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

[Walter Hay]

Hey Walter,

So I am in the final stages of negotiation and have requested a quote from the supplier but the cost for shipping seems to be extremely high.

The product costs 580 to manufacture but the supplier has quoted Door-to-Door shipping as 570 USD. The shipping method quoted was "express" so a 14 day turn around time but should it still be that expensive?

That's difficult to say without knowing dimension of all cartons and the total dimensions of the consignment. I also need to know the weight of each. The reason you need to know the dimension is that although you might be quoted a per kg rate, the total volume is converted to volumetric weight using a complex formula and might well finish up much greater than the weight over the scales.

For example you might have a shipment weighing 200 kg over the scales but its volumetric weight might be calculated at over 300 kg. This is why you must know both figures and why you should get a total door to door cost for the shipment after both have been taken into account

It is not uncommon for freight to equal the product cost if paying for door to door air courier services. The use of the word "express" suggests that you might be paying a premium price for quicker than average delivery, but 14 days is not quick.

Ask your supplier which courier service he is using. FedEx is usually the cheapest. Always be sure the freight is pre-paid.

FedEx offer big discounts to many Chinese suppliers. Don't even consider arranging the freight yourself. Once you let me know the figures I might be able to help more.
Walter

 

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[Sagemoney]

That's difficult to say without knowing dimension of all cartons and the total dimensions of the consignment. I also need to know the weight of each. The reason you need to know the dimension is that although you might be quoted a per kg rate, the total volume is converted to volumetric weight using a complex formula and might well finish up much greater than the weight over the scales.

For example you might have a shipment weighing 200 kg over the scales but its volumetric weight might be calculated at over 300 kg. This is why you must know both figures and why you should get a total door to door cost for the shipment after both have been taken into account

It is not uncommon for freight to equal the product cost if paying for door to door air courier services. The use of the word "express" suggests that you might be paying a premium price for quicker than average delivery, but 14 days is not quick.

Ask your supplier which courier service he is using. FedEx is usually the cheapest. Always be sure the freight is pre-paid.

FedEx offer big discounts to many Chinese suppliers. Don't even consider arranging the freight yourself. Once you let me know the figures I might be able to help more.
Walter

Supplier said freight is prepaid and they are using UPS as the courier. I underestimated the weight, the shipment will be about 50kg, weight per piece is 1kg

 

[Walter Hay]

Supplier said freight is prepaid and they are using UPS as the courier. I underestimated the weight, the shipment will be about 50kg, weight per piece is 1kg

Unless the dimensions are quite huge, that is an exorbitant charge. Check the dimensions. If you are shipping 50 kg of polystyrene foam that might cost you $500 or more, but let me know what the dimensions are.

I think the supplier might be trying to boost his profit by ripping you off on freight.

Walter

 

[Sagemoney]

The carton size is about 31*31*42CM 10 CTN, GW/CTN:6 KGS

 

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[Walter Hay]

Estimating the volumetric weight is dependent on the configuration used when the manufacturer packs the small cartons into a large one. The calculations I did produced a theoretical best result of 70 kgs, and the real figure is more likely going to be 80 or 90 Volumetric kgs, also known as Chargeable Weight.

10 cartons is an awkward number, most likely requiring a lot of filling in the outer package. and that is why I am guessing 80 or 90 kgs.

The final figure can depend on the type and dimensions of the outer package in which the smaller cartons are packed, so you need to ask the supplier what is the size of the outer package.

Whatever it is, I am now estimating that you are being quoted somewhere near the real cost, particularly if they are using a pallet.

Walter

 

[Sagemoney]

Estimating the volumetric weight is dependent on the configuration used when the manufacturer packs the small cartons into a large one. The calculations I did produced a theoretical best result of 70 kgs, and the real figure is more likely going to be 80 or 90 Volumetric kgs, also known as Chargeable Weight.

10 cartons is an awkward number, most likely requiring a lot of filling in the outer package. and that is why I am guessing 80 or 90 kgs.

The final figure can depend on the type and dimensions of the outer package in which the smaller cartons are packed, so you need to ask the supplier what is the size of the outer package.

Whatever it is, I am now estimating that you are being quoted somewhere near the real cost, particularly if they are using a pallet.

Walter

Thanks again Walter,

It seems my anticipation of the shipping cost being lower made me miscalculate my potential profit margin. Just another problem I will solve but nonetheless I've learned to never underestimate that again.

As biophase said "The margin's the margin for a reason"

 

[jcvlds]

Hey Walter-

I'm now in the process of payment and terms with my selected supplier(s). I have re-read over your chapter on payments to reduce my risk as much as possible. One of the suppliers offered payment over Bank TT (which from your book, I think is safe), Western Union (from your book, I think unsafe), and Payoneer.. this last one I am unsure about.. have looked up their site and wikipedia.. it may be like a PayPal? Not sure though but was wondering if you have come up with this payment form before.

Many thanks in advance,
JC

 

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[Walter Hay]

I have not experienced any China supplier offering payment through Payoneer as an option. I do know that they are a reliable organization, and costs for you and the vendor would probably be less than T/T, but I think you have to open a Payoneer account in order to make the transaction

That could take a while to arrange because it most likely involves typical bank ID verification processes.

Regards,
Walter

 

[Walter Hay]

I have received several questions lately about what is involved when a supplier ships on the terms: Delivered Duty Unpaid (DDU).

That Incoterm: DDU is often used in order to confuse new importers. It is not necessarily door to door unless that is specifically stated to be so, and unless the stated destination is your address you could be up for heavy costs in addition to the freight.

It depends on what is the named place of destination. Very often, that named place will be the port of discharge, not your business or home address. DDU is used in place of the more up to date term Cost And Freight (CFR) which is identical except for the fact that CFR makes no mention of duty unpaid, although that is always what it means.

Once goods are discharged at the port (whether airport or sea port) you can expect to be hit with a wide range of charges. This is why I emphasize in my book the need to get a comprehensive quote for freight that must include all costs. In other words it must state door to door, including Customs clearance work, AND it must be in writing.

A General Indemnity Agreement (GIA) and a Power of Attorney (POA) are usually required but for single shipments a forwarder will often only require a POA. If the shipment value is more than $2,500 they will also required a Customs Bond.

Even if the shipment is below $2,500 many forwarders will require a Continuous Customs Bond to cover them in case the importer defaults after the forwarder has paid the duty.

In summary, I don't like the idea of shipping on a DDU basis. DDP which is Delivered Duty Paid is preferable, but ONLY if the destination specified is your address, or if it is going to a fulfillment center, their address.

Walter

 

[Midas]

Hi @Walter Hay
Thank you so much for sharing such valuable information with us newbs. I am currently testing an ecomm niche. My test products all came from Aliexpress but cost is not my concern at this phase. I definitely plan to pick up your book to help plan the next phase, actually getting inventory.

My question is, my business model-bundling(similar to mancrates.com) requires lots of different product lines. 6-7 different products per box. I could end up working with 50+ manus and I can't wrap my head around the logistics. Let's say if everything is coming from mainland China, is there any way to consolidate all of the shipments over there then have it all ship at once? Could a local freight forwarder arrange something like this?

Thank you for your time.

 

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[Walter Hay]

MYCHINAFREIGHT.COM alert
Back in Sept 2016 I suggested mychinafreight.com as a forwarder in China. This was based on several good reports from members, but recent reports contradict those earlier ones.

As a result I can no longer place any confidence in that company. I have edited my old post to reflect this.

Walter

 

[Walter Hay]

Hi @Walter Hay
Thank you so much for sharing such valuable information with us newbs. I am currently testing an ecomm niche. My test products all came from Aliexpress but cost is not my concern at this phase. I definitely plan to pick up your book to help plan the next phase, actually getting inventory.

My question is, my business model-bundling(similar to mancrates.com) requires lots of different product lines. 6-7 different products per box. I could end up working with 50+ manus and I can't wrap my head around the logistics. Let's say if everything is coming from mainland China, is there any way to consolidate all of the shipments over there then have it all ship at once? Could a local freight forwarder arrange something like this?

Thank you for your time.

Many companies in China, such as ChinaDivision.com will receive small shipments, store them, repack if necessary, and put them all together as a single shipment.

Theoretically that should save you money on freight rather than pay freight separately on each single shipment. Unfortunately, the freight rates usually charged by such consolidating services are very high. Many of the small Chinese forwarders have a bad reputation, and some are outright scammers, but I have been unable to find any bad reports about ChinaDivision.

Currently, Chinadivision are charging about US$12 per kg for express shipments, regardless of weight.

Large international logistics providers usually won't handle small shipments, but it is worth trying Customs Clearance, Freight Forwarding, Warehousing - Vancouver, Richmond, BC | CTC Logistics This is a medium size Joint Venture enterprise between a Canadian Customs Broker We Are Toronto's Freight Forwarding Specialists and a Chinese company Acrowell International Logistics Ltd.
I would be confident in dealing with such a company, but they don't publish rates.

Walter

 

[banjoa]

Hello Walter,

Thanks for all your contributions to us newbie to importing.

I have a question.

I'm having problems with the suppliers from the sites you recommended in your book replying to my enquiries.

I see a product I'm interested in, I contact the supplier to send a catalog and price list and then...silence.

No reply.

I'm getting only about 1 reply in 20 contacts.

Is this normal?

That's difficult to say without knowing dimension of all cartons and the total dimensions of the consignment. I also need to know the weight of each. The reason you need to know the dimension is that although you might be quoted a per kg rate, the total volume is converted to volumetric weight using a complex formula and might well finish up much greater than the weight over the scales.

For example you might have a shipment weighing 200 kg over the scales but its volumetric weight might be calculated at over 300 kg. This is why you must know both figures and why you should get a total door to door cost for the shipment after both have been taken into account

It is not uncommon for freight to equal the product cost if paying for door to door air courier services. The use of the word "express" suggests that you might be paying a premium price for quicker than average delivery, but 14 days is not quick.

Ask your supplier which courier service he is using. FedEx is usually the cheapest. Always be sure the freight is pre-paid.

FedEx offer big discounts to many Chinese suppliers. Don't even consider arranging the freight yourself. Once you let me know the figures I might be able to help more.
Walter

 

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[Walter Hay]

Hello Walter,

Thanks for all your contributions to us newbie to importing.

I have a question.

I'm having problems with the suppliers from the sites you recommended in your book replying to my enquiries.

I see a product I'm interested in, I contact the supplier to send a catalog and price list and then...silence.

No reply.

I'm getting only about 1 reply in 20 contacts.

Is this normal?

I'm very sorry to say this, but I suspect that they don't reply because you are in Nigeria. I understand your frustration.

Unfortunately few people seem to understand that your country has a thriving economy and there are many successful importers there.

Try sending emails without disclosing your location. When it comes time to place an order, give them your address in USA, UK, or some other country, and tell them you want the goods shipped to your agent in Nigeria. If you need help with a US or UK address I will PM you how.

Make sure you can pay them without identifying Nigeria as your location.

Let me know if this doesn't work and I will try to help.

Walter

 

[banjoa]

I'm very sorry to say this, but I suspect that they don't reply because you are in Nigeria. I understand your frustration.

Unfortunately few people seem to understand that your country has a thriving economy and there are many successful importers there.

Try sending emails without disclosing your location. When it comes time to place an order, give them your address in USA, UK, or some other country, and tell them you want the goods shipped to your agent in Nigeria. If you need help with a US or UK address I will PM you how.

Make sure you can pay them without identifying Nigeria as your location.

Let me know if this doesn't work and I will try to help.

Walter

Thanks for the Quick reply Walter.

This is what I was thinking too.

I know my country has a poor reputation but I'm the one making payments, I wonder why that is.

Thanks, please do send the PM.

I got a supplier from Thailand for a particular product I'm interested in from hktdc. And they seem to be ok with me being from Nigeria.

Your book was very valuable, I can't thank you enough for that piece of gem.

 

[Walter Hay]

Thanks for the Quick reply Walter.

This is what I was thinking too.

I know my country has a poor reputation but I'm the one making payments, I wonder why that is.

Thanks, please do send the PM.

I got a supplier from Thailand for a particular product I'm interested in from hktdc. And they seem to be ok with me being from Nigeria.

Your book was very valuable, I can't thank you enough for that piece of gem.

PM sent. I hope my suggestion works for you, but let me know if you need more help.

Walter

 

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[Nomadic]

Wow man! Literally a thread that has gone on for four years and you are still active on it? That in itself is an accomplishment. Thank you for all of the value and knowledge that you and your team have provided for everyone. Truly a gold mine of info.

 

[ExaltedScorpion]

Walter

I'd like to first say thanks for sharing this gold mine of information. It has been very helpful.

A lot of the information here pertains to importing into the US or other countries. I'm looking to start a export business where I export from the US. I have a few questions that I wanted to know if you could provide some additional information on.

1. I want to start a business that exports commodity and speciality chemicals (I'm a chemical engineer by day so I figured it was in my realm of expertise). I'm honestly having a hard time figuring out where to start and who to contact. Would you happen to know if any places to look first? Also places that draw out the exporting process from the US? I'm in Houston if that helps any.

I already have the first chemical I want to export which brings me to my next question.

2. How should I go about finding international customers to purchase my chemicals? I don't want to put the wagon ahead of the horses here but I've found a few B2B websites but I'm not sure how valid they are. Should I hire an international sales person which I would fund with my day job? This almost seems a little unnecessary starting out but I'm not sure.

Thanks

 

[Walter Hay]

Walter

I'd like to first say thanks for sharing this gold mine of information. It has been very helpful.

A lot of the information here pertains to importing into the US or other countries. I'm looking to start a export business where I export from the US. I have a few questions that I wanted to know if you could provide some additional information on.

1. I want to start a business that exports commodity and speciality chemicals (I'm a chemical engineer by day so I figured it was in my realm of expertise). I'm honestly having a hard time figuring out where to start and who to contact. Would you happen to know if any places to look first? Also places that draw out the exporting process from the US? I'm in Houston if that helps any.

I already have the first chemical I want to export which brings me to my next question.

2. How should I go about finding international customers to purchase my chemicals? I don't want to put the wagon ahead of the horses here but I've found a few B2B websites but I'm not sure how valid they are. Should I hire an international sales person which I would fund with my day job? This almost seems a little unnecessary starting out but I'm not sure.

Thanks

I have posted a number of times on the subject of exporting, and this post Is anyone in the import/export field? will be a good introduction.

I am traveling again over the next 10 days and might be a bit slow responding, but meanwhile I will warn: Beware of the multitude of B2B sites offering deals on commodities, listed under Buy/Sell. They attract scammers.

To advertise your product internationally, I suggest you obtain a free membership as a vendor on Alibaba.

Walter

 

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[jcvlds]

Hey @Walter Hay . I had a situation come up that I would love to get some quick guidance on. Thank you for your time and advice in this thread.

I have dealt back and forth with a supplier on a product I am looking to import. They have been really good with communication, payment was simple, received the sample, good quality, and so on. It is now in talks with the first order that I am seeing a possible issue arise. They are quoting on EXW and seem to not budge on it. Is this a deal breaker? I am going back to your book and know you mention you hardly ever purchase with that method. Is there any time when you would consider it? Or do you have any possible tactic I may try to solve it?

Many thanks in advance.

 

[Walter Hay]

Hey @Walter Hay . I had a situation come up that I would love to get some quick guidance on. Thank you for your time and advice in this thread.

I have dealt back and forth with a supplier on a product I am looking to import. They have been really good with communication, payment was simple, received the sample, good quality, and so on. It is now in talks with the first order that I am seeing a possible issue arise. They are quoting on EXW and seem to not budge on it. Is this a deal breaker? I am going back to your book and know you mention you hardly ever purchase with that method. Is there any time when you would consider it? Or do you have any possible tactic I may try to solve it?

Many thanks in advance.

If it is a small shipment that you want to travel via air courier, you could ask your supplier to quote you for air courier door to door. That is a very common arrangement, and if they do regular exports it should be no problem.

EXW is OK if you are having the shipment handled by a freight forwarder in your own country, who has good representative ties with a forwarder in China. You will need to get your forwarder to quote you an all-inclusive price door to door, whether sea freight, air freight, or air courier.

Walter

 

[Walter Hay]

Panjiva being taken over by S&P Global.

Standard and Poors are in the process of finalizing the acquisition of Panjiva. It is not known whether S&P will continue to allow casual free access to a limited amount of import information, but I will keep readers posted.

Big importers currently find the subscription fee worthwhile, as I do, but if casual users have to pay, it could be uneconomic.

Walter

 

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[LPPC]

@Walter Hay

Thank you for creating this thread, really helpful! I've got some questions and maybe you could answer them?

When looking to import a product, when would you ask the supplier how much air courier shipment would cost for a test order or a regular order?

Because I thought maybe I should know whether the numbers would work (product cost and freight cost in order to calculate net profit) before even ordering a sample?

Let's say the manufacturer has a MOQ of 300 listed on the B2B site. You would like to lower the MOQ to 100, if possible. Is it okay to ask the manufacturer for the air courier cost for 100 units before ordering the sample?

I think the numbers will work for this particular product, but I would like to know for sure before ordering any samples.

Thank you.

 

[Walter Hay]

Yes, when you order the single sample, you could say that if it is satisfactory you will order a trial quantity of 100 pcs, and you want to know the unit price and air courier door to door cost for that quantity.

Walter

 

[sparechange]

I have a supplier from Alibaba (China)

We've been through a few orders already & now I'm wanting to make a product with them helping to design it.

Lets say its all done and I am selling them like hotcakes, Am I able to have the supplier sell exclusively to me? Or since they helped design and ''own'' my product is there nothing stopping them from selling to others?

On Amazon this seems to be a common theme with a million different ''brands'' selling the same product.

China is the wild wild west AFAIK, if you could clarify that would great! Thanks!

 

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[LPPC]

Yes, when you order the single sample, you could say that if it is satisfactory you will order a trial quantity of 100 pcs, and you want to know the unit price and air courier door to door cost for that quantity.

Walter

Very clear, thank you very much!

 

[Walter Hay]

I have a supplier from Alibaba (China)

We've been through a few orders already & now I'm wanting to make a product with them helping to design it.

Lets say its all done and I am selling them like hotcakes, Am I able to have the supplier sell exclusively to me? Or since they helped design and ''own'' my product is there nothing stopping them from selling to others?

On Amazon this seems to be a common theme with a million different ''brands'' selling the same product.

China is the wild wild west AFAIK, if you could clarify that would great! Thanks!

Even if a supplier agrees to supply you exclusively, that is only likely to continue until someone comes along with a very big order.

If you can incorporate your brand name, URL or logo in the body of the product, that will usually stop them from selling to others. They can often find ways around that, if for example you have your brand inserted in the mold. The can use mold inserts that will allow them to slip in a different brand name, even their own.

The sellers of all those "brands" on Amazon, selling the same product have been fooled into thinking that they are Private Labeling, but what they do is ineffective because when there are so many selling the same product, the "brand" is no different than a business name.

You are on the right track in designing something different, but if you have my book, check out Chapter 12.14 about Custom Made Products. It's nearly 2 pages, and is a cautionary story. One point I make is that I have seen plenty of cases in which a new design or new product is being offered by other suppliers in China before the innovator who submitted the design even gets a prototype.

If you care to tell me privately what the product is I might be able to suggest ways of keeping it to yourself.

Walter

 

[sparechange]

Even if a supplier agrees to supply you exclusively, that is only likely to continue until someone comes along with a very big order.

If you can incorporate your brand name, URL or logo in the body of the product, that will usually stop them from selling to others. They can often find ways around that, if for example you have your brand inserted in the mold. The can use mold inserts that will allow them to slip in a different brand name, even their own.

The sellers of all those "brands" on Amazon, selling the same product have been fooled into thinking that they are Private Labeling, but what they do is ineffective because when there are so many selling the same product, the "brand" is no different than a business name.

You are on the right track in designing something different, but if you have my book, check out Chapter 12.14 about Custom Made Products. It's nearly 2 pages, and is a cautionary story. One point I make is that I have seen plenty of cases in which a new design or new product is being offered by other suppliers in China before the innovator who submitted the design even gets a prototype.

If you care to tell me privately waht the product is I might be able to suggest ways of keeping it to yourself.

Walter

hmm, I've heard some horror stories of people making kick starters on a brand new product that's 100% original & Chinese factories knock it off before its made, pretty crazy.

It seems like the best way would possibly be having the biggest pockets and be manufacturing high MOQ to keep out all the low budget Amazon players.

The product I have in mind is a device that can pick things up, I haven't seen anything like it all.

 

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[Walter Hay]

hmm, I've heard some horror stories of people making kick starters on a brand new product that's 100% original & Chinese factories knock it off before its made, pretty crazy.

It seems like the best way would possibly be having the biggest pockets and be manufacturing high MOQ to keep out all the low budget Amazon players.

The product I have in mind is a device that can pick things up, I haven't seen anything like it all.

I know that I teach importing, but have you looked at the idea of having the product made locally or in the USA?

Times are a-changing and local manufacture can be cost effective in many cases. In fact it has been heading in that direction for several years. That doesn't even take into account the relative safety of your IP when dealing with manufacturers in Canada or the USA.

Walter

 

[Xeon]

Hi Walter, would you be able to point me in the right direction of where to find companies that can manufacture a small no. of this sort of packaging?

I'm looking for something like those 2 boxes on the right. Would it be very expensive to build these stuff? My products would look pretty cool in these boxes, especially if I print my designs on it to give it an even more premium and branded look.

I'm looking for only around 250 or so for a start, the few I've seen in the US are asking for 3000 - 5000 MOQ lol