Found this Article on Reddit and it has some amazing information on it.
Planning to import some products from China to resell on your marketplace? This post is for you!
Today I am going to tell you some extremely helpful things that you’ll face when you importing from China.
If you pay some attention to read these tips you will save a lot of time and valuable energy, and the most importantly, lower the risk you take.
The quick steps involved in importing from China
Firstly, if you are a first time importer and got a product idea for selling to your country there are a few quick steps you’ll want to follow:
*Prepare the necessary capital with GREAT CARE to invest. *Find your niche product. *Find a reliable supplier in China. *Begin the process of importing that both profitable and safe.
The following content will go into much deeper detail before importing from China and tell you plenty of facts and resources that you can use to reference of your import progress.
1. Why you would import from China
“China has been the world’s largest exporter of goods since 2009. Official estimates suggest Chinese exports amounted to $1.904 trillion in 2013. Since 2013, China has also become the largest trading nation in the world. “ investopedia.com
Top exporting countries– source from https://en.wikipedia.org/wiki/List_of_countries_by_exports
You might have known what benefits would be brought to you if you buy from China. But I still hope to go into detail about the advantages what exactly brought to you.
One of the biggest advantage of China is manufacturing that cost very low compared with other countries around the world, due to the rent, labor and etc. Besides that, Chinese government is encouraging export and refunding the taxes for exporter of China. It means that Chinese suppliers are able to provide goods to the world with much lower price. And go a step further of competition with other manufacturing countries.
This is an amazing opportunity to you as a seller especially for online business. By sourcing your own supplier from China directly that allow you stand out from your competitors who brought from their domestic importer and wholesaler. In other words, you are able to get extremely low prices and sell them with a considerable profit in your country.
2. Find your passionate product which is in a niche
Every business plan comes from an idea. And the product you chose is the idea of your importing business.
Hopefully, you already have great idea of product and planning to get started. But what if you don’t have one? If so, the tips you may like to follow as below:
Focus on something you LOVE. You will never lose interest of the thing you love as well as their relevant product. Thus, you’ll invest more time and energy than other people on researching it. All of this just because you love and enjoy doing it. Keep going with your passion, you scores at the beginning.
Think again it is good enough. A good and profitable product usually has these common points:
*small and light enough to be picked up and lower shipping cost from overseas.
*different from the out-of-date product that makes your product standing out.
*the selling price between $10-200. That’s a proven range which is work for small and medium size importer.
*continuable demands from buyers. Selling things that are salable consistently all year long and for the foreseeable future.
*twice times or more selling price compare with your importing price. Don’t wastes your time to fight with major retails. They are huge amount importers that allows them to sell at low mark-up price.
The more homework you do the better results you will get. When you have an idea with a product image, it’s time to next step: find your supplier in China who will be your business partner for a long-term.
3. It’s so much more convenient to find your China supplier in nowadays
By searching in the internet, visiting the trade show in China or local exhibitions of your country, even if you run a website with product posted that plenty of suppliers will reach you out!
“If your ship doesn’t come in, swim out to it!”
You probably have no reputation and not become the potential target get listed yet by Chinese suppliers as a startup or first time importer. So let’s talk about how you can find them at this stage. There are 3 approaches which are most popular ways used by most importers. (I’ am feeling funny to write down this list because they are also the ways where we find clients.)
*Google for “your product + supplier, factory or manufacture + China” *The main China based B2B (business to business) Platforms: alibaba/ Made-In-China / GlobalSources P.S. aliexpress.com is a good place to go with tiny quantity order.
Trade Show: Canton Fair (China biggest international trade fair that held in the spring and autumn seasons each year, since 1957) So you see there are multiple approaches to reach your supplier out effortlessly. But what is the more important point that is how to choose. A reliable and most suitable supplier means a lot for you, because you will put your investment on them, sell the products you bought from them and work with them for a long period.
One failure can destroy your business. You will never want to be fail at the beginning, so let’s go into deeper facts.
4. You need to know who you are working with
If you have no experience enough on importing from China, you might have no idea that who you are dealing with. There are 3 kinds of supplier and all of them both have the pros and cons. First off, let me tell you who are they:
*Factory / manufacturer: produce and provide products directly *Trading company (now there are some trade & manufacturing combo. company generated): buy from factory and resell, provide additional services. *Sourcing agent: help customers to sourcing product in China and charged for their service, mostly from 3% to 10% of the goods value. Now you should understand the roles they are playing, but it still doesn’t represent that you’ve known who they really are. Because nearly 90% of your supplier claims that they are factory if you search your product from the internet and get contacted with them. To be frank, I also did this years ago when I working in a trading company. At that time, I have always been educated that “you have to say you are a factory or you will lose the order!” by some elder colleagues even the boss.
When you ask your supplier is factory or trading company, they will probably answer like:
“We are a professional manufacturer/factory!”
“We are a shareholder of this factory.”
“We are a trading company but we own a factory.”
“We have our own factory and we registered this trading company for the international business.”
“Etc……”
These types of answers are bullshits at a high percentage, you’d better forget about it. Even you plan to make a fieldwork with your supplier in China, they will put their company name up in the door of appointed factory and make the factory’s people to use their name card and some more tricks if you were working with a trading company whom is attempt to be factory.
Being a role of factory always make sense in mind both you and your supplier. You might consider the price and quality would be the best and your suppliers will think that they are reliable and more competitive as a factory.
If you are serious about working with factory without any middleman, here is a useful checklist for you:
*Check their website or category and see if they provide a mass range of product. Generally speaking, a factory is unable to produce multiple kinds of product, because every single product line required production equipment, technology and mass materials to invest, that’s a huge amount. For example, if your suppliers provide stainless steel product and rubber/silicon product as well, then they probably are trading companies.
*Check the MOQ (Minimum Order Quantity) of your supplier. Usually trading company offers much lower MOQ than factory. For a factory, the cost of mass production for 500-piece products and 3,000-piece products is almost the same. There is a narrow difference of the production process (capacity, labor, materials and so on). A low quantity means the wastes of capacity, same labor worked, and higher cost of material to purchase by factory. That’s why factories are unwilling to accept a small MOQ. But Trading companies are able to take this by their multi-channel sources and they work with many small-scale factories who produce product only, without sales and advertisement channels to be found by overseas customer like you.
*Check the business license of your supplier. There is one thing you should know that is useless to check the registered capital that written in their business license because the registered capital is no need to be verified by bank or government now. In other words, any company could claim their registered capital as CYN 10,000,000 and that is legal in China. The right method is to check their business scope whether if appears MANUFACTURING “生产/制造” in Chinese.
*Check their company profile on Alibaba. If you found your supplier by this way, you can simply click into their company profile and check the business type if showing Manufacturer with a Verified sign. This way is simple but helpful since Alibaba offers the fieldwork service to their membership suppliers.
*Check the ISO certification of your supplier. Usually this certification is useless for a trading company. Asking them to show you a ISO certification, if your supplier cannot show it with their company name on it or calms the company name that written in the certification is a subsidiary company belonged to them, probably they are trading company.
*Check the established year of your supplier. According to our in-house expertise says, there is no doubt that is a fantastic factory who is able to survive more than 10 years. Factory aside, you are still competitive even you deal with a trading company who has run for over 10 years. No matter the quality or the prices, they must have those advantages to keep them going.
*Check their factor audit report. Both BSCI and Sedex are authoritative organisations which is a powerful evidence to showing they are factory.
Followed this list and get them passed, you’ll know that you want to know.
But I have to say it does not necessarily that you have to work with a factory. I will keep going into deeper content to tell you what is really matter to you when you importing from China.
5. Maybe trading company would be your better partner in China
As the low cost is the main reason of importing from China, most of time, many importers put the price on an important position and work direct with factory will be the best choice in their subconscious.
First of all, let’s talk about what you might face if you work with a factory:
*Language barrier. Even for nowadays, a numbers of factories still lacks of sales people who can speak English. You wouldn’t hope to put your investment on people who are difficult to communicate with or totally don’t understand you.
*They might have no idea with requirement of your market. They don’t understand how important is the market standards. To take a food-contact product for instance, if you are plan to selling in EU market and you might know LFGB is required by Europe. And the factory will ignore your requirement and eventually ship you the same product which is only can be sold in US market. Finally, your goods are illegal in your market.
*Their minimum order quantity is too high to accept for you. As I mentioned earlier, they probably won’t accept the small size order even if you said that’s a trial order. The factory who can be found by you usually is a large-size scale manufacturer, they always holding some big client’s order and that’s one of the reason why they are unwilling to take small one.
*They are unwilling to make sales samples to you. I think you might have such experience like: a product that your factory quoted you $10, you will be asked for $100 to pay if you need a sample to check the quality. The factory treat this as a sales channel!
*Lead-times are too long. The start time of your order process is depending of the factory’s schedule. In other words, you have to wait for a long time before you are their big client, and this is an inflexible thing when you working with a factory.
*Independent inspection of goods. They will check the quality by their own department which is means there is a possibility of careless and irresponsible process. It would generate extra cost of inspection by third-party for ensuring quality.
And etc…
“Whatever is has every reason for being.”
So what if you deal with a China based trading/sourcing company and what they can bring to you?
*No limit of fixed product. As they can work with all of factories in China so that they can provide you with a vast range of product. This allow you to source different products and ship together by working with them. And you don’t need to find several suppliers to contact and build relationship again if you plan to import different products, that’s a time-saving method.
*Small MOQ requirement. They work with factories flexibly. By using source channels of domestic so they can find sources easily that you are hard to reach. And that’s a good news for first time and small-amount importers.
*Sales samples be free. Most of them are willing to send samples with no charge because they are easy to get samples from factories even pay for it and be free for their customers.
*Better communication. Exporting is whole business for a trading company but not for factory. Factory can produce goods for domestic buyers that caused their core ability is production process NOT sales.
*Learn the export process well. As I mentioned before, the diffident core ability between factory and trading company. The latter will help your importing process more smoothly. Most of time you will get educated greatly by working with them.
*Better payment terms. There is no need to invest for production equipment. It means that they have more capital to invest in sales, including provide you a better payment terms.
*Faster lead-times. According to their customer’s needs, they can choose alternative factories who with available production capacity.
*A further step of inspection of quality. Usually a good trading company will inspect goods after the factory claimed they finished the inspection by their own independent inspection department.
Which type of business partner you should work with is according to your needs and preference. Obviously, trading company would be your better partner if you are not a huge-scale importer yet.
6. Do not try to buy the cheapest one
The rough guide to marketing success used to be that you got what you paid for.
In the market of China, there is no lowest price but lower price.
Searching a cheaper source is the reason why you importing from China, also it will make you stay competitive and with a higher profit range. But you should pay attention to avoiding the cheapest one that you get offered and do NOT try to deal with unreasonably low price EVER.
Scamming. The scammer’s favorite trick is offering extremely low price than the market. Usually, this is effect way to get attention from buyers, they will do a little investment of a high quality sample sent you. When you are satisfied the quality also with a unbelievable price then you are going to place an order to enjoy this bonus, however, once you wire the money to them you will find you cannot contact with them anymore.
The quality issues. Even though you are talking with the supplier who is not a scammer, the one who will accept ANY price as your requested. However, in order to avoid losing money, the supplier will change the material (and fake) or replace their defective inventory into your order. The result is, you pay for the lowest piece to exchange for thoroughly worthless rubbish that is unsalable.
Tips to avoid:
*Do some research of the supplier’s background before you contact them. Check their company profile listed on some verified approaches, google their company name and ask for certificate and etc. *Check the price of your product that listed on Alibaba.com, take average figure to compare with your supplier. Over 50% lower is impossible. *Always select a reasonable price. Pick the penultimate supplier to next step from your 3-5 chosen suppliers. (same quality/material in case)
7. Ship your goods to your country safety with the most suitable approach
The last step of importing from China that is shipping. And this is also an important thing to seriously consider because it will decide your total cost, lead time, and the risk of importing process.
Shipping methods that you can use: Post, Courier, Air and Sea.
Each come with unique benefits and it’s often a combination of these shipping methods to get Chinese sourced goods to your business. There should be come deliberation over the time frame you need your products, the security of your shipment, and usually the biggest factor, the cost.
- Regular Post: this way is used for small single item. It will take 2-5 weeks to arrive, and only available for under 2KG If you can wait, you can use this way for sample checking if it’s small enough. Approx. $USD 15/KG.
- Express Courier (ship to your door): the most popular used way for sales sample and small quantity order (under 200KG). Courier company widely used in China is DHL, UPS, FedEx and TNT. Most courier shipment just take 2~5 business days to arrival around the world. And it’s cost would be higher a lot than Post. Approx. $USD 50/KG.
- Air Freight: If your product is too large for courier, say more than 300KG. The best choice is Air shipment. The cost would be lower, approx. $USD 5-10/KG (depending on the weight). But this way is not for so heavy cargo. 2~10 days to arrival. However, through this way you will need to pick up the goods from the destination airport and have to handle documentation and customs clearance. Fortunately, you can outsource these work to a customs broker or trucking company with some extra cost.
- Sea Freight: The most economy way to ship massive goods but takes long time (3~9 weeks). As the same with air fright you will have to take care of the customs clearance and pick up the goods from the port. And there is also have to-door service available from the agent to transport to your specified address.
Shipping rates will make up a substantial percentage of your total product landed cost, so it’s important to keep them as low as possible. But sometimes time is more important than money.
It’s all about balance. Choose the right way after considering all the actual situations.
What else do you need to know to import from China?
I’d really like to know what you think about importing from China. Do you think there will be any big opportunity? Do you disagree with any of the points I’ve made above?
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