-quality equivalents. In fact, this is a key area of investment for my company, DHgate, as we development support and education systems for Chinese manufacturers. Previously, Chinese businesses could create value by lowering production overheads; however, in the twenty-first century, being ‘cheap’ is not enough. I believe the goal should be for Chinese businesses to create value in a totally different way: by innovating beyond the competition.

In recent years, what we have seen is the emergence of a vanguard of dynamic new Chinese businesses that are capable of this. Through DHgate.com, I have found that fostering this attitude internally has allowed us to achieve rapid expansion in international markets. In the West, audiences respond to originality and not, as has been the case in China, to replication.

This has been at the forefront of my mind recently, as one of our key competitors Alibaba, developed and introduced a mechanism which allows its suppliers to access rival backend system and pull content over to their site. This competitive imitation is the hallmark of the old way of doing business in China, and it is a worrying sign that a recognized company such as Alibaba has resorted to these tactics. This is not the environment in which Chinese business will thrive and become true international market-share contenders.

The philosophy we espouse at my own company, DHgate, is that to be the best you have to be able to innovate beyond the competition. First-mover advantage has proven to be key in online industries, but by the time a new feature has been widely replicated, a truly innovative company will already have developed another improvement.

The competitive situation is improving in China. Government regulations are slowly being rolled back, industries are becoming more diverse and dynamic, and a growing number of Chinese businesses have shown they have what it takes to be global leaders in their field.

China’s future lies in developing high-tech, fast-paced, competitive new industries, and I believe fostering a inventive business atmosphere, not competitive imitation, is the quickest and way to get there.

You can read more about how the site works in the press release pasted below or by logging on to the site here, but what I wanted to talk about in this post is how the launch represents my attitude to business growth.

As frequent readers will know, when I started DHgate I did so to help small and medium business enjoy the same opportunities which had previously only been available to Big Box retailers. We were the first company to fully integrate all aspects of the cross-border wholesale trade with China on a single ecommerce platform, allowing cross-border trade to be conducted entirely online. This process involved (amongst many other things) designing proprietary technology, attracting the web best systems development professionals, securing investors, educating the market and doing everything we could to make it actually work. It hasn’t always been easy, and the work is far from over, but it has certainly been rewarding to watch it, and its users, flourish.

Creating a healthy, prosperous environment where SMEs have the tools they need to thrive fuels good business for everyone. And I know that that extends beyond transactions; SMEs face other challenges where help is also welcome.

I’m not claiming that one microsite will hold all the answers, but perhaps it is a step in the right direction and may inspire others to invest their time and expertise, too. Being open, proactive and supportive is win-win for all involved – and I’m prepared to put my money where my mouth is, so to speak.

So please log on to the site, offer your opinions or suggestions for improvement here and let me know if it helps. It was created to help you, and I want to make sure it does.

DHgate.com First in China to Launch Virtual Office

New Website is Geared to Help New and Growing Online Retailers

Navigate an Ever-Evolving Industry

China’s leading wholesale marketplace and champions of small businesses, DHgate.com, today launched IntroducingSuccess.com, a virtual office created exclusively to support America’s aspiring entrepreneurs and SME retailers.

The free site serves as a repository of information about starting and running a successful online business. IntroducingSuccess includes detailed guidance on all avenues from website tips to international product sourcing – including practical know-how on increasing profits through easy dealings with China-based suppliers.

The site, a first of its kind in this market, features a team of animated professionals all working for fictional start-up company, ‘SuccessCo’. Each team member has a specific area of expertise, such as Susan Oliviera in Accounting and Richard Cooke in Operations, all headed by CEO and Founder, Maggie Succesco. They share their insights and resources with visitors in an easy-to-navigate virtual office space.

Introducing Success is broken into three primary areas. The first is for ecommerce novices and provides a questionnaire for would-be-entrepreneurs and details on starting a business. The second section which provides content ranging from web design tricks to shipping options is geared towards those who might already be retailing, just not online using an international sourcing model. The last section includes marketing and sales tips that can be used by newcomers or experienced sellers. The site also features valuable information on doing business with China.

Ecommerce pioneer, DHgate.com, is the first Chinese company to specifically focus on helping western business owners get the most out of trade with China by addressing everything from “Chinese Business Practices” and “Choosing the Right Supplier”, to useful resources such as ““Taxes, Duties and Customs Considerations”.

This innovative thinking is typical of DHgate.com and Founder and CEO, Diane Wang.

Diane is an experienced entrepreneur who left senior management at Cisco and Microsoft to start Joyo.com, which she grew to China’s most successful B2C site and was subsequently acquired by Amazon in 2004. Having been an ambitious online retailer with little start-up capital, Diane learned the hard way that international trade with China could be made much easier. She launched DHgate.com that same year.

“DHgate.com takes the hassle out of cross-border trade with China, allowing safe transactions to take place in a few clicks of the mouse. 1.5 million small businesses have been able to grow their profits through purchasing from the 500,000 China suppliers on DHgate.com, and IntroducingSuccess.com has been created to take that further.”

IntroducingSuccess.com is a resource hub that helps with the other fundamentals, and is designed to save businesses time and money.

“It was also important to me that the site doesn’t just cater to those businesses which use DHgate.com to buy their inventory – we wanted it to be a place that ANYONE interested in starting an online shop could go for information. That’s why we used a virtual office and separate URL. “

As a market-maker, DHgate.com adopts a forward thinking business model, based on providing “freemium” (free and premium) services to business owners. IntroducingSuccess.com is a free, value-added service which complements the free membership model offered by the DHgate platform. On DHgate.com buyers pay nothing upfront; DHgate earns its revenue through commissions paid by the seller—only after a transaction is completed successfully.

The company is focused on providing easy access for buyers to learn more about making the most of China’s supplier base and making the most of the boom in ecommerce. They frequently update their Facebook page and Twitter accounts as well as running two popular blogs. Blog.dhgate.com focuses on wholesale trends and The Gateway Blog (www.thegatewayblog.com) shares Diane’s personal advice to entrepreneurs and retailers. With webinars, podcasts and even a YouTube Channel in store for 2010, buyers will find DHgate.com a hub for all their business needs. And starting this month, Diane will also host a regular blog entitled “The View from China” on PracticalEcommerce.com.

As Diane says, “It’s not just about transactions – It’s about leveling the playing field for businesses of all sizes and opening up China to the world.”

Although replica product listings are an issue facing all ecommerce platforms across the web, I feel proud that DHgate is setting a new standard for B2B trade. Earning buyer trust is vital, and so we are continually working to better the methods of identification and removal of illegitimate products. Rather than be discouraged by this challenge, I’m excited that DHgate has a chance to really make a difference here.

Recently, we teamed up with brand protection agency, MarkMonitor to develop an automated system to give extra assurance for buyers. The API, which allows automated removal and suspension of questionable products and sellers, is an added safeguard to the platforms comprehensive anti-counterfeit measures.

Through a long partnership with PayPal, we have conducted thorough audits of the sites sellers, resulting in the removal of millions of product listings. We also utilize Escrow to protect buyer’s purchases, only allowing the release of their payment to the seller once it has been confirmed that they are happy with the goods received. Combined with our Trust Scores measure, feedback system and “Ask the Seller a Question” mechanism, buyers have all the tools they need to make a safe purchase. But we will keep going until this is no longer a concern for our users.

What considerations do you make when selecting products for your shop? Share best practice tips and thoughts here.

The pilot program, entitled “Ecommerce and New Job Creation”, tests a training model that coordinates business, education and government entities. Starting with a modest group of 70 students, experienced staff from DHgate.com and Baidu provide recent graduates with practical in-job training and valuable international ecommerce skills.

On completion of the course students are awarded a qualification detailing the expertise they have gained in various areas of ecommerce. Then, we will make official introductions between graduates and enterprises that will benefit from their newly acquired skills and academic background. If successful, our plan is to grow this pilot program and roll it out to other institutions across China.

While I am entirely invested in the positive impact this will have on China’s youth, my efforts are not entirely philanthropic – there is a business benefit here too.

With 400,000 China-based wholesalers and manufacturers using the DHgate platform to connect with 2.1 million global small-business buyers, I also hope that the training course will prepare students for international business and help Chinese suppliers exceed the expectation of the global marketplace.

I believe that improving the abilities of SMEs to conduct fruitful cross-border wholesale, will increase the number of international busineses that choose to source from China, and that a proportion of those will choose to do so via DHgate.

Even though the immediate value to my business is limited, this could be significantly important in the future – and I’m playing the long game. Sure, in the meantime I am implementing other ways to better the experience for users that will have a more immediate affect, but programs like this one have a deeper value too, and it feels good when efforts are rewarded in more ways than one.

Are you conducting any long-term improvement programs? Why not share your details here?