Sharing my lifetime experience in export/import. Product sourcing specialist.

[Gallus]

Hi Gallus,

What you describe is the activity of an export broker.

Your biggest hurdle will be your first one, and that is to learn the basics of both importing and exporting. You need to learn to talk the language of the industry, and that is very important. It is not only the exporting industry for which you need to learn the language. The same applies to the industry you are offering to represent as their export broker.

If for example you want to be a broker handing wallpaper, it is essential that you know all there is to know about wallpaper. Both the sellers you want to broker for, and the buyers you want to sell to will expect that you know what you are talking about.

Any very slight mistake in the description on a Bill of Lading could make it difficult or impossible for money to be collected on the Letter of Credit. There you are - I have used two import/export industry jargon terms that you need to understand, but there are heaps more.

I know it looks tempting, but I advise against rushing in. Educate yourself first.

My book is probably not suitable for you because although it deals with those terms you need to know, as well as things such as container shipping, freight forwarders etc, and the basics of importing, it is not an exporter's book. It deals primarily with safely sourcing products overseas and importing them the easy way.

I have some experience as an indent broker, which is the opposite of an export broker, and I know how hard it can be. Selling on indent means acting as an import broker, selling product on behalf of an overseas supplier and obtaining a commission on the sale. It can be a long time between meals.

The same principles apply when acting as either an import or an export broker. There are many small manufacturing businesses that produce items that could sell competitively in another country, but the owners are ignorant of the fact that it is even possible. Your task would be to find those manufacturers, identify their strengths, locate potential markets overseas, and convince the business owner that you could give them a trouble-free boost to their turnover.

There is a short cut for you in finding those potential markets overseas, and that is Alibaba. You could register as a vendor, and advertise your client's products there. You might even be able to make some sales, but I can assure you that in the process you will be swamped with opportunist, wannabee importers who will waste a huge amount of your time.

If I seem negative, it is only because I have seen the process first hand and I want you to understand that it is not easy.

Thank you for your honest response Walter. I did not find the answer negative, only realistic as to what should be expected from starting as either an import or export broker.

One thing I have noticed is that there is not that much information online on how does one get into this area of the exporting industry, which could be a good thing as it could mean it receives relatively little attention and thus it wont be as swamped with competitors, but it could also mean that there is not much interest because the barrier of entry is high enough to make it almost impossible for people without as many resources or experience to even start. From your answer I see it’s a mix of both, in the sense that you do need to be able to speak at a high technical level on the different issues but also because of that people may not find it is the easiest path to success.

 

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[Gallus]

Repeated post.

 

[Jakesynli]

I just want to say thanks for all the information you provided in your AMA Walter
I also bought your book and finished reading it today. I'm new in the importing industry, and your book simplifies the process. I feel much more confident to go through to import products. Thanks again.

 

[Walter Hay]

I just want to say thanks for all the information you provided in your AMA Walter
I also bought your book and finished reading it today. I'm new in the importing industry, and your book simplifies the process. I feel much more confident to go through to import products. Thanks again.

Many "experts" try to make it seem as complicated as possible in order to justify the huge fees they charge for their courses. Others simplify it to the point that they don't provide enough guidance for newbies and that puts them at risk. I think I have struck the right balance.

Be sure to post any questions unless they are confidential.

 

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[Jakesynli]

Thank you Mr.Hay. I appreciate you taking time to help us all out. Im sending you a message with a couple of questions pertaining to the product i am trying to import.

 

[Walter Hay]

Thank you Mr.Hay. I appreciate you taking time to help us all out. Im sending you a message with a couple of questions pertaining to the product i am trying to import.

You are welcome. See your messages. I found what you are looking for.

 

[Walter Hay]

Alibaba Under Fire From China’s Consumer Protection Watchdog.

In a report issued earlier this year, The Chinese State Administration for Industry & Commerce (SAIC) accused Alibaba of allowing merchants to operate without required business licenses, to run stores selling famous brands without authorization, and selling fake products. The SAIC is a government watchdog for consumer protection, trademark protection and business practices.

The report also said that Alibaba employees took bribes, and the e-commerce giant had not fixed flaws in customer feedback or internal credit-scoring systems. The government watchdog said “For a long time, Alibaba hasn’t paid enough attention to the illegal operations on its platforms, and hasn’t effectively addressed the issues.” The report went on to say “Alibaba not only faces the biggest credibility crisis since its establishment, it also casts a bad influence for other Internet operators trying to operate legally.”

SAIC said Alibaba was still allowing sales of contraband including fake cigarettes and alcohol, as well as items “that threaten public safety” such as knives and phone-tapping devices.

The watchdog says: “A huge number of merchants” haven’t registered for operating licenses and are engaging in illegal behavior including bribing Alibaba employees. The report also accuses Alibaba of allowing merchants to mislead customers during sales promotions on Nov. 11 and Dec. 12, it said.

“Some operators on the platform have created fake transactions and deleted negative comments to improve their own and others’ reputations,” SAIC said.

For more details see: http://www.bloomberg.com/news/artic...baba-of-lacking-proper-oversight-of-merchants

What Does This All Mean For Buyers?

• It means that little confidence can be placed in Alibaba’s verification system or Gold Supplier rating.
  
• It also means that although 90 million fake product listings were deleted prior to Alibaba’s float on the NYSE, the fakes are back.
  
• It means that feedback scores can’t be trusted.
  
• It means that sellers listed on Alibaba continue to mislead buyers.
  
• It means that Alibaba can’t or won’t deal with illegal activities on its sourcing platform.
  
• It means that bribing of Alibaba employees is still taking place even after it was supposed to have been cleaned up after the “Alibaba and the 2236 thieves” scandal.

My readers might now appreciate why I don't recommend using Alibaba for product sourcing.

 

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[TTG SS]

Alibaba Under Fire From China’s Consumer Protection Watchdog.

In a report issued earlier this year, The Chinese State Administration for Industry & Commerce (SAIC) accused Alibaba of allowing merchants to operate without required business licenses, to run stores selling famous brands without authorization, and selling fake products. The SAIC is a government watchdog for consumer protection, trademark protection and business practices.

The report also said that Alibaba employees took bribes, and the e-commerce giant had not fixed flaws in customer feedback or internal credit-scoring systems. The government watchdog said “For a long time, Alibaba hasn’t paid enough attention to the illegal operations on its platforms, and hasn’t effectively addressed the issues.” The report went on to say “Alibaba not only faces the biggest credibility crisis since its establishment, it also casts a bad influence for other Internet operators trying to operate legally.”

SAIC said Alibaba was still allowing sales of contraband including fake cigarettes and alcohol, as well as items “that threaten public safety” such as knives and phone-tapping devices.

The watchdog says: “A huge number of merchants” haven’t registered for operating licenses and are engaging in illegal behavior including bribing Alibaba employees. The report also accuses Alibaba of allowing merchants to mislead customers during sales promotions on Nov. 11 and Dec. 12, it said.

“Some operators on the platform have created fake transactions and deleted negative comments to improve their own and others’ reputations,” SAIC said.

For more details see: http://www.bloomberg.com/news/artic...baba-of-lacking-proper-oversight-of-merchants

What Does This All Mean For Buyers?

• It means that little confidence can be placed in Alibaba’s verification system or Gold Supplier rating.
  
• It also means that although 90 million fake product listings were deleted prior to Alibaba’s float on the NYSE, the fakes are back. It means that feedback scores can’t be trusted.
  
• It means that sellers listed on Alibaba continue to mislead buyers.
  
• It means that Alibaba can’t or won’t deal with illegal activities on its sourcing platform.
  
• It means that bribing of Alibaba employees is still taking place even after it was supposed to have been cleaned up after the “Alibaba and the 2236 thieves” scandal.

My readers might now appreciate why I don't recommend using Alibaba for product sourcing.

Just bought your book last night! Can't wait to dig in

 

[Walter Hay]

Just bought your book last night! Can't wait to dig in

I would be pleased to hear what you think of it once you have read through it. Also, don't forget to post any questions.

Walter

 

[Bosstradamus]

Hi Walter,

Sorry if this has been posted before. What are your thoughts on getting a product made by a manufacturer in China? I have an idea for an improvement on a product which they already make. Is it worth the risk of them selling it to other sellers or should I just stick with a US manufacturer?

 

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[Walter Hay]

Hi Walter,

Sorry if this has been posted before. What are your thoughts on getting a product made by a manufacturer in China? I have an idea for an improvement on a product which they already make. Is it worth the risk of them selling it to other sellers or should I just stick with a US manufacturer?

Whether it is a totally new design or just an improvement to an existing product, it would not be unusual to see your product on the market before you even receive a prototype.

If you can possibly have it made locally, that is what I would do. The extra cost could well be offset by the use of a Made in the USA notice in your advertising and on the product.

The extra cost may not be all that great anyway. Manufacturing costs in the US have fallen in many areas, and that is why so many businesses that moved offshore are now re-shoring and bringing the work back home.

 

[Jakesynli]

Good afternoon all.
I just wanted insight from some of you.
I have been going back and fourth with a manufacturer from china. I am using Alibaba because I havent found this product in any other sites .
I am getting 10 samples for around $55. I know western union is seen as a red flag, and paying to family name but they are a reputable company. This is my first time importing. I told the manufacturer that this time I will pay for western union to build trust but in the future I would like to use paypal or escrow. This is what they said

"Well received. After the payment, please give us bank slip for our confirmation.
For the large orders need to declare for customs, customs declaration is impossible via paypal or escrow. If you insist on Paypal or escrow, the price will rise 16%."

My question is , does this seem right? The price will raise 16% in addition to paying for the service. Also how do i give a bank slip for confirmation?

Thank you for reading my post

 

[wasspaw]

How would you source specific products ?? Would you ever use import genius or anything like that?? Have you ever imported from mexico??

 

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[Walter Hay]

Good afternoon all.
I just wanted insight from some of you.
I have been going back and fourth with a manufacturer from china. I am using Alibaba because I havent found this product in any other sites .
I am getting 10 samples for around $55. I know western union is seen as a red flag, and paying to family name but they are a reputable company. This is my first time importing. I told the manufacturer that this time I will pay for western union to build trust but in the future I would like to use paypal or escrow. This is what they said

"Well received. After the payment, please give us bank slip for our confirmation.
For the large orders need to declare for customs, customs declaration is impossible via paypal or escrow. If you insist on Paypal or escrow, the price will rise 16%."

My question is , does this seem right? The price will raise 16% in addition to paying for the service. Also how do i give a bank slip for confirmation?

Thank you for reading my post

Their story is not true. Outward Customs declarations can be made even if they have not received any payment. After all, sometimes shipments are sent on credit.

The bank slip they want is the WU payment advice so that they can collect the $55.

 

[Walter Hay]

How would you source specific products ?? Would you ever use import genius or anything like that?? Have you ever imported from mexico??

For sourcing I use the safe sites that I recommend in my book. There is no point in spending $99 minimum per month for less certainty about the reliability of a supplier than you can get for a one off cost of $97 for my book.

I have not personally imported from Mexico. There are some advantages for US buyers, but finding manufacturers there is not as easy as it is to find them in some other countries. Many of them are tied to US companies.

 

[wasspaw]

So if I found a manufacturer that produce s products for large us com pany would they sell to me directly or would they be in agreement with us company exclusive

 

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[Walter Hay]

So if I found a manufacturer that produce s products for large us com pany would they sell to me directly or would they be in agreement with us company exclusive

I can't say without knowing who the manufacturer is. If they are not tied by an agreement, they will probably be happy to supply you.

Bear in mind that first contact is just as important when dealing with suppliers in Mexico as it is when dealing with Chinese suppliers. I have posted this before but it is worth repeating because so many make big mistakes with their first approach and wonder why they don't even get a response.

It is not so much a matter of what to say, as what not to say.

• Don't mention that you are new to the business.
• Don't tell them you are a sole trader.
• Don't offer your business plan like you would to a supplier in the USA.
• Don't ask what is their MOQ. They will tell you soon enough. That is when you might start working on them to supply a lot less.
• Don't offer your tax or business registration details.
• Don't ask for samples early in your communications with them, and don't expect them to be free.
• Don't haggle. Most "experts" will tell you to do so, but there are good reasons why you should not and I teach why you don't need to. This issue is even more critical in the early stages. If you try to talk the price down early on you will suddenly find no more emails arrive.

There are a few things you should say:

• Tell them you are an established importer.
• Tell them quality is important to you.
• Ask them for a copy of their catalog, preferably a printed version.
• Give them your business name. Don't have one? Invent one.
• Give Yourself a title such as Purchasing Manager.

 

[Carlos Torres]

Hi Wasspaw. I live in Mexico and have 15 years experience in Sourcing for Mexico. What kind of product are you looking for?

 

[wasspaw]

Looking for hockey .sports equip
I've imported from china so have some experience importing containers

 

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[Walter Hay]

Looking for hockey .sports equip
I've imported from china so have some experience importing containers

Just beware of fakes. There are a lot of counterfeit name brand sports items being offered by suppliers in China. Don't even think of buying any name brand items or copies.

 

[Ryan D.]

Purchased your book. Thanks for answering my PM.

My big question was in regards to the customs broker/import regulations. But from my research if I'm using DHL orFedex they handle all of that. Am I correct in that understating?

 

[Walter Hay]

Purchased your book. Thanks for answering my PM.

My big question was in regards to the customs broker/import regulations. But from my research if I'm using DHL orFedex they handle all of that. Am I correct in that understating?

Yes that's right. As I say in my book: Why have a dog and bark yourself? Let others do for you what they are expert at, then you have more time to do what you have to do to make your business thrive.

 

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[Walter Hay]

It's been quite a while since I posted my last Q & A, but I now have 125 conversations in my file and they take up a lot of my time.

This question may be product specific but my answer reveals something that all importers should be aware of.

Q. I have been looking for leather jackets but all the prices I have been quoted seem too cheap for them to be real leather. Can suppliers call the product leather if it isn't?

A. They should not but they very often do. Resellers like yourself have often been caught out selling fake leather as real leather because that's what they thought it was.

To understand how they can be fooled you need to know something about the lengths Chinese manufacturers might go to to fool the unwary or ignorant. In China all is not always as it seems. I will deal with leather first, but many other products are also faked in a way that can fool many people.

Fake leather is often impregnated with a leather perfume. Smells like leather - must be leather? You can tell the difference if you can find an obscure place where you can snip off a tiny piece. Heat it very hot and if it is fake it will give off a plastic smell. If it is genuine it will smell a bit like burning flesh. No need to check if they identify it as PU Leather - that's Polyurethane. Faux Leather is fake leather. But.... often they just say leather when it is not. Using a powerful magnifying glass, look for tiny bubbles in the cut edge of the "leather". Faking techniques have improved, and those bubbled edges can be sealed with a hot knife, so if the edge is smooth - it's fake.

Here are a few examples of other fake processes:
Stainless Steel is often chrome plated steel. In some cases I have seen items painted to resemble stainless steel and it looks very authentic. Test: If a magnet sticks it is usually not stainless steel.
Gold Plating is often brass plating. In a test my importing business conducted some years ago, we found that most women preferred jewelry that was brass plated, thinking it was more attractive and was the real gold. Test: Brass is harder than gold of more than 14ct, so try scratching it.
Brass Castings are often made out of what is called a water extendable resin impregnated with brass filings or flakes. These give it some weight and make it possible to polish it like real brass. Test: Look for tiny holes at the base of the casting. They are produced by the bubbles in the resin rising to the top. The casting is made upside down.

The moral of the story is to never take things at face value, particularly if the price seems way under what you would expect to pay.

 

[najz]

Walter I am very grateful that you give so much value to this topic and forum for all of us here present. Thank You.

I am interested in the following product because I know sales representatives who sell it in the retail price, so they are looking for suppliers who can check and provide the goods from China. I'm talking about sterile medical disposable latex surgical gloves.

There were a few manufacturers, mainly after the service alibaba, but the content of e-mails and many factors you mentioned earlier increasingly giving me to understand that I have dealing with merchants.

Everything written here, is consistent with the problems with which we measure: "They typically have LONG LEAD TIMES require ridiculous terms like payment 30 days in advance of shipment, and huge minimums."

I have several friends in China,maybe it's best way to check them up.

I want to make sure that I have dealing with the manufacturer simply.

Thank you very much in advance for any reply.

 

[Walter Hay]

Hi

Walter I am very grateful that you give so much value to this topic and forum for all of us here present. Thank You.

I am interested in the following product because I know sales representatives who sell it in the retail price, so they are looking for suppliers who can check and provide the goods from China. I'm talking about sterile medical disposable latex surgical gloves.

There were a few manufacturers, mainly after the service alibaba, but the content of e-mails and many factors you mentioned earlier increasingly giving me to understand that I have dealing with merchants.

Everything written here, is consistent with the problems with which we measure: "They typically have LONG LEAD TIMES require ridiculous terms like payment 30 days in advance of shipment, and huge minimums."

I have several friends in China,maybe it's best way to check them up.

I want to make sure that I have dealing with the manufacturer simply.

Thank you very much in advance for any reply.

Najz,

If you are looking on Alibaba the chances are that you are dealing with a wholesaler or trader.

If you would like to PM me the name I can usually tell quickly if it is a genuine manufacturer.

Please note that for the next 2 days I am traveling in an area with poor internet coverage, so my response might not be as quick as usual.

 

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[Chantal]

Hi, Walter

In your book, you don't recommend EXW. However, I recall a post in which you stated that EXW is okay if using air courier. My issue is that the supplier is asking me what payment terms I want & I don't know what to tell them. When placing very small orders (e.g. less than two dozen) for small items, which incoterm is best? Thank you.

 

[TKDTyler]

Hey Walter,

Great thread! I have been working with a manufacturer and have been vetting them out personally to see if they are a legit manufacturer. The item I am wanting to import has great margins and the manufacturer provides 5 different models based on various materials. Pricing is around $17 which is fair because I think I can sell it between $45 and $60 (The original brand from Germany sells theirs for $179)

This is where I get confused. They only have 2 models able for sample purchase (10, 20, 30 units). The model that I want to purchase has an MoQ of 100 units and their won't budge.

Should I take this as they are actually a trader, or is it a factory that is sticking to their MoQ. I have purchased 15 samples of one model type before I read this thread.

I could PM you the info if that makes it easier to answer my question.

Thanks!

 

[Walter Hay]

Hi, Walter

In your book, you don't recommend EXW. However, I recall a post in which you stated that EXW is okay if using air courier. My issue is that the supplier is asking me what payment terms I want & I don't know what to tell them. When placing very small orders (e.g. less than two dozen) for small items, which incoterm is best? Thank you.

Hi Chantal,

I suggest that you don't use the term EXW, just ask for door to door by air courier. That automatically works as EXW. If you ask for the quote to be EXW, then request air courier that might confuse the supplier even though they should understand.

Walter

 

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[Walter Hay]

Hey Walter,

Great thread! I have been working with a manufacturer and have been vetting them out personally to see if they are a legit manufacturer. The item I am wanting to import has great margins and the manufacturer provides 5 different models based on various materials. Pricing is around $17 which is fair because I think I can sell it between $45 and $60 (The original brand from Germany sells theirs for $179)

This is where I get confused. They only have 2 models able for sample purchase (10, 20, 30 units). The model that I want to purchase has an MoQ of 100 units and their won't budge.

Should I take this as they are actually a trader, or is it a factory that is sticking to their MoQ. I have purchased 15 samples of one model type before I read this thread.

I could PM you the info if that makes it easier to answer my question.

Thanks!

It is possible that the model for which they require a not negotiable MOQ of 100 is not a big seller for them and so they will have to make a full production run. Setting up to make 10 would cost as much as setting up to make 100.

If the model you are currently ordering proves successful, that would probably make it worthwhile to order the 100 of another model?

I am happy to assess the company for you and confirm their status as manufacturer or trader. Just send me a PM.

 

[Wizard]

Thanks Walter for your help. I will check out the links you've sent me.