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

Cruiser

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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

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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

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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?
 
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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
 
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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




 

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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.
 
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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
 
D

Deleted70138

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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?
 

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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.
 
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D

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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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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.
 

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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
 

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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.
 
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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
 

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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.
 

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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
 
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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?
 

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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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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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Hi @Walter Hay,

We have been importing beauty products from China & Korea for around 5 years now and have built some great relationships with those suppliers. We are about to start dealing with some suppliers in Vietnam (found via Alibaba)

What are the main differences I should be aware of when dealing with Vietnamese suppliers vs Chinese suppliers?
Can I expect a higher level or attention to detail and care? Are they more likely to stick to agreed delivery time frames etc?


Thanks in advance!
 

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Hi @Walter Hay,

We have been importing beauty products from China & Korea for around 5 years now and have built some great relationships with those suppliers. We are about to start dealing with some suppliers in Vietnam (found via Alibaba)

What are the main differences I should be aware of when dealing with Vietnamese suppliers vs Chinese suppliers?
Can I expect a higher level or attention to detail and care? Are they more likely to stick to agreed delivery time frames etc?

Thanks in advance!
I have a full page in my 2021 edition dealing with searching the two Vietnamese exporting sites that I show links to. You could possibly do better by direct searching those sites.

In any case there are similarities and differences between doing business in China and doing business in Vietnam. If you are thinking of visiting the country it is important to know the social and business culture.

For this reason Chapter 13. VIETNAM THE NEW CHINA Cultural outline in two pages gives you a lot of information that could save you from making mistakes that could ruin a deal.

In my experience they are very much more concerned about quality control. Delivery times are usually adhered to but since Covid there have been some delays due to limits on transport availability, but I know that some international shipping companies are working on remedying that.

I would now prefer to deal with suppliers in Vietnam rather than China.

Walter
P.S. If visiting, keep in mind that Vietnamese business people are very punctual.
 

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I have a full page in my 2021 edition dealing with searching the two Vietnamese exporting sites that I show links to. You could possibly do better by direct searching those sites.

In any case there are similarities and differences between doing business in China and doing business in Vietnam. If you are thinking of visiting the country it is important to know the social and business culture.

For this reason Chapter 13. VIETNAM THE NEW CHINA Cultural outline in two pages gives you a lot of information that could save you from making mistakes that could ruin a deal.

In my experience they are very much more concerned about quality control. Delivery times are usually adhered to but since Covid there have been some delays due to limits on transport availability, but I know that some international shipping companies are working on remedying that.

I would now prefer to deal with suppliers in Vietnam rather than China.

Walter
P.S. If visiting, keep in mind that Vietnamese business people are very punctual.
Thanks Walter. This pretty much aligns with my experience so far.
 
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IMPORTANT UPDATE.
On Aug16, 2021 the USCBP agency stated: "The duty will be assessed on the price paid for the goods (not including the cost of freight and insurance)." That value is the FOB invoice price.

This is good news for all US importers because it can allow a worthwhile reduction in declared value on which duty is paid.

Also a reminder that the DeMinimis value of commercial shipments that can be imported by one person in one day remains unchanged at $800. In other words if you can organize your suppliers to ship parcels not exceeding that value per parcel 2 or 3 days apart, you can import duty free.

Warning: If your supplier slips up, or there is a delay that causes 2 or more days' parcels to arrive together, you will pay duty on the total value of the two or more shipments.

Walter
 

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Hi Walter,

I have a bit of an odd question. Depending on the Covid situation, there's a chance I'll go over to Hong Kong to stay with my fiancé for a few months this fall. If I'm actually allowed in there or the mainland, do you think it would be worth trying to network and meet people / manufacturers there?

I don't presently have a business or any plans to produce anything at the moment, but am thinking why not make the most of the situation while I'm over there.
 

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IMPORTANT UPDATE.
On Aug16, 2021 the USCBP agency stated: "The duty will be assessed on the price paid for the goods (not including the cost of freight and insurance)." That value is the FOB invoice price.

This is good news for all US importers because it can allow a worthwhile reduction in declared value on which duty is paid.

Also a reminder that the DeMinimis value of commercial shipments that can be imported by one person in one day remains unchanged at $800. In other words if you can organize your suppliers to ship parcels not exceeding that value per parcel 2 or 3 days apart, you can import duty free.

Warning: If your supplier slips up, or there is a delay that causes 2 or more days' parcels to arrive together, you will pay duty on the total value of the two or more shipments.

Walter
It's always better to try
 
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Walter Hay

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Hi Walter,

I have a bit of an odd question. Depending on the C0VlD situation, there's a chance I'll go over to Hong Kong to stay with my fiancé for a few months this fall. If I'm actually allowed in there or the mainland, do you think it would be worth trying to network and meet people / manufacturers there?

I don't presently have a business or any plans to produce anything at the moment, but am thinking why not make the most of the situation while I'm over there.
There are always trade exhibitions under way in HK. Look up HKTDC trade exhibtions to see what is worth visiting while you are there.

Regards,
Walter
 

Walter Hay

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SCAM, RANSOM, EXTORTION ???? You be the judge.

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.
On June 13 I wrote what I quoted above, and now we are seeing the opportunism rearing its ugly head to a degree that I never thought I would see.

This is how it works: "No-Roll Premiums". A No-Roll Premium is an extra charge now being levied by shipping lines, because once your freight is on the wharf or in the export warehouse you are at their mercy.

In simple terms it is a premium they are demanding from shippers who don't want delays caused by rollovers. A rollover is what happens when a shipping line has freight bookings for more than what the vessel can fit on board. The result is that the container is left behind.

Delays can add up to 4 to 6 weeks, because although there might be another ship loading a week after your booked one sets sail, there is no certainty that you get priority because your shipment missed the boat...... and again a week later.... and a week later.

The best solution I can suggest is to use one of the big names in freight forwarding to arrange your shipping. If you are in the USA I suggest Universal Cargo. https://www.universalcargo.com/ This is not an affiliate link.

Walter
 

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