How to Import From China?

*Foreword: Why import from China

Many people want to buy Chinese products for the lower cost they can get. But at the same time due to language barriers and lack of awareness of international trade processes. It will make people worry about buying bad products, unmatched services, or even getting scammed. So how to import from China is a very common problem for everyone.

With 14 years of experience and thousands of clients covering 5 continents, I would like to share my experience with all potential clients and reduce your risk. Which will meet our service goal: Make Client’s Business Grow Up.

Step 0: Please! Think Before Action

   This is a very important step but is often overlooked by many people. Almost every new or experienced businessman chooses to import products from China for higher profit margins. But the first thing you need to think about is your business model and cost calculations. Experience has taught me that not all products purchased from China are guaranteed to make money in the end. Occasionally it will lead to losses due to ignoring hidden costs. (such as Shipping, customs clearance, taxes, etc …) According to your business model, come to think of your purchasing budget, quantity, method, and pace.

Step 1:Find Product 

In today’s developed Internet, you can find almost any product online. You can find the products you want to sell through Amazon, AliExpress, Walmart, and other major websites. If you are a new entrepreneur. It is recommended that you choose the type, size, and price range of the product according to your business model, budget, and operational capabilities. For example, if you only have $2,000 to start. It is not recommended that you purchase expensive or bulky products. As such, logistics and warehousing costs can eat up most of your budget.

Step 2:Find Chinese Suppliers

On Google, if you enter Chinese suppliers, there will be a lot of sourcing companies or trading companies like us. And you can also find Chinese suppliers on some platforms, such as Alibaba, Made in China, Dhgate, etc… Of course, you can go directly to China for some fair like Guangzhou trade fair, or some local wholesale market like Yiwu Market.

It is easy to find Chinese suppliers through the above channels, but it is a more difficult problem to identify suppliers and find reliable Chinese suppliers.

I suggest that you ask a supplier for voice communication or even video calls as much as possible, and do a background check to understand the experience of their company (preferably more than 3 years), previously exported to those countries, as well as some related certificates. Remember, more information can help you reduce the risk of being scammed.

Step 3: Get Quotes

Once you have identified a supplier, you can ask it to quote you. Incoterms will appear in the quotation, which is what you need to know. The more common are EXW, FOB, CIF. Here I make a brief explanation for each one.

EXW: Product Price

FOB: Product Price+ Shipping Price (to the port of Departure) + Exporting Process Fee

CIF: Product Price+ Shipping Price (to the port of Destination) + Exporting Process Fee + Insurance Fee

Step 4:Evaluate Your Products and Suppliers

This is the part where the decision is made. So here you need to think for yourself. I give you some advice.

A: The cheapest is not necessarily the best: The lowest price, often with the greatest potential risk. When the factory, or supplier, gives you below market price. Meaning he needs to make it at a lower quality in order to be profitable. Therefore, there may be problems of secretly changing materials and reducing the size.

B: Seeing is believing: No factory will say its own bad, So if you have the conditions, you can ask for a sample, before making the bulk. That way you know if the factory is capable of making a product of the quality you need.

Step 5: Choose a Reliable Supplier and Pay a Deposit.

After the above evaluation method, a supplier is determined and a deposit is required. So there are a few points to focus on.

A: Payment Methods

   You need to choose a payment method, payment by wire transfer is generally used in China, but in addition, you can also use Paypal, Western Union, Letter of Credit (L/C)

B: Payment Terms

Chinese suppliers usually adopt such a payment clause:30% deposit before manufacturing, 70% balance before exporting. However, other payment terms may also be used, such as 30% Deposit, 70% Balance Against Bill of Landing; No Deposit, Whole Balance Against Bill of Landing, or O/A payment depending on each supplier.

C: Proforma Invoice

PI is a very important document, you need to confirm that all data in PI is correct, including payment terms and methods

Step 6:Follow Up on Your Project

Many people do nothing but wait after paying the deposit. This will have hidden problems, such as not being able to ship on time, etc., insufficient delivery quantity, etc. So we need to follow up regularly after paying the deposit, to ensure that our products can be guaranteed on time.

Step 7: Shipping Products

After completing the production, how to ship the products from China to you is the next important step, there are 6 common types of shipping methods:

  • Sea freight
  • Air freight
  • Railway freight for full container load
  • Sea/airfreight plus courier for eCommerce
  • Courier/Express
  • Worldwide express mail service( less than 2kg)

Step 8: Prepare for Customs Clearance, Pick Up and Sell

The following documents are necessary for all kinds of products when going through the export customs clearance process in China:

  • Commercial invoice
  • Packing list
  • Bill of lading
  • Certificate of origin
  • Contract

Of course, there are additional certificates required for different customs monitoring purposes on products. But for the export procedure, you don’t need to worry about this too much. Usually, the supplier will help you with it.

Apart from the goods or services, you have to cover customs duties for those certificates. But however, the charges change depending on the country of origin or specific products. For instance, if you import shoes from Asia to the United States, you’ll be responsible for customs duties, MPF (merchandise processing fee), and HMF (harbor maintenance fee). Of course, if you are a country that has signed an FTA with China, such as Chile, you can enjoy tax-free treatment(Please check your local IRS information)

You can talk with freight forwarders or your customs broker about the necessary paperwork and duty rates.

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