Lesson 6

Importing From China

In this lesson, we are going to take a look at some of the important things to keep in mind when you import from China.

I’ll also give you some specific pointers on importing from China into the US, UK and Europe and Australia and New Zealand.

Let’s get started by talking about why you would import from China.

China is fast becoming a production super power, manufacturing a hefty proportion of the world’s consumer products - particularly in the technology sector.

And what does this mean to you?

Because the Chinese economy is in a growth period, costs of manufacturing are very low compared to elsewhere in the world. This presents a fantastic opportunity to you as a seller. By sourcing your merchandise directly from China, you are able to get extremely low prices per unit and turn them around for a high profit in your own country. There are an enormous variety of products produced in China from homeware, fashion, electronics, musical instruments, cosmetics, power tools and more.

Here are some important points to bear in mind when dealing with China:

If you are worried about quality, don’t listen to the horror stories. As long as you spend time talking to your supplier, check their reputation on the SaleHoo forum, ask for a sample, and start with a small order first, you shouldn’t have any problems.

When it comes to contacting suppliers, the best way is to either call or use instant messaging to chat. Email is fine too, but sometimes suppliers get snowed under with emails so phone or instant messaging, if the supplier uses it, will get you your answers faster.

Many SaleHoo members wonder about buying branded items from China-based suppliers such as Chanel shoes or Dior handbags. We advise that you avoid products advertised as ‘authentic designer brands’ from China. Nine times out of 10, these will be fakes. Go for non-branded items instead but keep in mind that items from Hong Kong are often legitimate and authentic. If you are buying designer or branded items, always ask to see their paper work from the brand owner that gives them permission to sell the items.

Importing from China to the United States

Guess what? China is now the third largest trade partner of the USA. Importing from China is only going to become easier and more and more common as China opens its arms to international trade.

Here are 6 essential tips to make sure you get off to a good start (and these tips apply to if you are importing to the UK, Australia or anywhere else in the world, too).

Tip #1: Before you do anything else, check up on import restrictions for the product you want to import. You can do this by calling your local customs authority or by visiting US Customs and Border Protection.  

Tip #2: Carry out a bit of quick research on the wholesaler supplier.

Visit China Vista Yellow Pages and search for the business name. 

If your wholesaler is located in Wehai, you can check the Chinese Companies List

Tip #3: Ask the supplier whether they attend trade shows. If yes, it’s usually a good indication that they are legitimate and trustworthy. Trade shows require a monetary investment – making it unlikely that bogus operations will be present! However, keep in mind that if they say that they don’t attend trade shows, it doesn’t necessarily mean they are a fraud.

Tip #4: When you place an order with a supplier, make sure you put all important details in writing. It’s critical that a breakdown in dialogue is prevented. And if it should occur, having everything documented will help trace the point of breakdown.

Tip #5: If you are moving into large-scale importing, invest time and money on a few trips to China to see the suppliers/manufacturers/agents that you feel you want to work with.

Tip #6: Be aware of cultural differences and be prepared to deal with people who have a completely different attitude towards business than you. They will have their own customs and local particularities – don’t get annoyed if they do things differently to your local suppliers.

You might also like to read up on Chinese culture and learn a few Chinese words! This is a good way of showing you respect their culture and that you are genuinely interested in building a mutually beneficial business relationship.

Let’s move on and talk about importing to the UK and Europe from China

The costs and logistics of shipping from China to the UK can be intimidating for inexperienced importers who don’t know what to expect. The wide variety of shipping rates just adds to the confusion - it’s very difficult to tell what ‘reasonable’ costs actually are.

The first thing any new importer needs to do is make some inquiries. Don’t forget to shop around for shipping rates before selecting a wholesaler.

Also read: What is ePacket Shipping?

I also recommend finding out the following details when you are arranging shipping:

  • Is there an inland freight charge to get to from the wholesale warehouse to port?
  • Is there a customs duty payable on the product?
  • Are there any restrictions on bringing this product to the UK?
  • Request the tariff number from the shipping agent and ask the shipping agent to quote you on the shipping cost, including any clearance document costs.
  • How are you going to pick up the stock once it arrives? How much will this cost?

After you have been trading with the wholesaler and/or shipper successfully for some time, inquire about lower rates for frequent customers. Most won’t offer if you don’t ask.

And another thing: everything imported into the UK from outside the EU is subject to VAT of 20%. This applies to everyone, not just VAT registered companies. If you aren’t VAT registered, you will have to get a “pseudo turn” number. Your goods won’t get clearance into the UK without one.

The most useful resource for finding information on this topic is HM Revenue and Customs website http://www.hmrc.gov.uk. There you will find introductory information on importing that covers everything you need to know for your first import.

Let’s take a look at importing costs from China to New Zealand and Australia

SaleHoo members often talk about the high costs of importing wholesale goods from China to NZ and Australia. ‘Down-under’ is literally on the other side of the world from China, and it makes sense that Australasian importers are concerned. The main point I would like to make here – and I can’t emphasize this enough! – is don’t accept the shipping costs that you are quoted as fixed.

NZ and Australia don’t have bargaining cultures. We tend to assume that the price stated is The Price…and that’s it. But the same cannot be said for all countries, including China. I suggest that you negotiate the shipping costs with the wholesaler – just as you should negotiate the cost of the wholesale goods themselves.

How much the wholesaler will be willing to move on shipping costs will depend on the individual. Some wholesalers will have more room to negotiate than others, but most will be open to a little bartering.

Don’t forget to try and haggle the insurance costs down as well. Some importers have managed to reduce their insurance by 25% - a big saving for a little bit of bargaining!

For more information on importing to Australia or New Zealand, check out the websites on screen.

Here’s a quick recap of the important points from this lesson:

  • The growth period in China is provides you with an opportunity to buy low and sell high when you import from there
  • Don’t listen to horror stories about items from China being of poor quality – most of the world’s consumer goods come from China!
  • Avoid buying designer branded items from Chinese suppliers – they are probably fake
  • Before you import, you need to speak with your local customs authority and find out if any restrictions apply to the items you are importing
  • Shop around, or negotiate on shipping costs

That’s it for this video, thanks for watching!


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