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

[Walter Hay]

GREETINGS for Chinese New Year

Don't forget to send greetings to your contacts prior to the Chinese New Year. It is a good idea to express your appreciation for the way they deal with you. Think of something relevant to your circumstances, such as "your prompt service", or "your answers to my questions", or "for always keeping me informed of progress" etc.

It can also help to say something reassuring about continuing your business relationship.

Do It Now, or at least no later than Jan 20th.

Walter

 

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[Walter Hay]

Import duties? No Worries.

Why worry about the possibility of duties increasing? We are in a world where competition is an everyday experience for those operating a business.

All businesses incur costs, and customs duty is one of those costs.

Your competitors are in business, so they also incur costs, including duty.

Does payment of duty therefore make competition more difficult? No – not unless your competitors cheat and somehow evade duty.

When I began importing, duty rates ranged from the occasional low 5% (unusual) to a high of over 40%. That didn’t stop me from outselling my competition, among whom were some who cheated.

I know that at first when duty is increased and prices increase as a result, there will be some customer resistance, but customers do get used to the change. If selling B2C you can gradually increase prices to compensate for the higher duty, taking a profit cut while getting back to your usual margin. If selling B2B that can be a little more difficult, but your business customers will be paying more for everything that has a duty component. If they also are selling things that have a duty component they will also be increasing prices.

Stop worrying. Get on with running your business.

Walter

 

[Ryan Wolf]

When a listing from a Chinese manufacturer on AliExpress says it has free shipping to United States, is it actually free? Or am I still responsible for any sort of fees? Am I responsible for shipping it from where it lands in the US the rest of the way to me? Thanks!

 

[Walter Hay]

When a listing from a Chinese manufacturer on AliExpress says it has free shipping to United States, is it actually free? Or am I still responsible for any sort of fees? Am I responsible for shipping it from where it lands in the US the rest of the way to me? Thanks!

It depends on the value of the shipment and the method of shipment.

If the supplier is offering free shipping that almost always means they will use China Post. Their rates are subsidized by the government, so they can afford to offer "free shipping." Of course the cost is included in their price anyway. Because Aliexpress is a retail site, you will be paying retail. Most such small shipments don't attract duty or taxes, and the package is delivered to you without any fuss.

You should search through this thread for warnings about signing for and opening packages. PayPal protection is not always available. Include PayPal in your search.

In the unlikely event that they are shipping via air courier, it is a different matter. If it is small in value, under $2500, and is shipped via air courier the shipment will be cleared by the courier as part of their delivery fee. They will pay any duty and taxes on your behalf. They will then ask for reimbursement on or before delivery, depending on which courier it is, and then they deliver.

Above that amount it will require a formal customs entry, and clearance costs will be higher because you will have to pay a Customs broker.

Walter

 

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[Ryan Wolf]

It depends on the value of the shipment and the method of shipment.

If the supplier is offering free shipping that almost always means they will use China Post. Their rates are subsidized by the government, so they can afford to offer "free shipping." Of course the cost is included in their price anyway. Because Aliexpress is a retail site, you will be paying retail. Most such small shipments don't attract duty or taxes, and the package is delivered to you without any fuss.

You should search through this thread for warnings about signing for and opening packages. PayPal protection is not always available. Include PayPal in your search.

In the unlikely event that they are shipping via air courier, it is a different matter. If it is small in value, under $2500, and is shipped via air courier the shipment will be cleared by the courier as part of their delivery fee. They will pay any duty and taxes on your behalf. They will then ask for reimbursement on or before delivery, depending on which courier it is, and then they deliver.

Above that amount it will require a formal customs entry, and clearance costs will be higher because you will have to pay a Customs broker.

Walter

Awesome, thanks. I don't plan to use AliExpress but while browsing through products, I saw the free shipping being advertised on a big item and was intrigued. I will definitely keep reading this thread. Good to know about air courier vs China Post. Thank you!

 

[petkovic]

Walter,

I just wanted to drop by and say that I have now imported small quantities by air and am in the process of negotiating a sea shipment.

Thanks to your advice and that of many others here, I am able to talk intelligently with suppliers, freight forwarders, customs agents, etc. and people are taking me seriously at least 90% of the time.

Therefore: Thanks!

 

[Altraxx]

Hi Walter,

I feel much more confident dealing with my suppliers while reading this great thread! Thank you for that.
A question tho,
I still communicate with my suppliers using the Alibaba communication center. Recently a new supplier stated that he would like to have my email adres so he could email my directly. It's much easier he says... I am a little suspicious about this.
It's probably easier to file a complaint about the supplier to alibaba when your using their communication center?

Altraxx

 

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[DBXI]

Before I used to give them my email address but that got bombed with spam real quick. Now I only give them my email address once I have established they are someone I want to work with. That's only after I have vetted them in regards to price, trader / manufacturer, responsiveness, sometimes even after samples.

 

[Walter Hay]

Hi Walter,

I feel much more confident dealing with my suppliers while reading this great thread! Thank you for that.
A question tho,
I still communicate with my suppliers using the Alibaba communication center. Recently a new supplier stated that he would like to have my email adres so he could email my directly. It's much easier he says... I am a little suspicious about this.
It's probably easier to file a complaint about the supplier to alibaba when your using their communication center?

Altraxx

Before I used to give them my email address but that got bombed with spam real quick. Now I only give them my email address once I have established they are someone I want to work with. That's only after I have vetted them in regards to price, trader / manufacturer, responsiveness, sometimes even after samples.

Dealing with suppliers outside the Alibaba sytem is always risky. If you have been able to absolutely verify their credentials and you really do want to work with them, that's OK, but I am still suspicious of any supplier wanting to deal outside the system.

The only cost to suppliers is their listing and Gold Supplier badge cost. They don't pay any extra for transactions, so why do they want to avoid Alibaba?

Regarding email addresses, always use disposable addresses when making inquiries on any B2B site, otherwise your inbox will be flooded with spam.

Walter

 

[JayTGold]

I know its already been said before on this thread, but I just want to reiterate that Walter Hay is an awesome individual and his book is gold. Dont hesitate to buy it. Amazing reference from a real master. Walter actually took the time to guide me through some data I was unclear about, something he didnt have to do. Thanks to his help and his book I was able to vet a bunch of suppliers confidently and now Im about to recieve my first product shipment next week. Ill update as the business moves along. Very excited. Thanks Walter....youre the man!

 

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[motosnipe]

Wish I had registered earlier! would love to have a copy of that book. Definitely going to continue following this thread. Seems to be a wealth of knowledge.

 

[petkovic]

Wish I had registered earlier! would love to have a copy of that book. Definitely going to continue following this thread. Seems to be a wealth of knowledge.

It's only a couple clicks and a rough 100$ away

It pays for itself with the first dumb thing you don't do because you read it

 

[DBXI]

It's only a couple clicks and a rough 100$ away

It pays for itself with the first dumb thing you don't do because you read it

I would echo this. It serves as a great primer for getting into the import game. Knowing how to "communicate" and speak their business language is critical and I feel Walter's book does a great job in going into those details. One of the biggest takeaways for me was picking up on Walter's tactics for testing products in small "sample orders". Also the validation on the "other" b2b sites was good to see.

 

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[Joao PS]

Hi everyone. I am dealing with some Alibaba suppliers to find the best price to my business.
As Walter said, almost always the chinese suppliers give some misunderstanding information.
But what happened is: I quoted freight costs with 10 different suppliers via Air Courier (China -> Brazil). Some of them gave me the price of USD 21, and others the price was USD 168. I am getting crazy with this. I mean, HOW is it possible the same freight type have so different prices?
I feel they are hiding some cost from me, even when I ask a lot of times "Is it the final price? Is there some kind of extra tax?"

Someone can give me a hint here?

 

[Walter Hay]

Hi everyone. I am dealing with some Alibaba suppliers to find the best price to my business.
As Walter said, almost always the chinese suppliers give some misunderstanding information.
But what happened is: I quoted freight costs with 10 different suppliers via Air Courier (China -> Brazil). Some of them gave me the price of USD 21, and others the price was USD 168. I am getting crazy with this. I mean, HOW is it possible the same freight type have so different prices?
I feel they are hiding some cost from me, even when I ask a lot of times "Is it the final price? Is there some kind of extra tax?"

Someone can give me a hint here?

Brazil has its own peculiar difficulties for importers. You shouldn't try importing there without getting a customs broker to do the entry for you, even if using air couriers who, in most other countries automatically handle the clearance for you as part of the freight charge. Some of the higher quotes might include those customs clearance costs.

You need to get quotes for door to door delivery including customs clearance. Ask your suppliers to quote on that basis.

In your situation I would contact the local office of each of the air couriers and request such a quote. I would also ask local freight forwarders to quote. The Canadian Trade Commission has one of the best listings of forwarders there: List of Freight Forwarders, Customs Brokers and Shipping Companies. Get it in writing. You will be paying duty in Brazil, so ask them to estimate duty, or to tell you what is the duty rate.

If you handle the shipping yourself, your order will be on an EXW basis, although most suppliers in China will call that FOB their factory. Ask the suppliers to quote you on that basis as well as for door to door.

To get the quotes in Brazil you will need: Product description. Package size: height, width, depth. Package weight. Pick up location. Delivery address.

Let me know if you need more help, but don't place your order until you get this all sorted out.

Walter

 

[Joao PS]

Brazil has its own peculiar difficulties for importers. You shouldn't try importing there without getting a customs broker to do the entry for you, even if using air couriers who, in most other countries automatically handle the clearance for you as part of the freight charge. Some of the higher quotes might include those customs clearance costs.

You need to get quotes for door to door delivery including customs clearance. Ask your suppliers to quote on that basis.

In your situation I would contact the local office of each of the air couriers and request such a quote. I would also ask local freight forwarders to quote. The Canadian Trade Commission has one of the best listings of forwarders there: List of Freight Forwarders, Customs Brokers and Shipping Companies. Get it in writing. You will be paying duty in Brazil, so ask them to estimate duty, or to tell you what is the duty rate.

If you handle the shipping yourself, your order will be on an EXW basis, although most suppliers in China will call that FOB their factory. Ask the suppliers to quote you on that basis as well as for door to door.

To get the quotes in Brazil you will need: Product description. Package size: height, width, depth. Package weight. Pick up location. Delivery address.

Let me know if you need more help, but don't place your order until you get this all sorted out.

Walter

Walter, thanks a lot! You add a lot of value here for free, its a wonderful attitude.
I did what you said, I called DHL, UPS, FedEx and TNT (Brazilian offices) and asked to quote the freight cost. The prices were between USD 100-200, and then I asked how could a supplier offer a freight via air courier charging only USD 21. The answer was "probably he has a good flow with the company and has a lot of discounts). I don't know... I mean, if I have to pay USD 100+ in freight my margin would be appreciably decreased, but still would have +250% of profit, as you said as the minimum. The issue would be selling to B2B :/

Thank you again!!

EDIT: let me tell you my idea...
I was thinking in, for example:
Order 200 pieces by air to have in stock, paying USD 1,5 in freight per piece. = USD 300 in freight

Order 1000 pieces by sea to increase my margin and reduce freight costs, paying USD 0,2 (I don't know how exactly is, but I think its very very cheaper) = USD 200 in freight

Total freight = USD 500 by 1200 pieces
500/1200 = USD 0,4 per piece in freight.
It would be a way to reduce my costs in the long term.
What do you think about?
Thx

 

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[Walter Hay]

Walter, thanks a lot! You add a lot of value here for free, its a wonderful attitude.
I did what you said, I called DHL, UPS, FedEx and TNT (Brazilian offices) and asked to quote the freight cost. The prices were between USD 100-200, and then I asked how could a supplier offer a freight via air courier charging only USD 21. The answer was "probably he has a good flow with the company and has a lot of discounts). I don't know... I mean, if I have to pay USD 100+ in freight my margin would be appreciably decreased, but still would have +250% of profit, as you said as the minimum. The issue would be selling to B2B :/

Thank you again!!

Nobody gets discounts that high on freight. For good customers the discount can be as high as 75%, and for ones with a small level of business 50% is common. You should bargain with your local office, but don't forget to make sure the amount quoted includes all customs clearance work.

You will still have the additional duty and tax to pay, but if you don't have the issue of clearance cost sewn up you could be hit with a big bill just for that.

There are ways to get lower cost freight by using a freight consolidator who is willing and has the system in place to last minute load your parcel in an air container that he has already paid for and still has empty space. They would need to have a warehouse in China, and not many Brazilian consolidators would have that. Note: This method is slower than couriers and could take an extra week or two.

I know I am laboring the point, but costs at the port of landing can be extremely high (especially Brazil) so you must be sure whatever freight provider is handling your cargo has included those costs in their quote.

Walter

 

[Joao PS]

Nobody gets discounts that high on freight. For good customers the discount can be as high as 75%, and for ones with a small level of business 50% is common. You should bargain with your local office, but don't forget to make sure the amount quoted includes all customs clearance work.

You will still have the additional duty and tax to pay, but if you don't have the issue of clearance cost sewn up you could be hit with a big bill just for that.

There are ways to get lower cost freight by using a freight consolidator who is willing and has the system in place to last minute load your parcel in an air container that he has already paid for and still has empty space. They would need to have a warehouse in China, and not many Brazilian consolidators would have that. Note: This method is slower than couriers and could take an extra week or two.

I know I am laboring the point, but costs at the port of landing can be extremely high (especially Brazil) so you must be sure whatever freight provider is handling your cargo has included those costs in their quote.

Walter

Thanks again Walter.

Brazil has protectionist laws that are very stupid, we have to pay 100% in tax to import something. I am thinking in send the products to Uruguay (neighbor of Brazil) which has better taxes and then bring it to BR. Just thoughts..

 

[Alveko]

Hi Walter,

Thanks for the AMA and all of the helpful info you've posted up to this point. (I have purchased your book back in 2015 but haven't taken the steps in the importing field until now)

Here's the deal; I will be ordering 1000 units with my supplier within the next few days, but I was having some doubts on one thing in particular.

As my first total order will amount to less than $5000 total, my contact told me they will charge me an additional $200 for the LCL handling, to pay customs.
This sounded pretty reasonable to me, but when I asked whether or not it would be possible to have 200 units (of the total 1000) get shipped by air courier and the other 800 the 'standard' LCL way so I can get started faster, she added that while that they could do that, they would need to charge an additional $200 as the shipment ultimately gets split into 2 parts (so a total of $400 extra for handling; $200 for the 800 units by LCL + $200 for the 200 units by air courier.)

Is this the way things work? I mean, it's more than fair to charge for the LCL handling, but getting that same fee for the air courier services as well seems a bit off to me.

Thanks again!

 

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[Walter Hay]

Hi Walter,

Thanks for the AMA and all of the helpful info you've posted up to this point. (I have purchased your book back in 2015 but haven't taken the steps in the importing field until now)

Here's the deal; I will be ordering 1000 units with my supplier within the next few days, but I was having some doubts on one thing in particular.

As my first total order will amount to less than $5000 total, my contact told me they will charge me an additional $200 for the LCL handling, to pay customs.
This sounded pretty reasonable to me, but when I asked whether or not it would be possible to have 200 units (of the total 1000) get shipped by air courier and the other 800 the 'standard' LCL way so I can get started faster, she added that while that they could do that, they would need to charge an additional $200 as the shipment ultimately gets split into 2 parts (so a total of $400 extra for handling; $200 for the 800 units by LCL + $200 for the 200 units by air courier.)

Is this the way things work? I mean, it's more than fair to charge for the LCL handling, but getting that same fee for the air courier services as well seems a bit off to me.

Thanks again!

They will have to prepare another set of documents to export the air courier shipment, but most suppliers wear that cost because there is so little involved in them doing it. I would ask them if they would share that cost with you, but don't pin your hopes on it.

Remember that the Chinese approach is usually to extract every extra cent they can from every transaction. (And I mean cents - not just dollars!)

Walter

 

[SeriousAction!]

Hey Walter,
Just wanted to thank you for your time and information provided on this thread. Certainly has answered a lot of questions now to further expand on this knowledge will be buying your book, and in the near future posting of success with knowledge gained from this forum And hopefully giving back something of my own.

 

[Walter Hay]

Hey Walter,
Just wanted to thank you for your time and information provided on this thread. Certainly has answered a lot of questions now to further expand on this knowledge will be buying your book, and in the near future posting of success with knowledge gained from this forum And hopefully giving back something of my own.

I hope all goes well for you. Don't forget that users of my book can get support from my (Jim Cockrum's) support team using the link in the book.

Walter

 

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[Garrett Johnson]

Hello Walter, thank you for all of the information you put into this thread, it's been very helpful. You definitely are one of the most knowledgeable people I've found about importing from China.

I am starting a physical product business and currently talking with manufacturers. I ordered samples from one and very satisfied with the quality, but there are some details that make me weary of using them. They only have 1 year on Alibaba and 2 transactions totaling $3k+ in the past 6 months and a few other details but I won't post it all here. They seem legit overall but could be a trading company.

 

[Walter Hay]

Hello Walter, thank you for all of the information you put into this thread, it's been very helpful. You definitely are one of the most knowledgeable people I've found about importing from China.

I am starting a physical product business and currently talking with manufacturers. I ordered samples from one and very satisfied with the quality, but there are some details that make me weary of using them. They only have 1 year on Alibaba and 2 transactions totaling $3k+ in the past 6 months and a few other details but I won't post it all here. They seem legit overall but could be a trading company.

Send me a PM with the details and I will check them out for you.

Walter

 

[Red]

Hey Walter-

I just finished your book (awesome resource, btw, very worth the money -thanks for putting that together) & have a question that might help others in my shoes:

My product is an improvement on an existing product that's in almost every household in some form in this country. The good news is that I've found 3 foreign & 1 domestic manufacturer that (seem) legit & make the product with a multitude of options for me to select from -perfect. The one caveat is that I have changed one piece of the product & will need to make a custom mold to complete an actual working prototype.

Obviously, making the mold is an investment out of pocket & up front. Since I can't get a true & complete prototype of my product without that mold, how do you suggest I got about vetting the manufacturer I want to work with seeing as I want to make sure they're legit before coming out of pocket to create a mold? And if I make a mold with a manufacturer in China, is it my property? Or theirs? And what happens to it if I need to part ways with that particular manufacturer? I feel like I'm in a catch-22 at this juncture..... I need to make a mold to proceed with the product.... but I need to vet the quality of the product/manufacturer before I pay out of pocket for a mold.... so yeah.

Any insight you have is much appreciated, as I'm not sure how to proceed from here.

Thank you!

 

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[Walter Hay]

Hey Walter-

I just finished your book (awesome resource, btw, very worth the money -thanks for putting that together) & have a question that might help others in my shoes:

My product is an improvement on an existing product that's in almost every household in some form in this country. The good news is that I've found 3 foreign & 1 domestic manufacturer that (seem) legit & make the product with a multitude of options for me to select from -perfect. The one caveat is that I have changed one piece of the product & will need to make a custom mold to complete an actual working prototype.

Obviously, making the mold is an investment out of pocket & up front. Since I can't get a true & complete prototype of my product without that mold, how do you suggest I got about vetting the manufacturer I want to work with seeing as I want to make sure they're legit before coming out of pocket to create a mold? And if I make a mold with a manufacturer in China, is it my property? Or theirs? And what happens to it if I need to part ways with that particular manufacturer? I feel like I'm in a catch-22 at this juncture..... I need to make a mold to proceed with the product.... but I need to vet the quality of the product/manufacturer before I pay out of pocket for a mold.... so yeah.

Any insight you have is much appreciated, as I'm not sure how to proceed from here.

Thank you!

Congratulations on finding a a solution to a problem that has escaped the attention of the manufacturers.

Before I can answer you in detail I need an answer to a couple of questions that I will outline later. First I will answer some of your specific quotations:
1. Vetting manufacturers is a procedure that not only involves checking their credentials claimed on B2B sites, but also doing diligent searches for them by various names, including omitting the city name that is a prefix to most Chinese business names. Checking their credentials means you don't believe a word of what is written in their B2B site listing, but you verify each claim.
2. Ownership of molds you pay for is a vexed question when dealing with manufacturers in China. Theoretically they are your property. In practice your ownership hinges on the trustworthiness of the manufacturer. Some will use your mold to make products for your competitors. One way to overcome that is to include you brand name and/or logo in the mold itself. That's not foolproof because they might sell the products to someone who will place their own brand or logo over the top of yours. There are many ways that can be done.
Assuming they are ethical and keep the mold exclusively for you, it is common for molds to be held by the manufacturer for a limit of 2 or 3 years after its most recent use. If you ask for it to be sent to another factory, your supplier will probably tell you that it has been lost or damaged. Likewise if you ask it to be sent to a freight forwarder.

With all of this in mind, using a local manufacturer starts to look more attractive, almost regardless of product cost. You could have a mold made in China by a mold maker with no connection to the existing manufacturer, then have it shipped to your US manufacturer. You absolutely must have the US factory's agreement before starting down that track. I have known some to make all sorts of excuses as to why they can't use a Chinese made mold.

Now for my questions to you. You might prefer to answer via PM.

1. Can you use a mold for your new part only or do you need a new mold for the whole product? If it is for a part only, the Chinese mold maker might curry favor with the existing Chinese manufacturer.
2. What material is being molded? The answer can have a big impact on my recommendation.
3. How big is the part or the entire product?

I might be offline for a while today, but will answer as soon as I can after re-connecting.

Walter

 

[Shamrox]

Good morning folks. Thanks for all the useful info.

I'm looking for the best way to get my product from the UK to the US.

I'm going to head over there with the base materials for the first lot of orders myself and ship them from North Carolina using UPS. My customers understand I will be shipping at intervals initially. So they will be expecting a delay. Just until I have big enough orders to justify a container.

Any recommendations? Doing some research and there appears to be a lot of conflicting information. I've got a call with one carrier next Friday to get some advice. But at the same time I don't want thm to take me for a ride. Since this is all new to me I don't really know what to expect.

Anyone know any creative means or good companies for shipping small orders?

Cheers!

 

[Drew D]

Thanks for the thread Walter. I'm going to be purchasing your e-book when I'm finished with TMF .

 

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[Walter Hay]

Good morning folks. Thanks for all the useful info.

I'm looking for the best way to get my product from the UK to the US.

I'm going to head over there with the base materials for the first lot of orders myself and ship them from North Carolina using UPS. My customers understand I will be shipping at intervals initially. So they will be expecting a delay. Just until I have big enough orders to justify a container.

Any recommendations? Doing some research and there appears to be a lot of conflicting information. I've got a call with one carrier next Friday to get some advice. But at the same time I don't want thm to take me for a ride. Since this is all new to me I don't really know what to expect.

Anyone know any creative means or good companies for shipping small orders?

Cheers!

I really need more specific information, but as a general rule, you should know that air courier rates are highly negotiable. Discounts of 50% on schedule rates are common, and for frequent shipments it can be even more.

Ask various air couriers to quote you, but to get the ebst rates you will need to open and account.

Just as a hypothetical answer relating to larger shipments, a 100kg shipment door to door from Swindon Oxon, to Charlotte NC could cost about $800 for delivery within 4 days, or $600 for delivery within a week, including the customs clearance fee. Duty and taxes are additional if applicable.

It is sometimes possible to get lower cost air freight as opposed to air courier services, but to be safe you must get quotes covering all costs door to door. You must inform them that you are not requesting air courier rates. To get quotes I suggest you contact freight forwarders in the US not in the UK. As a rule. UK forwarders will quote much higher.

Walter

 

[Red]

Now for my questions to you. You might prefer to answer via PM.

1. Can you use a mold for your new part only or do you need a new mold for the whole product? If it is for a part only, the Chinese mold maker might curry favor with the existing Chinese manufacturer.
2. What material is being molded? The answer can have a big impact on my recommendation.
3. How big is the part or the entire product?

I think I can do this here

1. I only need the mold for the new part on the end. This is a common product with a lot of manufacturers (or... at least... they're not scarce/hard to source)

2. Plastic

3. The part is a plastic ring, no more than 3" in diameter, an inch or so in depth & very thin thickness -maybe 1/16th of an inch? (need to measure)




For the mold, I'm getting quotes both domestically & abroad and I figured as much with what you posted above in regards, to ownership. While I would love to have a fully finished product sent to my door, I'm wondering if I'm going to need to "assemble" things myself at first before sending them off to Amazon.... I'll pm you when I put together an organized message, thank you, Walter!