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

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Walter Hay

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I'm sorry if this has already been answered (there's a lot of GOLD threads to get through). If a medium to big sized company is selling a product that I want to improve and sell with my label, should I do some digging and try to find their manufacturer for that product? Or will they most likely have an exclusive agreement? There are only 2 companies selling this type of product and they are slightly different
It is very difficult to locate the actual manufacturer of a product that is on sale in the market.

The best method is to use Google images to see if that product is being offered by the manufacturer.

Walter
 

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It is very difficult to locate the actual manufacturer of a product that is on sale in the market.

The best method is to use Google images to see if that product is being offered by the manufacturer.

Walter
What if I found the Bill of Lading on panjiva or portexaminer and saw the name of their manufacturer but the manufacturer doesn't advertise the products I'm looking for. Should I ask to see their catalog or ask specifically for those items?
 
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Walter Hay

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I'm sorry if this has already been answered (there's a lot of GOLD threads to get through). If a medium to big sized company is selling a product that I want to improve and sell with my label, should I do some digging and try to find their manufacturer for that product? Or will they most likely have an exclusive agreement? There are only 2 companies selling this type of product and they are slightly different
It is very difficult to locate the actual manufacturer of a product that is on sale in the market.

The best method is to use Google images to see if that product is being offered by the manufacturer.

Walter
What if I found the Bill of Lading on panjiva or portexaminer and saw the name of their manufacturer but the manufacturer doesn't advertise the products I'm looking for. Should I ask to see their catalog or ask specifically for those items?
I would ask specifically. At least that could tell you whether they have a genuinely exclusive arrangement with the two customers you know of.

You might need to try finding manufacturers who produce items using the same materials and methods used by the one supplying the item you want.

Walter
 

fmob007

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Your book and this thread are a must read for everyone who is looking into importing.

Do you suggest other countries, apart from China, that are competitive in manufacturing real leather bags? Turkey seems a decent choice, especially for someone based in Europe.
 
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Walter Hay

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Your book and this thread are a must read for everyone who is looking into importing.

Do you suggest other countries, apart from China, that are competitive in manufacturing real leather bags? Turkey seems a decent choice, especially for someone based in Europe.
Leather bags are made in many of the countries that I have listed in the 2019 revision, but finding good quality and a reasoanble price will be your challenge.

I have previously found excellent design and quality in Israel and the Czech Republic but I am not aware of pricing.

You will often find such products are made by very small businesses, and even by individuals. You will need to search country by country to get the best deal.

Regarding "real" leather from China. It is not always what it seems to be. Some very good fake leather complete with leather smell (added) is sold as real leather. In some cases the external surface is very thin real leather bonded to plastic imitation leather.

Walter
 

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I got a quote today for a product that I want to import. This guy is obviously a trader, although he seems like a manufacturer with a niched product line. His price is out of this world. I could buy it cheaper on Amazon! The point is he is on the sourcing site for 5 years. So he probably gets enough orders from people who just don't mind getting a second quote. His margins must be stunning. I wonder how many other traders make a killing exploiting these platforms and new importers...
 
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Walter Hay

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I got a quote today for a product that I want to import. This guy is obviously a trader, although he seems like a manufacturer with a niched product line. His price is out of this world. I could buy it cheaper on Amazon! The point is he is on the sourcing site for 5 years. So he probably gets enough orders from people who just don't mind getting a second quote. His margins must be stunning. I wonder how many other traders make a killing exploiting these platforms and new importers...
Thanks for letting everyone know your experience. By reporting what you have found you have probably helped a lot of newbies that believe what they see on the sourcing sites.

Marketing gurus with expensive Amazon courses tell people to look for suppliers with at least a 5 year history, but you have evidence that it's not necessarily the way to find a good supplier.

Traders can on rare occasions offer a good price, but manufacturers serious about exporting will beat them by a big margin.
Rep+

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personallegend

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Hi Walter,
Thanks so much for the insightful and valuable information on this thread. I have read your informative book as well and am already tuning my eye to watch out for those deceptive agents pretending to be manufacturers!

Sorry if this has been asked before (I am on page 22 on this thread and slowly making my way through it) but, how can you tell from inspection reports if a supplier is in fact a manufacturer? For example, I am looking at a SGS report and under Company Type, it gives 4 options: Manufacturer, Combined, Trading Company and Group Company. Are they a real manufacturer only if they have the Manufacturer box checked off? What does Combined and Group Company mean?

Also, I have a red flag going off since under Production Capacity of the report, it mentions Own Brand, ODM and OEM with 32 R&D staff but no mention of actual output production quantities. Am I correct in thinking that this might not be a manufacturer?

Thank you in advance!!
 
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Walter Hay

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@personallegend, It's good to be skeptical, but only the option: "Trading Company" makes it certain that the supplier is not a manufacturer.

It is by far the best if only "manufacturer" is ticked, but there are many companies in China that are jointly owned, or so closely aligned with a manufacturer that they are as good as being the manufacturer. These would often be covered by the term: Group Company.

Combined means they manufacture and trade, so there is always the possibility that they don't manufacture the product you are looking at.

If the SGS report says they have 32 R&D staff, they would in almost every case be manufacturers. There might be rare exceptions when a well established trader specializes in a certain product type, but like many Fastlane members they have found a good market for products that they improve.

Walter
 

khai

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Hi im from Singapore..joined this forum few years back but got distracted with life.I can now say im in a better position to pursue this area.Just wanna say im not even half way through the entire thread and im learning so much. Also bought the ebook. Have yet to receive it but ill wait awhile longer,cant wait to dig into that. Dropping by to say thanks for all the valuable golden nuggets.
 

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Walter Hay

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@khai, Sorry about the delay in sending the books. My son in law who handles the sales and administration had a small family drama that kept him offline for a day.

I checked with him and he tells me he has sent them to you.

I hope you get great benefit from them and get to build a successful business.

Walter
 

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Hey Walter, hope you're doing well.

I haven't had to this thought until now, but do manufactuers use a client's molds/sell your product themselves? How do I avoid that from happening?
 
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Walter Hay

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Risks Involved In Paying For a Mold In China.
@mikeobi, I have more to say on that subject in my labeling book than I do in the importing book, but very briefly the answer is YES.

If your mold has your logo in it as an integral part of the mold, they can't use it for others. The problem with that is that they can tell you it is part of the mold, when they have in fact cheated by using an insert with your logo on it.

That makes it possible for them to remove your insert and replace it with either a blank insert, or one with someone else's logo. In effect you have paid for a mold that will be used by/for a competitor.

The only solution is to pay for an inspection service to check that it has your logo embossed or debossed as part of the mold. For that to work you will need to inform them of your intention before they make the mold. That will add a few hundred dollars to your mold cost.

Walter
 
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Walter Hay

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Hi Walter, I am in talks with a Chinese supplier to import $6000 of goods, including freight costs.

They told me it’s a ‘door to door service via sea freight but not DDP because they don’t know Australia’s duties’. He said it’s DDU.

He explained to me the process:

1. I pay for the order
2. They’ll produce and send to Australia
3. They pay duty and taxes and clear customs
4. They invoice me for the duties and taxes
5. I pay that
6. They deliver to my door after I pay

Does this sound right?

Thanks in advance!
Edit: I called a few government bodies, custom brokers and clarified with my supplier today and found out the following:

- Supplier will deliver door to door via sea freight
- Upon arrival, their agent will pay duties/tax and clear customs on my behalf
- They will contact me to authorise them to clear customs on my behalf
- They will then invoice me the duties/tax
- Once I reimburse them, they will deliver to my door

Hope that helps for anyone wondering the same thing. Cheers.
 
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Walter Hay

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Edit: I called a few government bodies, custom brokers and clarified with my supplier today and found out the following:

- Supplier will deliver door to door via sea freight
- Upon arrival, their agent will pay duties/tax and clear customs on my behalf
- They will contact me to authorise them to clear customs on my behalf
- They will then invoice me the duties/tax
- Once I reimburse them, they will deliver to my door

Hope that helps for anyone wondering the same thing. Cheers.
Your original post with your question has vanished from the thread, but I found it among the notifications in my email inbox!

What you have been told is exactly how it should work.

Walter
 

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Hi all, just curious if anyone has experience with importing machinery? I have a family member that is looking to upgrade a "clicker press" die cutter to a rotary die cutter with an automatic feed.

He is looking at importing one to Australia from China in the 5k to 15k range. Anyway, I think he has a lot more work to do in researching exactly what type he needs as there is so many models, but I was curious as to whether there may be a better place to look than China for importing these industrial kind of machines.
 
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Walter Hay

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There should not at this stage be any problems in importing such a product.

It would probably have to be packed in a wooden crate, and the crate has to pass inspections by AQIS. Time and cost can be saved by having an appropriate certificate prepared to accompany the shipment.

Fumigation may or may not be necessary, so you should consult a Customs agent in Australia about that.

Walter
 

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There should not at this stage be any problems in importing such a product.

It would probably have to be packed in a wooden crate, and the crate has to pass inspections by AQIS. Time and cost can be saved by having an appropriate certificate prepared to accompany the shipment.

Fumigation may or may not be necessary, so you should consult a Customs agent in Australia about that.

Walter
ok great, yeah he has a broker etc that will do that for him. I just wasn't sure if industrial equipment like that was best sourced from China, but it does seem like it.
 

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Walter Hay

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It could be worth searching in Vietnam where Chinese manufacturers have been steadily transferring their production lines over the past 5 or 6 years.

Walter
 

Blackman

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A question for those who are outside the US and you buy stock from China or anywhere else for that matter, probably in US dollars, but you sell the products at home in your own currency, which in my case is UK pound sterling.

At the moment, I've simply got a multi-currency Paypal account with USD and GBP balances, so the stock is bought using the USD balance and the GBP balance is topped up when I get sales from customers in the UK.

Then when I need to re-stock, I use Paypal's currency converter to convert some of my GBP balance into USD, so I'll have enough money to buy more stock.

Something tells me this is not exactly the ideal way to do it, as I'm possibly losing out on balance conversions or Paypal charging me fees?

What's the best way of doing this when you buy stock in one currency, but sell it in a different currency at home?

Thanks
 
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Walter Hay

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Because you receive your proceeds of sales in GBP, you are going to suffer currency conversion rates no matter what you do.

If you use your PayPal balance to pay for purchases, you can do that without previously converting your GBP to USD. THis will at least simplify the process for you.

You could ignore the fact that your balance is in GBP and enter the USD amount in the payment field.

PayPal will do the conversion to USD at their current daily rate and will send to your supplier for their usual fee.

Have you considered selling on Amazon USA? If so I can give you a link that well help you learn to do it. That will give you USD income.

Walter
 

Blackman

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Thanks Walter, I guess there's not much that can be done regarding the currency differences.

As for selling on Amazon US, I wouldn't be interested in that the moment. My focus currently is on eBay UK and then possibly my own e-commerce store, so don't have Amazon in my plans for the foreseeable future.
 

avandelay

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I placed an order on Alibaba ($1000 item, $650 shipping) via their trade contract system, and specified DDP which the seller approved and I then sent payment via CC. I specified DDP because the seller mentioned using FedEx in their email.

A week later I asked for tracking and they sent an Air China waybill, said they overlooked the DDP part and already shipped it and I had to pick it up myself and handle customs.

Long story short it cost several hundred dollars in broker fees and travel, plus took 8 hours start to finish to pickup the item.

How good is Alibaba at mediating disputes, or should I go straight to my card issuer?
 

LPPC

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A box sealed in the way you illustrate should keep out the humidity.

If the glass transition level is in fact 45 degrees Celsius it would need insulation or refrigeration if there was a risk of reaching that temperature. If, as I believe to be the case, glass transition level is 60 degrees Celsius there should be no cause for concern unless the package was in something such as a closed vehicle in which temperatures can reach 50 to 60 degrees.

Walter
Hello Walter,

I have asked you this question a while ago, whether there would be a good chance that a product made of PLA would be deformed because of the heat during a train or sea shipment (glass transition level of 60 degrees celsius). You said that there would be no cause for concern unless the package was in something such as a closed vehicle.

Do you consider normal LCL containers for sea shipment to be a ''closed vehicle'' as you worded it?
I have called my sea forwarder and they said that I could not choose a different container for normal LCL shipments. The container is not fully sealed he said, so some air slips through, but there is no LCL container which has some sort of holes or gapes specifically made for ventilation.

The shipment will be shipped via sea beginning of June 2019 from China to The Netherlands. I have done some research and it appears that sea temperatures almost never go above 35 degrees Celsius if I'm not mistaken.

Thank you!
 
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Walter Hay

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In a study carried out by a manufacturer of desiccants, which are used to absorb humidity, it was found that temperatures in containers at sea rarely fluctuate, and humidity remains low.

The situation is different on land, and summer time temperatures inside a container can reach quite high temperatures.

However, in the test shipment from Japan to the Netherlands the temperature inside the container once on land at destination did not rise above 36°C.

Humidity was low while at sea , but rose as high as 90% on land.

My conclusion would be that it would be a good idea to pack and seal the package as completely as possible, and as an added precaution include desiccants inside the outer package.

Walter
 

Blackman

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I placed an order on Alibaba ($1000 item, $650 shipping) via their trade contract system, and specified DDP which the seller approved and I then sent payment via CC. I specified DDP because the seller mentioned using FedEx in their email.

A week later I asked for tracking and they sent an Air China waybill, said they overlooked the DDP part and already shipped it and I had to pick it up myself and handle customs.

Long story short it cost several hundred dollars in broker fees and travel, plus took 8 hours start to finish to pickup the item.

How good is Alibaba at mediating disputes, or should I go straight to my card issuer?
Good thing that you placed the order through Alibaba, rather than directly with the supplier. That's not to say that Alibaba are amazing at solving disputes, but at least you've got all the records on Alibaba to prove your point.

Needless to say, before placing any large orders in the future, you should always place a few small orders with your manufacturer/supplier first to "feel them out", and then when you have confidence in dealing with them, you can place orders for 4 figures and above...

Have you tried resolving this directly with the supplier? It obviously cost them less to send the shipment to you via Air China, than it would have with Fedex.

If it's a genuine company, then I see no problem in them partially refunding the shipment cost, which would hopefully cover your expenses?

Also I wouldn't trust a supplier with paying my duties/tax, because these are applied by the receiving country, so I struggle to see how the supplier would know the amounts due to be paid and charge you in advance for it...

You should always get quotes as DDU (delivery duty unpaid).

If I've missed something, I'm sure Walter will correct me.
 

avandelay

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Good thing that you placed the order through Alibaba, rather than directly with the supplier. That's not to say that Alibaba are amazing at solving disputes, but at least you've got all the records on Alibaba to prove your point.

Needless to say, before placing any large orders in the future, you should always place a few small orders with your manufacturer/supplier first to "feel them out", and then when you have confidence in dealing with them, you can place orders for 4 figures and above...

Have you tried resolving this directly with the supplier? It obviously cost them less to send the shipment to you via Air China, than it would have with Fedex.

If it's a genuine company, then I see no problem in them partially refunding the shipment cost, which would hopefully cover your expenses?

Also I wouldn't trust a supplier with paying my duties/tax, because these are applied by the receiving country, so I struggle to see how the supplier would know the amounts due to be paid and charge you in advance for it...

You should always get quotes as DDU (delivery duty unpaid).

If I've missed something, I'm sure Walter will correct me.
Thanks. Turns out their proforma invoice specifically said FedEx as the shipper. If a seller ships FedEx air freight from China, does FedEx automatically handle the customs brokering, or does a certain FedEx product have to be ordered that gets it to your door vs picking up at a terminal and handling customs on your own?

One thing I learned is that especially now with the US tariffs it's very important to get the proper HTS code - some are subject to the tariff and some are not. When all was said and done there was the HTS code the seller provided that was inaccurate, the one that I and CBP agreed better described the item but was subject to the tariff and made the item ineligible for informal entry, and then one that the customs broker I had to hire found that best described the item and was not on the Section 301/25% tariff list.

This order was for one piece :/ it's a bulky item and China is the only source for it. I can see what you're saying to order something different that's smaller as a test before doing a larger order such as this. The seller seems legit and the quality on the item is good, but they don't want to part with any money to make this right.

The seller's initial offer when I told them I had to spend 8 hours getting the item and $200 in money out of pocket was that they'd send me $100. Told them thanks but no thanks, escalated to Alibaba, and if they're no help I'll dispute on the CC. I'm asking for a lot more - I don't work for free and if they had performed as on the contract, or let me know before shipping it that they couldn't I wouldn't be having this issue. We'll see where it goes.
 
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Walter Hay

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I will number the points so that my answer will be easier to follow. @Blackman has given an excellent answer, but from my experience I am less optimistic about your chances of success.
Thanks. 1. Turns out their proforma invoice specifically said FedEx as the shipper. 2. If a seller ships FedEx air freight from China, does FedEx automatically handle the customs brokering, or does a certain FedEx product have to be ordered that gets it to your door vs picking up at a terminal and handling customs on your own?

3. One thing I learned is that especially now with the US tariffs it's very important to get the proper HTS code - some are subject to the tariff and some are not. When all was said and done there was the HTS code the seller provided that was inaccurate, the one that I and CBP agreed better described the item but was subject to the tariff and made the item ineligible for informal entry, and then one that the customs broker I had to hire found that best described the item and was not on the Section 301/25% tariff list.

4. This order was for one piece :/ it's a bulky item and China is the only source for it. I can see what you're saying to order something different that's smaller as a test before doing a larger order such as this. 5. The seller seems legit and the quality on the item is good, but they don't want to part with any money to make this right.

6. The seller's initial offer when I told them I had to spend 8 hours getting the item and $200 in money out of pocket was that they'd send me $100. Told them thanks but no thanks, escalated to Alibaba, and if they're no help I'll dispute on the CC. I'm asking for a lot more - I don't work for free and if they had performed as on the contract, or let me know before shipping it that they couldn't I wouldn't be having this issue. We'll see where it goes.
1. The Proforma Invoice, together with the Air Waybill should be sufficient proof that you have not received what was promised. I hope I am wrong, but in such situations Alibaba are little help. Whatever you do, you must do it quickly, otherwise Alibaba will forget about it.

2. FedEx shipments are automatically cleared by FedEx, and the clearance work, which should only take them a few seconds, is included in the freight charge.

My book explains in detail the difference between air freight and air courier. This, together with advice on how to avoid freight scams has saved many people thousands of dollars. You might find the cost a good investment before placing your next order.At least read through this thread.

3. If the supplier had used FedEx or if you had used a freight forwarder you would not need to bother knowing what the HS code is. Your experience has highlighted the fact that choosing the right code can be very hit and miss, with costly consequences if you get it wrong.

4. @Blackman was referring to the large value of the order, not the large size of the product. Always start with small orders.

5. You need to learn how to tell if the seller really is legit. Don't believe what you read on Alibaba.

6. This is possibly the most important part of your post. My answer is that I would immediately ask my bank for a chargeback on the CC. This is because I think you will find that both the seller and Alibaba will make your claim drag out until you tire of it and give up, or until Alibaba says the time for lodging your claim, proof, answers to their questions etc., has expired. Either that or Alibaba will say that you don't have sufficient proof. They are a law unto themselves. Their word is final.

Sorry to be the bearer of bad news.

Walter
 

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