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

Cruiser

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Sep 28, 2014
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Hi Walter,
We have been working developing our innovative product for a year and a half with a great factory in China. After many rounds of trials, including provisional molds and several samples, we are confident that we are ready for the final mold and start production.
We also believe that if we want to have some kind of contract in place, besides the quote, this is the right time to do so.
How should we approach the issue?
What should we look for in such a contract?
We would really appreciate any advice you can provide.
Thanks!
 

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Walter Hay

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Hi Walter,
We have been working developing our innovative product for a year and a half with a great factory in China. After many rounds of trials, including provisional molds and several samples, we are confident that we are ready for the final mold and start production.
We also believe that if we want to have some kind of contract in place, besides the quote, this is the right time to do so.
How should we approach the issue?
What should we look for in such a contract?
We would really appreciate any advice you can provide.
Thanks!
In my latest book revision I deal with the subject of contracts, and here is a paragraph from
Chapter 12 CULTURAL AND LANGUAGE DIFFERENCES:
"In China, less emphasis is generally placed on the overriding importance of contracts. The relationship itself is far more important than anything written in a formal contract. Unlike in the West, a contract is often regarded as a statement of the best set of circumstances at the time but, should circumstances change, it would be unreasonable for reasonable men with good relations to abide by the original terms of the contract. A contract is seen more as a statement of intent that the parties will work together."

You need to appreciate that enforcement of contracts in China is extremely dificult, in fact near impossible, so the cost of preparing an iron clad contract would rarely be worthwhile.

In Chapter 11. HAVING PRODUCTS MADE TO YOUR OWN DESIGN I deal with your situation, and in particular ensuring that your supplier doesn't use your mold to make a copy of your design for a competitor.

That chapter takes up two pages, but here is probably the most important suggestion: The only sure way to avoid having your supplier use your mold for a competitor is to pay one of the top inspection services to inspect the mold while it is being installed in the injection molding or die casting machine.

It is worth noting something else that I point out in Chapter 12, and that is that even raising the subject of a formal contract can be enough to harm your relationship with your supplier.

Walter
 
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bossnfj

PARKED
Sep 30, 2020
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Philippines
That document has unfortunately been given the wrong title by the compiler. This thread is all about importing, not exporting. A good example of how easy it is to use the wrong terms.

It is also important to note that although it covers most of this thread, it does not tell the whole story. As I wrote in my post #1855 above, many of the older posts are obsolete.

Some may have been brought more up to date when I have answered the same question a second time later in the 6 years since I started the thread, but it is likely that old answers are still all that a search on a subject will find.

In any case, readers should be aware that there is a very important reason why I have revised my book every year. The reason is that the whole sourcing and importing scene changes continually.

Anyone who relies only on the material extracted from the thread by is very likely going to make mistakes that can be avoided by following the information in the latest edition.

Small mistakes can be very costly. One Fastlane member wrote to me saying: "You have saved me 3000USD."

@Brentnal would be doing a bigger service to his readers by deleting his document.

Walter
P.S. Because the updates are so important everyone who buys my book is entitled to a free copy of every revision.
Hello sir,

I appreciate the concern to correct and remind for newbies like me who's looking to enter this business. I am also trying gain knowledge on almost every general processes that in under importing/exporting before deciding to go all in to buy your book and invest every hard earned penny that I have if this is the kind of business that is suitable to my capabilities. Can you suggest a blue print or anything for me on how to should I get this started with? Again, I appreciate the response sir. Good Day
 

Cruiser

New Contributor
Sep 28, 2014
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41
In my latest book revision I deal with the subject of contracts, and here is a paragraph from
Chapter 12 CULTURAL AND LANGUAGE DIFFERENCES:
"In China, less emphasis is generally placed on the overriding importance of contracts. The relationship itself is far more important than anything written in a formal contract. Unlike in the West, a contract is often regarded as a statement of the best set of circumstances at the time but, should circumstances change, it would be unreasonable for reasonable men with good relations to abide by the original terms of the contract. A contract is seen more as a statement of intent that the parties will work together."

You need to appreciate that enforcement of contracts in China is extremely dificult, in fact near impossible, so the cost of preparing an iron clad contract would rarely be worthwhile.

In Chapter 11. HAVING PRODUCTS MADE TO YOUR OWN DESIGN I deal with your situation, and in particular ensuring that your supplier doesn't use your mold to make a copy of your design for a competitor.

That chapter takes up two pages, but here is probably the most important suggestion: The only sure way to avoid having your supplier use your mold for a competitor is to pay one of the top inspection services to inspect the mold while it is being installed in the injection molding or die casting machine.

It is worth noting something else that I point out in Chapter 12, and that is that even raising the subject of a formal contract can be enough to harm your realtionship with your supplier.

Walter
Thank so much Walter for your advice.
It is in line with what I was thinking.
So far they behaved extremely professional with us and we have a very good relationship.
Should we ask them not to use our mold with other clients? Isn't that obvious?
 

Walter Hay

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Thank so much Walter for your advice.
It is in line with what I was thinking.
So far they behaved extremely professional with us and we have a very good relationship.
Should we ask them not to use our mold with other clients? Isn't that obvious?
It is not obvious to Chinese manufacturers. In fact most will sooner or later use your mold for another customer.

If a competitor contacts them with a picture of your product, brand name, or description, the manufacturer will rarely say no.

I would definitely ask them to confirm that your mold will never be used for another customer.

Walter
 
Last edited:

Walter Hay

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Posted today by @Zaent in a new thread with the title: Importing from China - Freight forwarding help required.
"I'm looking to ship heavy fitness equipment to the UK, around 1200kg worth. It's costing me £1500 and the items are about a cubic foot in size (50 of them) - so like 7 cubic feet.

I've seen FOB (free on board) shipping being recommended over CIF and CFR, but it means I have to arrange my own freight forwarder right? (not sure). Does anyone know of a thread where this stuff is explained on the forum, or an article somewhere? I can't find anything that tells me the best ones to use.

Really I'm just wondering what the easiest way to do this is? (as long as it's not ridiculously expensive I don't mind it cutting into margins a bit).

I've heard DDP freight forwarders handle VAT etc and can save me hassle, but I'm not sure how I arrange this.

Do I need to put the freight forwarder in touch with the manufacturer/supplier?

Any help here is greatly appreciated"


First, you need to know that getting DDP terms with a Chinese supplier is very difficult to achieve. The INCOTERM DDP scares them because it imposes on them a lot of risk and uncertainty.

It is much easier and usually less costly to achieve the same result by using a freight forwarder, but don't even consider using a Chinese freight forwarder. There are many freight scams operating out of China. Scams are so common that I devote 3 pages of my book to describing how they work.

Because the UK has its own peculiar problems for importers I recommend engaging the services of a forwarder reasonably close to your port of discharge.

In this thread I have on numerous occasions reminded readers to get a quote including all costs from point of pickup at the supplier's premises to your ultimate point of delivery. That cost will included Customs clearance, but unlike DDP it is paid by your forwarder on your behalf. Then before they will deliver the goods to you they will require you to reimburse them for the duty and VAT paid.

To get an accurate quote you will need to provide details of the product and also weight and dimensions of individual packages as well as weight and dimensions of the total shipment. They will want the pick up address and your delivery address. They will also need to know what unloading capabilities you have at your address. They should recommend which port of unloading should be used.

Be prepared for delays because at present there is quite a backlog of shipping awaiting unloading at UK ports.

As you are a novice at importing I suggest that you read at least the last 20 pages of this AMA, but don't make the mistake of thinking that you will learn all you need to know on the subject. My book is 100 pages and it would be worthwhile for you to look at the contents list on the first page of my MARKETPLACE Walter Hay's Business Books

You might decide that it is a good investment like one forum member who wrote: "You have saved me $3,000."

Even if you don't buy my book I will help you all the way. Just ask any questions here, but if anything is confidential, contact me via PM.

Walter




 

Zaent

New Contributor
Aug 5, 2017
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Posted today by @Zaent in a new thread with the title: Importing from China - Freight forwarding help required.
"I'm looking to ship heavy fitness equipment to the UK, around 1200kg worth. It's costing me £1500 and the items are about a cubic foot in size (50 of them) - so like 7 cubic feet.

I've seen FOB (free on board) shipping being recommended over CIF and CFR, but it means I have to arrange my own freight forwarder right? (not sure). Does anyone know of a thread where this stuff is explained on the forum, or an article somewhere? I can't find anything that tells me the best ones to use.

Really I'm just wondering what the easiest way to do this is? (as long as it's not ridiculously expensive I don't mind it cutting into margins a bit).

I've heard DDP freight forwarders handle VAT etc and can save me hassle, but I'm not sure how I arrange this.

Do I need to put the freight forwarder in touch with the manufacturer/supplier?

Any help here is greatly appreciated"


First, you need to know that getting DDP terms with a Chinese supplier is very difficult to achieve. The INCOTERM DDP scares them because it imposes on them a lot of risk and uncertainty.

It is much easier and usually less costly to achieve the same result by using a freight forwarder, but don't even consider using a Chinese freight forwarder. There are many freight scams operating out of China. Scams are so common that I devote 3 pages of my book to describing how they work.

Because the UK has its own peculiar problems for importers I recommend engaging the services of a forwarder reasonably close to your port of discharge.

In this thread I have on numerous occasions reminded readers to get a quote including all costs from point of pickup at the supplier's premises to your ultimate point of delivery. That cost will included Customs clearance, but unlike DDP it is paid by your forwarder on your behalf. Then before they will deliver the goods to you they will require you to reimburse them for the duty and VAT paid.

To get an accurate quote you will need to provide details of the product and also weight and dimensions of individual packages as well as weight and dimensions of the total shipment. They will want the pick up address and your delivery address. They will also need to know what unloading capabilities you have at your address. They should recommend which port of unloading should be used.

Be prepared for delays because at present there is quite a backlog of shipping awaiting unloading at UK ports.

As you are a novice at importing I suggest that you read at least the last 20 pages of this AMA, but don't make the mistake of thinking that you will learn all you need to know on the subject. My book is 100 pages and it would be worthwhile for you to look at the contents list on the first page of my MARKETPLACE Walter Hay's Business Books

You might decide that it is a good investment like one forum member who wrote: "You have saved me $3,000."

Even if you don't buy my book I will help you all the way. Just ask any questions here, but if anything is confidential, contact me via PM.

Walter




Sincere thanks for replying to this in a detailed way, as well as for the offer to help regardless of my purchase of your book. I'm definitely going to consider it. I was hoping that I could just test the water with a reasonably small order (but it's still relatively big for me), but it seems like it's still not a trivial task and I do need to learn a fair bit more. All three of your books look worthwhile... I need to think that one over.

I've reached out to a freight forwarder in Liverpool and the supplier is considering a DDP quote but, from what you say, it's possible I'll scare them off. I've said that I'm going to try and find my own forwarder but it'll be a few days. Hopefully they don't get annoyed at me taking a while to figure this stuff out.

Feels like I just need a reliable freight forwarder that can take this problem off my hands but it's proving to be tougher to decide that/find one than I expected.
 

Walter Hay

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When importing to the UK, before placing your order you should obtain an EORI which can be done easily online here: Get an EORI number

There are hundreds of freight forwarders in the UK, and I have sent you via PM a link to a site where you can find them listed. It is tedious to use simply because the list is so huge. If you find one located conveniently for you, you will need to search for their website.

Take note of any fractured English in their listing or their website, because you need to have easy communication, so your forwarder should preferably be a native English speaker.

Walter
 

Zaratustra

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Hello Walter, thanks for your posts.
I'm looking for importing kayaks and rafting boats for my company, but have zero knowledge of importing from China. Will your book be relevant for me? considering the fact that I want to import in Georgia (country).
Is there better countries for importing products, such as kayaks, rafting boats, paddles, life-jackets, helmets?
 

Sethamus

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Hello Walter, thanks for your posts.
I'm looking for importing kayaks and rafting boats for my company, but have zero knowledge of importing from China. Will your book be relevant for me? considering the fact that I want to import in Georgia (country).
Is there better countries for importing products, such as kayaks, rafting boats, paddles, life-jackets, helmets?
I would start looking at brands and finding where they are made or find wholesalers that could sell directly to you. I would think, maybe Walter can confirm, that finding a UK or EU manufacturer would be cheaper in the long run due to shipping on the bigger items.
List of UK manufacturers according to top google site I clicked on. Do a search for EU as well.
 

Zaratustra

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@Sethamus Thank a lot.

I do know a manufacturer in Europe, from whom I've bought before, but recently found a rafting boat manufacturer in China, who seems to have a same quality as European one, but 3 times cheaper.
After contacting they send me this invoice with shipping cost:

PI-IL-213312.jpg

For this same amount of products I've paid 2 times more with European manufacturer and 1,5 times more in shipping. This almost falls into "too good to be true". Am I getting scammed?
 

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Sethamus

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If you can potentially save that much then it could be worth it if the quality is there. If you would be making multiple of these orders it wouldn’t hurt to get one sample or (even cheaper option and probably better is to visit the factory). A small wood or plastic product I can have shipped relatively cheaply to me, for something like a kayak and full gear you would be better off visiting or using a sourcing company to ensure you are not getting scammed.
So at this point yes I believe you need to spend the money and buy Walters importing book. If 5k is one order, then his books are cheap compared to making a huge mistake.
 

Walter Hay

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@Zaratustra I'm sorry about being late answering. My internet server has been down.
@Sethamus has given you some good advice.

The freight component of your order seems very reasonable. The inflateable product could cost you less for freight than you would pay for a small shipment of Kayaks. Freight on Kayaks will be charged on the basis of metric tonnes, even though they are light in weight.

To get freight quotes for Kayaks you will need to tell the forwarder the dimensions as well as the weight. They will convert the dimensions to metric tonnes.

Ask the forwarder about paying for a Full Container Load (FCL) even if you only need Less Than Container Load. (LCL) It can save you quite a lot of freight cost to pay for the unused space.

Walter
 

James90

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Hi Walter,

My goods are currently en-route to the port and is ready to be shipped soon.

Thanks to your book, the process was smooth...with some hiccups in-between of course. There's some kinks I'm hoping to clear up so my next transaction can be smoother.

Production of goods was suppose to take 21 days.

After I submitted the first payment term, my supplier notified me due to high demand there will be a 7 day delay.

As production is nearing, it was delay for another 10 days due to weather.. Because my goods require to be dried out before shipping.

I'm wondering was I suppose to or is it common to include the production time (21 days) in the order confirmation?

If so, how could I enforce it if my supplier runs late?


Country of origin is Vietnam.

Appreciate you Walter.
 

Walter Hay

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Hi Walter,

My goods are currently en-route to the port and is ready to be shipped soon.

Thanks to your book, the process was smooth...with some hiccups in-between of course. There's some kinks I'm hoping to clear up so my next transaction can be smoother.

Production of goods was suppose to take 21 days.

After I submitted the first payment term, my supplier notified me due to high demand there will be a 7 day delay.

As production is nearing, it was delay for another 10 days due to weather.. Because my goods require to be dried out before shipping.

I'm wondering was I suppose to or is it common to include the production time (21 days) in the order confirmation?

If so, how could I enforce it if my supplier runs late?


Country of origin is Vietnam.

Appreciate you Walter.
It is customary to nominate the dispatch date in an order confirmation, but if the confirmation takes the form of a Proforma Invoice enforcement is almost impossible.

In fact enforcement is not easy unless the transaction involves payment by way of Letter of Credit (L/C). An L/C will contain every condition of the agreement, including dispatch date.

A well written L/C covers precisely detailed product specifications, quantities, packaging, shipping method and date etc.... etc.... In other words absolutely nothing is assumed, and nothing is expected other than what is in the L/C.

The seller cannot negotiate the L/C with his bank unless every item in it is complied with to the letter.

Walter
 

Boo

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Hi @Walter Hay I bought your fantastic book "Proven Global Sourcing" a few days ago and finished it in only a few sittings. It's incredibly informative and I feel like I've got a step-up already. A couple questions:

1. Do you still recommend Jingsourcing?

2. What countries would you recommend focussing on for silicone products. Think a child pacifier, which would need to be high-quality to prevent health issues.

China jumps out as the obvious solution, but I wonder if prices might be comparable in USA or Germany, which I believe have large silicone industries? My thinking is that China would probably be most likely to work with smaller order quantities, so that's where I'm focussing right now and would likely hire Jingsourcing. But if I'm mistaken and other countries could be a better fit, I'd love to learn more!

Thanks again Walter, your book has flattened my learning curve immeasurably.
 

Walter Hay

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Hi @Walter Hay I bought your fantastic book "Proven Global Sourcing" a few days ago and finished it in only a few sittings. It's incredibly informative and I feel like I've got a step-up already. A couple questions:

1. Do you still recommend Jingsourcing?

2. What countries would you recommend focussing on for silicone products. Think a child pacifier, which would need to be high-quality to prevent health issues.

China jumps out as the obvious solution, but I wonder if prices might be comparable in USA or Germany, which I believe have large silicone industries? My thinking is that China would probably be most likely to work with smaller order quantities, so that's where I'm focussing right now and would likely hire Jingsourcing. But if I'm mistaken and other countries could be a better fit, I'd love to learn more!

Thanks again Walter, your book has flattened my learning curve immeasurably.
1. Yes I still recommend Jing Sourcing. Quite a few book readers have used their services, and there have been no complaints.

Although searching on Alibaba etc is free of charge, and Jing Sourcing will charge you a fee, depending on which of their services you opt for, their reliability and amazing knowledge of the real manufacturing scene in China makes it worthwhile IMO.

2. There is a huge silicone molding industry in China, but until you have dealt with one manufacturer there for some time there is always a question mark over safety issues relating to additives such as plasticisers, colorings and even packaging. Jing Sourcing could avoid those issues for you.

Even so, for total confidence I would look for a Western manufacturer. You will probably save on freight that will compensate to some extent for the higher unit price.

Walter
 

Bigguns50

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Hey @Walter Hay I've been reading a lot on the backlog of ships in Shenzhen and on the States West Coast and the soaring shipping costs. I'm looking at a particular product that would ship from Shenzhen. I have a company that has boots on the ground in China to vet companies for me.

Any 'real world' tips on the current shipping times and costs?
 

Walter Hay

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Hey @Walter Hay I've been reading a lot on the backlog of ships in Shenzhen and on the States West Coast and the soaring shipping costs. I'm looking at a particular product that would ship from Shenzhen. I have a company that has boots on the ground in China to vet companies for me.

Any 'real world' tips on the current shipping times and costs?
In an interview for a recent news article, an importer in the UK said: The six-fold increase in shipping costs is hard to take, especially when getting hold of a container "is like gold dust".

The problem has two sides. Chinese exporters are losing business because of the huge freight costs being quoted to their customers.

The whole situation is really primarily due to shipping companies being opportunists and charging what the market will bear. In effect that means that if importers are desperate enough they will pay whatever price is quoted.

Walter
 

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Bigguns50

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In an interview for a recent news article, an importer in the UK said: The six-fold increase in shipping costs is hard to take, especially when getting hold of a container "is like gold dust".

The problem has two sides. Chinese exporters are losing business because of the huge freight costs being quoted to their customers.

The whole situation is really primarily due to shipping companies being opportunists and charging what the market will bear. In effect that means that if importers are desperate enough they will pay whatever price is quoted.

Walter
This helps. Thank you!!
 

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