I have been living and working in China for past 10 years. International trade is some thing that I took for granted. Let me make it clear that I am not a guru but what I am writing here basically sums up all steps in import with special focus on importing from China.
You can call it beginners guide to import from China.
You can call it beginners guide to import from China.
What to import Step 1: What to import
The most important decision in import is to find a product that you can import and sell easily for profit. Know your customer and find out at what price they can buy. This can be done by doing simple poll/survey or speaking to your existing customer. It will help to know about your market potential, competitors and regulatory issues.
A small research before import from China will reduce your chances of ending up with dead inventory.
The most important decision in import is to find a product that you can import and sell easily for profit. Know your customer and find out at what price they can buy. This can be done by doing simple poll/survey or speaking to your existing customer. It will help to know about your market potential, competitors and regulatory issues.
A small research before import from China will reduce your chances of ending up with dead inventory.
Locate potential suppliers in China. Step 2: Locate potential suppliers in China.
Now that you have identified the product you want to import and market next step will be to find right vendor which does not have to be the one offering cheapest price. There are many ways to vendors. I am giving a matrix below to help you decide.
Now that you have identified the product you want to import and market next step will be to find right vendor which does not have to be the one offering cheapest price. There are many ways to vendors. I am giving a matrix below to help you decide.
How to source Chinese products
Finding Right Supplier Step 3: Shortlist your potential supplier
The process of finding right vendor or supplier is a slow and detail oriented process. Price, more often, is not the main criterion for selection of vendor. Internet is full of Chinese supplier claiming to have factory and large office where as in reality all they have is pretty website.
In addition to price you should consider following.
Is my supplier a reputed and verified business? can they give reference?
Can they delivery in time? what about MOQ? Can they give small quantity?
What payment terms they offer? Is there any buyers protection via escrow or L/C payment?
Step 4:Negotiation and placing order
Some one who spend lot of time in China remarked “ in western countries signing the contract is end of negotiation where as in eastern culture signing contract signifies trust in each other and negotiation starts afterwards.”
It does not mean contracts are not important but it pays to know that eastern culture puts much emphasis interpersonal relations and some times things are done beyond what is written in contract.
Please clarify all major parts such as pre shipment inspection (A must), delivery date and mode of delivery, choice of logistics and export regulation. Your country/customer may put addition conditions such as quota / license, fumigation certificate (furniture), Azo free dye certificate (cloths and toys involving paints), health certificate, labeling and barcoding requirements. It is better to discuss every thing in advance before signing contract.
For more information about customs duty on import from China or any other country to USA please check
http://cbp.gov/linkhandler/cgov/newsroom/publications/trade/iius.ctt/iius.pdf
The process of finding right vendor or supplier is a slow and detail oriented process. Price, more often, is not the main criterion for selection of vendor. Internet is full of Chinese supplier claiming to have factory and large office where as in reality all they have is pretty website.
In addition to price you should consider following.
Is my supplier a reputed and verified business? can they give reference?
Can they delivery in time? what about MOQ? Can they give small quantity?
What payment terms they offer? Is there any buyers protection via escrow or L/C payment?
Step 4:Negotiation and placing order
Some one who spend lot of time in China remarked “ in western countries signing the contract is end of negotiation where as in eastern culture signing contract signifies trust in each other and negotiation starts afterwards.”
It does not mean contracts are not important but it pays to know that eastern culture puts much emphasis interpersonal relations and some times things are done beyond what is written in contract.
Please clarify all major parts such as pre shipment inspection (A must), delivery date and mode of delivery, choice of logistics and export regulation. Your country/customer may put addition conditions such as quota / license, fumigation certificate (furniture), Azo free dye certificate (cloths and toys involving paints), health certificate, labeling and barcoding requirements. It is better to discuss every thing in advance before signing contract.
For more information about customs duty on import from China or any other country to USA please check
http://cbp.gov/linkhandler/cgov/newsroom/publications/trade/iius.ctt/iius.pdf
Payment Methods Step 5: Payment
For small quantity including import for personal nature amount less then $1000 it is better to use PayPal or similar system which allows some kind of buyers protection.
However, for large amount of order PayPal is very expensive and many sellers may not agree to accept payment through this route. In this case wire transfer fund or L/C is a better option. If you plan to visit China and buy from whole sale market directly then you should bring funds in US Dollar (TC, bank draft) to change in RMB as most of shops prefer to be paid in RMB cash only.
For small quantity including import for personal nature amount less then $1000 it is better to use PayPal or similar system which allows some kind of buyers protection.
However, for large amount of order PayPal is very expensive and many sellers may not agree to accept payment through this route. In this case wire transfer fund or L/C is a better option. If you plan to visit China and buy from whole sale market directly then you should bring funds in US Dollar (TC, bank draft) to change in RMB as most of shops prefer to be paid in RMB cash only.
Pre shipment Inspection Step 6: Pre shipment inspection
Once order is placed it is very important to check the quality even if you are working with same vendor for long time. The most cost effective and practical way is to check sample that Vendor has shown before placing order with sample drawn from your actual shipment.
In other words, It is always a good idea to get a pre production sample and match it with pre shipment sample. Ensure that post production sample is taken randomly from your order and sent to you for inspection. Most vendors comply with this request and allow you or your agent to collect sample from their production site.
Once order is placed it is very important to check the quality even if you are working with same vendor for long time. The most cost effective and practical way is to check sample that Vendor has shown before placing order with sample drawn from your actual shipment.
In other words, It is always a good idea to get a pre production sample and match it with pre shipment sample. Ensure that post production sample is taken randomly from your order and sent to you for inspection. Most vendors comply with this request and allow you or your agent to collect sample from their production site.
Shipment Logistics Step 7: Shipment logistics:
Choice of logistics depends on when do you need your order and how much it will cost to ship to you.
For large bulky goods that would fit in 20/40 ft container sea freight is clear choice. Please check freight prices in your country and get complete shipment price which include charges that you will have to pay at destination. Prices will vary among shipping company.
If your order is few hundred kgs or less then it might be good idea to check air freight prices as they might be just a little more expensive then sea freight if not cheaper.
For importing of personal nature or small quantity (25 Kgs or less) you can explore option of using courier company such as Fedex or DHL. Some time your agent or vendor can find a local company giving reliable service at a cheaper price.
Choice of logistics depends on when do you need your order and how much it will cost to ship to you.
For large bulky goods that would fit in 20/40 ft container sea freight is clear choice. Please check freight prices in your country and get complete shipment price which include charges that you will have to pay at destination. Prices will vary among shipping company.
If your order is few hundred kgs or less then it might be good idea to check air freight prices as they might be just a little more expensive then sea freight if not cheaper.
For importing of personal nature or small quantity (25 Kgs or less) you can explore option of using courier company such as Fedex or DHL. Some time your agent or vendor can find a local company giving reliable service at a cheaper price.
Customs Step 8: Custom clearance
When goods reaches importer’s destination country it is subject to customs duties and taxes. Some countries may have additional requirements such as licensing or health/fumigation or other certificates. Check in advance (before placing order) with your custom clearing agent or government.
Courier companies like DHL or Fedex have their own customs clearing services which makes things a bit easier.
When goods reaches importer’s destination country it is subject to customs duties and taxes. Some countries may have additional requirements such as licensing or health/fumigation or other certificates. Check in advance (before placing order) with your custom clearing agent or government.
Courier companies like DHL or Fedex have their own customs clearing services which makes things a bit easier.
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