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

Walter Hay

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So I read the entire thread and from what you've said, we should NOT import electronics from China.

At the moment I have some headphone samples coming in. I guess I should just cut my losses on that? What's the alternative?
I think @ddzc is right. I know of a number of people who have imported headphones and the only one who has had a serious problem is the one who imported knockoffs of a big brand.

The relative simplicity and long history of headphone technology probably exempts them from the general recommendation to avoid electronics.

There are other reasons why some can succeed with Chinese electronics. The most successful person I know who began by using my book as a guide has great qualifications herself, and her husband is also an electronics engineer. They searched and found a top manufacturer willing to work with them and now have their own brand that is selling well, with very low return rates.

Now that you have product coming in, test them yourself and if satisfied, see how your marketing goes.

Walter
 
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Texan

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I just wanted to say thanks to Walter for his reply to my question. It was much appreciated and insightful. Thank you sir!
 

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Thanks for the reply, I'm just wondering if it'd be the same process not just in my country but getting manufactured and sending straight to amazon in america.
The therapeutic Goods Administration (TGA) in Australia administer such things, but it won't be easy getting information from them. They are one of those bureaucracies that expect you to know it all.

Emergo http://www.emergogroup.com can provide a lot of help, or a licensed customs broker specialising in medical devices or therapeutic goods could if you can find one, but they will charge you for their advice unless you can convince them that you will be getting them to handle your imports.

You can usually add a lot of beneficial ingredients provided you don't make any claim that they are beneficial. If you claim therapeutic benefit the process of obtaining approval will be slow and costly. The TGA tend to follow the US FDA, although sometimes they insist on doing it their own way, but if the product already has a CE marking, it will almost certainly be approved by the TGA.

Walter
 

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I think @ddzc is right. I know of a number of people who have imported headphones and the only one who has had a serious problem is the one who imported knockoffs of a big brand.

The relative simplicity and long history of headphone technology probably exempts them from the general recommendation to avoid electronics.

There are other reasons why some can succeed with Chinese electronics. The most successful person I know who began by using my book as a guide has great qualifications herself, and her husband is also an electronics engineer. They searched and found a top manufacturer willing to work with them and now have their own brand that is selling well, with very low return rates.

Now that you have product coming in, test them yourself and if satisfied, see how your marketing goes.

Walter

Ah ok. I would like to read the book before I go all-in on one of these Chinese samples to make sure I'm doing everything right. Thanks Walt.
 
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Walter Hay

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Thanks for the reply, I'm just wondering if it'd be the same process not just in my country but getting manufactured and sending straight to amazon in america.
In the case of the US, you would have to be sure to comply with FDA rules. That is not easy to do unless you are well entrenched in the industry, knowing all the jargon, as well as some of the basics related to their rules.

I suggest that you could get paid help from: http://www.thefdagroup.com/ They have many ex FDA personnel on their staff.

Once you have the product up and running, sending direct to FBA would be a good way to go. In your case I doubt that your supplier or Amazon would try to cut you out or compete with you.

Walter
 

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Hi Walter,
So I'm looking into purchasing 50 sets (comes in pairs so 100 pieces) of this one item. They cost about 2 dollars a piece and can potentially sell them for 3x as much. The supplier has said that via freight (CIF) i would pay $200 in shipping before duty. Each of these items weight less than a pound, probably about 5 ounces at the most. This doesn't seem right to me because I wouldn't make any profit if I went with the deal. Is there a way I can calculate shipping myself to see if they are just trying to take more money from me or do you think this is actually how much shipping should be?

Best, Mike
 

Walter Hay

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Hi Walter,
So I'm looking into purchasing 50 sets (comes in pairs so 100 pieces) of this one item. They cost about 2 dollars a piece and can potentially sell them for 3x as much. The supplier has said that via freight (CIF) i would pay $200 in shipping before duty. Each of these items weight less than a pound, probably about 5 ounces at the most. This doesn't seem right to me because I wouldn't make any profit if I went with the deal. Is there a way I can calculate shipping myself to see if they are just trying to take more money from me or do you think this is actually how much shipping should be?

Best, Mike
Hi Mike,
If the retail is only 3X your buying price I suggest that you are paying too much. Are you sure you are dealing with a real manufacturer? What you have been quoted sounds to me like a trader's price.

Regarding the freight, CIF includes insurance,and for a shipment worth $200 I suggest that is an unnecessary additional cost. The total freight quoted must be for air courier, but even so, it seems excessive, and the supplier is likely wanting to make extra profit on the freight. You can get a freight estimate on the UPS China site, but most suppliers can usually get better rates than what you will find there.

Maybe you need to find a better supplier, and in particular a genuine manufacturer.

Regards,
Walter
 
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mikeobi

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Hi Mike,
If the retail is only 3X your buying price I suggest that you are paying too much. Are you sure you are dealing with a real manufacturer? What you have been quoted sounds to me like a trader's price.

Regarding the freight, CIF includes insurance,and for a shipment worth $200 I suggest that is an unnecessary additional cost. The total freight quoted must be for air courier, but even so, it seems excessive, and the supplier is likely wanting to make extra profit on the freight. You can get a freight estimate on the UPS China site, but most suppliers can usually get better rates than what you will find there.

Maybe you need to find a better supplier, and in particular a genuine manufacturer.

Regards,
Walter

Someone who previously helped me out advised me that 3x the buying price is good. What do you suggest?
 
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Bosstradamus

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Walter,

I received this message from one of my suppliers

"so sorry for being late. Niki told me everything about you. Our team discussed about this issue last night. Cause usaually we ship goods to destinations. Transportation of mass goods by air is rare in our business. And the order quantity makes it more difficult. We need time to calculate the freight. The payment term is 30% at order place, 70% before the goods sent to you. The PI has our A/C number. Before you pay we still have freight issue to be confirmed. I will inform you of the freight later."

I think its safe to say that they have figured out that I am small time. I'm not sure what PI means. I assume a/c is account?

The 30/70 seems about right from what I've read. The main thing I'm questioning is why they seem opposed with shipping by air. I've done a lot of reading and research and it doesnt seem like air shipping is a big deal.

Any light shed on this will be much appreciated. Hopefully this will help a few others as well
 

Walter Hay

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Someone who previously helped me out advised me that 3x the buying price is good. What do you suggest?
A lot of people are satisfied with small margins, but when running my importing business I guaranteed my franchisees a minimum margin of landed cost X 250%. With freight cost being so high, often equal to the value of the goods, that means buying at a price that was about 1/5 retail. There is a big difference between 3X and 5X, but it can be done if you make sure you are only dealing with the manufacturers, and that mostly (but not always) means using sites other than Alibaba. It can be very hard work to sort out who is a real manufacturer on Alibaba, regardless of what they claim.

My book gives links to sites where you can readily find genuine manufacturers, without the hours, days, or weeks needed to work that out on Alibaba.

Walter
 
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Walter Hay

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Walter,

I received this message from one of my suppliers

"so sorry for being late. Niki told me everything about you. Our team discussed about this issue last night. Cause usaually we ship goods to destinations. Transportation of mass goods by air is rare in our business. And the order quantity makes it more difficult. We need time to calculate the freight. The payment term is 30% at order place, 70% before the goods sent to you. The PI has our A/C number. Before you pay we still have freight issue to be confirmed. I will inform you of the freight later."

I think its safe to say that they have figured out that I am small time. I'm not sure what PI means. I assume a/c is account?

The 30/70 seems about right from what I've read. The main thing I'm questioning is why they seem opposed with shipping by air. I've done a lot of reading and research and it doesnt seem like air shipping is a big deal.

Any light shed on this will be much appreciated. Hopefully this will help a few others as well
It seems to me that they themselves are small time. Shipping by air, whether air courier or air freight is simple.

Although most suppliers can get good air courier rates for you, and it is usually best to get them to organize air couriers, it is generally not a good idea to have your supplier organize air freight. The biggest problem with having them do this is that they will rarely be able to arrange door to door air freight. For that you should get quotes from a local freight forwarder.

When you get those quotes in writing be sure they include all charges from pick up to delivery to your door. That includes customs clearance work, but does not include duty. They pay that for you, but you have to pay them for that.

PI has me stumped, but yes, A/C is account.

Walter
 

Bosstradamus

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It seems to me that they themselves are small time. Shipping by air, whether air courier or air freight is simple.

Although most suppliers can get good air courier rates for you, and it is usually best to get them to organize air couriers, it is generally not a good idea to have your supplier organize air freight. The biggest problem with having them do this is that they will rarely be able to arrange door to door air freight. For that you should get quotes from a local freight forwarder.

When you get those quotes in writing be sure they include all charges from pick up to delivery to your door. That includes customs clearance work, but does not include duty. They pay that for you, but you have to pay them for that.

PI has me stumped, but yes, A/C is account.

Walter
Thanks walter,

Should I get a DHL account I've read that their rates are pretty decent for door to door and they will take care of customs clearance and things of that sort.

@MAFI that's what I thought but it did not fit the context of some of the sentences. Then again english isn't their 1st language

Sent from my SM-G900V using Tapatalk
 
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marklov

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@Walter Hay How much "pennies on the dollar" is considered liquidation price?
 

Walter Hay

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PI means proforma invoice from my experience.
Thanks MAFI, you are quite right. I don't know how I slipped up on that.
Walter
 

Walter Hay

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Thanks walter,

Should I get a DHL account I've read that their rates are pretty decent for door to door and they will take care of customs clearance and things of that sort.

@MAFI that's what I thought but it did not fit the context of some of the sentences. Then again english isn't their 1st language

Sent from my SM-G900V using Tapatalk
You need to negotiate hard if you get a DHL account. Don't accept their first quote because that will probably be schedule rates and they are way too high. You should get a big discount if you promise to be a regular customer. Try 30% or 50%.

Yes air couriers do handle customs clearance and it should be part of their freight charge.

Walter
 
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Walter Hay

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@Walter Hay How much "pennies on the dollar" is considered liquidation price?
I am not really the one to ask, but I have seen claims as low as 5% of retail. When you consider the fact that you can buy regular supplies of product from China at as low as 10% to 20% of retail and have a consistent product line, it hardly seems worth outlaying a lot of cash on a lucky dip, which it seems is what most liquidation businesses offer.

Walter
 

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It seems to me that they themselves are small time. Shipping by air, whether air courier or air freight is simple.

Although most suppliers can get good air courier rates for you, and it is usually best to get them to organize air couriers, it is generally not a good idea to have your supplier organize air freight. The biggest problem with having them do this is that they will rarely be able to arrange door to door air freight. For that you should get quotes from a local freight forwarder.

When you get those quotes in writing be sure they include all charges from pick up to delivery to your door. That includes customs clearance work, but does not include duty. They pay that for you, but you have to pay them for that.

PI has me stumped, but yes, A/C is account.

Walter


yep, ive run into this, getting charges of 100-150 for small samples, (air freight, forward/customs etc...)
 

CommonCents

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Hi Robert,
As a small hint I would mention that when I wanted simple work done, either assembly, minor production, or envelope stuffing for direct mail, I used the services of charities employing intellectually handicapped people. Their work ethic was unbeatable, they were diligent to the point that quality control checks were hardly necessary, and it was a pleasure meeting and talking to them as they enthusiastically went about trying to please me. Depending on the product complexities, some of those people would be capable of checking that the products in your shipment were undamaged, complete, working, and if necessary they could re-pack them.

Walter

i second this, one of my companies was employer of the year for a local special needs employment program. It's fantastic. They drop them off, pick them up and have a supervisor with them at all times. Their wages are subsidized. They are bright, cheery, enthusiastic and do good work. assembling boxes, stuffing envelopes etc... I wish the rest of my employees were as pleasant! I'm sure every decent city has some type of similar program.
 
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CommonCents

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Is there a list of major trade shows for the major outsourcing countries? I can't remember if it was in your book or not. It'd be good to attend a show in person and look for new ideas and make good contacts. There must be a listing somewhere for major industries.
 

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A lot of people are satisfied with small margins, but when running my importing business I guaranteed my franchisees a minimum margin of landed cost X 250%. With freight cost being so high, often equal to the value of the goods, that means buying at a price that was about 1/5 retail. There is a big difference between 3X and 5X, but it can be done if you make sure you are only dealing with the manufacturers, and that mostly (but not always) means using sites other than Alibaba. It can be very hard work to sort out who is a real manufacturer on Alibaba, regardless of what they claim.

My book gives links to sites where you can readily find genuine manufacturers, without the hours, days, or weeks needed to work that out on Alibaba.

Walter

I think I'll buy your book, I think it will answer all of my questions and concerns. Thanks a lot!
 

Walter Hay

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Is there a list of major trade shows for the major outsourcing countries? I can't remember if it was in your book or not. It'd be good to attend a show in person and look for new ideas and make good contacts. There must be a listing somewhere for major industries.
Yes, it's in the book. www.tsnn.com/ There are enough trade shows listed to keep you away from home permanently.

Walter
 
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Walter Hay

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I think I'll buy your book, I think it will answer all of my questions and concerns. Thanks a lot!
Thanks mikeobi, I am sure you will be amazed at what you didn't know but that can make your enterprise easier to operate and more profitable.

It's like people who drive a Hyundai, and have no idea what it is like to drive a Mercedes.

Walter
 

Walter Hay

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Payment Terms:

Today I answered a question via PM and I told the member that this could help many others, so I would post it here.

He asked is it usual to pay by wire transfer, and why not pay by PayPal or credit card. Here is my answer, plus some extra for all my readers:

Most transactions that are less than a few thousand dollars, and even many large ones, are paid by wire transfer.

It is true that there is no protection if you use wire transfer, also known as T/T. Your only protection is due diligence to be sure you are dealing with a genuine supplier, and you must send payment to the business bank account. Sometimes a supplier will ask you to pay by T/T to the owner's personal account. This could be a sign that they are scammers, but that is not necessarily the case.

China's banking system is not very liberated and business people there try every possible way to minimize their bank charges and also their taxes. They may or may not be doing something illegal, and you would offend them deeply if you asked probing questions. Most buyers would take the view that unless they know for certain, it is better to assume the supplier is not breaking any laws.

It is still advisable to check out the company very thoroughly, and make sure the person whose name you are given really is the owner. Over many years of importing I have never been scammed at all, and most of the payments I have made have been via T/T. Maybe 10% of those went to individuals who were the owners of the business.

It is unusual for genuine manufacturers to accept PayPal or CC, but I know of some that do. If the amount is worth it (Over $2,000) you could use escrow.com if the supplier agrees. They are unlikely to agree unless you offer to pay the fees. You could also use a Letter of Credit (L/C).

An L/C has to be arranged and paid for at the time of ordering, and specifies exactly what you are ordering; quantity, quality, value, shipping method, latest shipping date, and anything else you want to insist on.

Once the supplier has exactly fulfilled every item required in the L/C he can present it to his bank and will be paid. If he fails to do exactly as specified, payment will be withheld.

It is usual to require proof of loading on transport, in the form of an Air Waybill for air freight or Bill of Lading for sea shipments. This means that the supplier has to send you the goods and prove it, before he gets paid. This is an unbeatable quality guarantee, because once you have your copy of the Air Waybill or Bill of Lading, you are in possession of a negotiable document similar in legal standing to a bank check. Instead of cash, when you hand it over to the carriers they give you your goods.

If the supplier has sent you sub-standard products you have no legal obligation to pay him by any method at all.

PLEASE NOTE: I am not providing legal advice.
Walter
 

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Hi, Walter. I've been reading this thread and I wanted to buy your book, but when I try to do so with my @gmail and @yahoo addresses, it says "We do not accept registrations from your email domain name. Please use a different email address."

Do you really not accept @gmail and @yahoo addresses or is that a bug? Are there any free email domain addresses you do accept?
 
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Walter Hay

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Hi, Walter. I've been reading this thread and I wanted to buy your book, but when I try to do so with my @gmail and @yahoo addresses, it says "We do not accept registrations from your email domain name. Please use a different email address."

Do you really not accept @gmail and @yahoo addresses or is that a bug? Are there any free email domain addresses you do accept?
That must be a bug. Please email my support team at msteamwebmaster@gmail.com and they should be able to help.

Let me know if you still have problems.

Regards,
Walter
 

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I ended up trying a third email address this, which worked. My first two were <some letters plus last few digits of my last name>@gmail and @yahoo. Then I decided to try a completely different one, <first initial, last name, number>@gmail and it worked. Seems like there's something weird about my main email address that hits your email address validator. I sent the details to your support team. Thanks!
 
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Walter Hay

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I ended up trying a third email address this, which worked. My first two were <some letters plus last few digits of my last name>@gmail and @yahoo. Then I decided to try a completely different one, <first initial, last name, number>@gmail and it worked. Seems like there's something weird about my main email address that hits your email address validator. I sent the details to your support team. Thanks!
Way too technical for me! The main thing is that it worked for you.

Walter
 

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