China has changed the panorama of the trading business in the whole world. Chinese products are very affordable, and they have made it possible for people in business and e-commerce to earn massive profits. To excel in the importing business, you must learn the best and fool-proof ways to import from China.
However, nothing comes easy in life. Many people start importing from China without researching the market and without making a proper plan. As a result, they face failure even much earlier in their journey.
To make your business venture a success, you will need to study your market, choose your products, and find the best suppliers. Especially for first-time importers, it is important to familiarize themselves with the complex process and its various intricate steps. Thus, we collected the steps to master the importing business in this article from choosing the right products to finding reliable suppliers.
Table of Content
Chapter 1. Why do you need to import from China?
Chapter 2. Preparations before importing from China.
Chapter 3. Products to import from China.
Chapter 4. Choosing the best products to import from China.
Chapter 5. Products you should not import from China.
Chapter 6. How to import from China?
Table of Contents
Chapter 1. Why do you need to import from China?
Over the years, China has become the finest global industrial and trading center.
In the US, worldwide importing is an enormous industry. According to statistics, in 2018 the total value of the US trade with China was approximately 660 billion US dollars. It’s not just the US, many countries worldwide are importing from China.
People across the world are drop-shipping and importing profitable products from China and selling them on multiple platforms like E-commerce websites and Wholesale markets. China manufactures and trades more than 80% of imported goods worldwide. Therefore, traders, entrepreneurs, and businesses are importing products in China.
Here are the reasons why the market in China is highly-growing:
- Low manufacturing costs
- Cheap labor costs
- Skilled manufacturing
- Strong trading infrastructure
- Abundant resources for cheap manufacturing
- An adequate supply chain system
It is very easy to import products from China as compared to doing business with middlemen. Here are some other advantages of trading from China:
a. Potential profit margin
When importing goods from a country, you have to consider a lot of expenses other than manufacturing. Therefore, after calculating taxes, fees, handling costs, and shipping charges, you may end up getting lesser profits than you anticipated.
Due to the lower costs of manufacturing and labor, there is a very high-profit margin. Comparatively, when you import from other countries, higher input costs lower the significant profit margins.
b. Low transit times
The industries in China have very high manufacturing capacity. There is no dearth of manual labor, technology, and product input in China.
Moreover, they have a constant supply chain ecosystem. The easy availability of sources and efficient manufacturing result in fast turnouts.
Therefore, when importing from China, the transit times of the imported goods are much faster.
Also read on: China Cosmetics Wholesale Market Complete Guide
c. Easier trading
Over the years, China has made it easier for importers to trade goods. They offer low taxes and do not require licenses and permits for importing products.
Although you still have to follow the international regulations of trading and the rules of your own country when importing from China. If you have previous experience of importing, you may understand how simple it is to trade with China.
d. Freedom & flexibility
Another big advantage of trading with China is that you get the opportunity to do business as an independent retailer. This means that you don’t have to deal with middlemen or follow any specific terms by them.
This gives you the freedom to do business on your terms. You can sell the products you import online on multiple platforms. It gives you the flexibility to control your products, sales, and profits.
Chapter 2. Preparations before importing from China
a. Confirm the trading background & barriers
Preparation is the most important part of importing. This involves making yourself familiar with the trading background of China with your country. It also includes learning about trading barriers.
a-1. Trading background
The US-China trade ties have seen many bumps on the road. The economic conflict between the two largest national economies in the world is continuous.
In 2018, President Trump revisited the trade agreement with China with a new goal. The goal is to reduce the trade deficit and the calls ‘unfair trade practices.
As a result, Trump started setting new tariffs and barriers to China. Recently, in January 2020, Chinese Vice Premier, Liu He, and the US President Donald Trump shook hands on the US-China Phase Ⅰ Trade deal.
According to the deal, the government policies, tariffs, and barriers will have more control over the trade than market forces. In the new American trade policies, the US will try to establish a direct enforcement system outside WTO (World Trade Organization).
A lot has changed in the importing world since 2018. China has implemented new regulations to minimize import-export taxes and duties. This is to promote a new level of directness and local consumption due to the trade war.
a-2. Trading barriers
China imposes trade barriers for import and export. These barriers include:
- Tariffs
- Quotas
- Restrictions
Generally, there are two kinds of trade barriers: Tariff barrier and Non-tariff barrier.
China imposes tariffs on imports. Certain factors help in assessing these tariffs. These include:
- The transaction value of products
- Packing costs
- Freight and shipping
- Insurance premium
- Service charges (charges of services before unloading products in the destination country)
- Value added tax (ranges from 10% to 16%)
- Consumption tax (applicable for importing tobacco, liquor, cosmetics-rate varies between 1%-40%)
One important thing is that these charges have come down a lot. Since China’s agreement with the World Trade Organization, the tariffs have lowered from the past.
China is trying to facilitate importers to keep dominating the trade market. Therefore, it has shown great incentives to help importers.
As a result, the average tariff has lowered immensely in the past years. You will see a fall from 15.3% in 2000 to 9.3% in 2017.
Tariffs and taxes can be very daunting. If you are new in business and need expert consulting services, you can contact EJET for market research and investigation.
We will help you remove the trade barriers between you and the Chinese market. As a result, you will get a clear picture of your industry market dynamics, including sales & marketing channel opportunities and challenges, competitive analysis, and various forms of media, including electronic and print.
Our service includes:
- Market analysis (data sources, on-the-ground research)
- Marketing channel strategy and implementation
- Wholesaler/distributor/retailer search/vetting/connection
- Sales funnel creation/implementation
b. Study the target market well before importing
It is very necessary that you have a feasibility study that meets all aspects of the market that aims to import products into it.
For example, you must study the prices of similar products in the target market and the cost of these products in order to reach you and the expected profit margin and the market viability of the products.
Are they products that the market needs badly or No, will it target multiple regions or a specific area? Also, will you store the goods or sell them directly? If you will sell directly, will they sell to retailers or wholesalers, or will you sell yourself through your own sales outlets?
c. Learn the rules and laws of the target country’s customs
Among the important information that you must be fully aware of are the customs laws of the country in which you import the products, for example, you will determine whether the imported commodity is a recreational or basic commodity to know what its customs tariff and the shipping and discharging dates to protect yourself from paying additional costs or fees More than usual in the case of violations.
The quality of the commodity and its condition upon arrival may lead to the loss of the entire shipment, so you must know exactly what to do with your shipment, and you must know the required papers and documents that must be submitted in order to complete the customs release procedures for your goods.
It also determines whether you will be able to do this on its own or will you need the assistance of one of the customs clearance offices or companies in this because the costs and fines that may occur to you in case of violations or the lack of the required documents may cause you substantial losses actually.
d. The papers required for import from China
Bill of lading: B / L is denoted in English, which is a report submitted by the shipping company, and it must be of several papers, and the original of it or pictures must be presented in the event that the source allowed the importer to act on his behalf to manage it using the images.
Commercial invoice: It is denoted in English by the acronym “Invoice”, which is the invoice that identifies the items and types imported by names.
Certificate of Origin: It is denoted in English by abbreviation C / O, and that certificate must be extracted through the supplier or factory from which you will buy and also can be extracted through the shipping company that has an agency from the supplier accordingly and must be documented from the Egyptian Chamber of Commerce and Embassy in China.
Quality certificate: It is denoted in English by the acronym CQI, and its presence is required only in case of import from China, but from other countries, you may not need it at all.
Value Declaration: It is an acknowledgment from the importer that stipulates a pledge of the full value of the imported goods, and he must bring a validity signature on this declaration from his bank.
Packing list: It is denoted in English by the name of the Packing List and the list is similar to the commercial invoice completely, but it is detailed. It shows the contents of containers and packages in the shipment in detail, as well as the preparation for the customs officer to match a random sample of packages with what is written in the disclosure and its lack of means, means that the goods are fully subjected to the examination which may lead to damages.
Form 4: It is required in the case of goods whose value exceeds 5 thousand dollars or its equivalent in the Egyptian pound, and the method of extracting it is through the bank through which the transfer was made in order to obtain the swift code for the transfer process, preferably at the end of it, a phrase indicating that the full price The products that were imported are prepaid and this is not required to provide you with a copy of the transfer.
Chapter 3. Products to import from China
Invest some time in deciding the products that you will like to import from China. If you choose a product without researching, you may end up with fewer profits.
Therefore, you need to find the products that you can resell fast. For your research, you can use:
- descriptive literature
- product composition information
- product samples
In this section, we will tell you how to choose the best products to import from China. We will also talk about the products that you should not import.
How to find suitable products to import from China?
When choosing products, consider goods that:
- Are in great demand and have better chances to sell fast
- Are smaller and can be shipped easily
- Have low manufacturing and shipping costs
- Have low tariffs and duties
To learn about the rate of duty, look at the HS Code of the products. The HS Code is the Tariff Classification Number, you can learn more about it here.
In China, there are three categories for import goods:
- Prohibited
- Restricted
- Permitted
Moreover, the products in the restricted group may need quotas, permits, or licenses to import. Fortunately, almost everything you may think of will come into the permitted group.
This is one of the main reasons to import from China. In this category, the importers enjoy the freedom to choose the quantity of the products as well as their delivery timelines.
For importing products like machines, electrical products, MOFCOM issues an automatic license. Remember that as an importer, it is your responsibility to make sure the products you chose to comply with the regulations of both countries.
Chapter 4. Choosing the best products to import from China
Here is a list of some product categories that are in great demand in the US and many other countries.
a. Home decorations & improvements
Today, people are spending more and more on decorating their houses. From LED lights to small decoration items, everything sells fast on e-commerce websites, online retail stores, and in local shops.
The demand is ever-growing as people require new items according to seasons, events, and holidays. You can even import smart furniture or eco-friendly items for home improvement and decoration.
b. Pet supplies & accessories
Another big trend in the US and European countries is to invest in pet supplies. In the US, almost everyone has a pet.
When importing pet accessories, focus on the young population as that is your target market.
You can import items like pet toys, pet beds, pet apparel, and fashion accessories.
c. Apparel and fashion accessories
The fashion industry is never going down. With the retail stores shutting down, now is the time to expand to the online market for fashion clothing and accessories.
You can import chic clothing items from China. The accessories like fashion jewelry, high-quality bags, backpacks, belts, and socks sell like hot cakes on Amazon, eBay, and other online stores.
You can even sell these items on your local store or your website.
d. Electronics & gadgets
Electronics and gadgets will never grow out of demand. The demand is as high as ever today. According to Statista, the consumer market in the US has risen to $301 billion in 2019.
In China, there are endless options for electronics and gadgets that you can get at a good price and sell for a great profit margin.
e. Car electronics & accessories
The car electronics and accessories are very expensive from the brand stores. Therefore, there is a great demand for Chinese products in the market.
With the advent of electric cars, a plethora of car electronics appeared in the market. Therefore, care products are another safe category to consider when importing from China.
Other products to consider are:
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- Mobile phone accessories
- Bags and backpacks
- Travel accessories
- Kitchen items
- Kids toys
- Event decoration items
- Gift packing and boxes
- Stationery
Chapter 5. Products you should not import from China
There are some items that you should avoid when importing from China:
- Some products are banned these include things like wastes and toxins.
- Avoid importing products that are not safe or fail to meet the health codes of your country.
- Also, avoid the goods that violate any restrictions in your country. Doing so may result in paying heavy fines and penalties.
Some products are expensive to import. They may cost lesser per item but the packaging and shipping can make the price tag quite hefty for you.
These include:
- Glass items
- Fragile products
- Gems
- Liquor and beverages
- Food items
- Meat and meat products
Still, having trouble figuring out what products to choose?
Let us help with sourcing your products. At EJET, we provide free sourcing solutions to help you choose the most profitable products.
Chapter 6. How to import from China?
Once you have selected the product/products you will like to import, you can start planning your importing business. Here are some of the steps that you will come across:
Step 1. Find reliable suppliers in 2020
So, you have found the perfect product to import. What’s next? Finding a supplier or distributor.
Since the trading market is thriving in China, you will find dozens of manufacturers for one product. But how do you choose the one that is the best?
a. Types of suppliers
There are the following types of Chinese suppliers that you will come across:
a-1. Manufacturers
A manufacturer will produce products for you that you can import.
Since manufacturers are the ones making the products, you will get the lowest price from them.
However, you may have to order products in bulk.
Mostly, only small scale manufacturers work directly with retailers. Others work with wholesalers and suppliers.
a-2. Wholesalers
Wholesalers buy from manufacturers and sell to retailers in bulk.
When dealing with wholesalers, you will receive reduced prices.
You get more discounts when you order higher quantities.
a-3. Drop-shipping
Drop-shipping is very different from wholesale trading. A drop ship source will not allow purchases in large volumes.
When doing this, you can purchase one product at a time.
In drop shipping, you have to pay for a product when it sells.
However, since you are paying upfront or buying in bulk, you will not get the lowest price.
In drop shipping, you don’t need to hold off in inventory, packing, shipping, or dealing with customers.
For instance: If you are selling on Amazon, Amazon will take care of the part.
b. Where to find reliable suppliers?
Now that you understand the types of suppliers, the next step is to find one.
You can travel to China and meet some suppliers there, or you can find some online. The safest method, however, is to use a sourcing company that can help you in providing all solutions for trading.
b-1. Finding suppliers on Google
Google is the perfect source of information in every aspect of life. So, try it for finding your supplier.
Tip: Type in the search bar: {Product Name} + {Wholesaler}
You will find a list of wholesalers for the product you chose.
The problem, however, is that you will find millions of search results. And finding a reliable one, offers the best price, best turn out may be hidden somewhere in the heaps of data.
So, we recommend doing it as a first step to familiarize yourself with what to expect.
b-2. Attend trade fairs & expos
This is the perfect way to meet suppliers from China. By meeting them directly, you will have a better chance to determine what works for you.
You may even be able to see some samples of the products. This will give you the unique opportunity to ask all your questions regarding their capacity, turn out and quality-control.
Keep an eye out for The International Consumer Electronics Show in Las Vegas. You may find some Chinese participants on the show.
However, if you are ready to dive importing from China, visit:
The Canton Fair is one of the largest trade fairs in China. Catch it from April,14 to May,5 (2020) in Canton, China. You will find thousands of suppliers and products at the fair.
The East China Fair is also the largest regional trade fair in China. It is organized once every year in Shanghai. In 2020, you can attend it in March. It has the highest turnover.
b-3. Chinese marketplaces
Another place to find suppliers, drop shippers or bulk products is the online Chinese marketplace. Most famous ones are: AliExpress and Alibaba
AliExpress is a great marketplace to explore Chinese products and meet suppliers.
On this platform, you will find suppliers and stores selling products to consumers. You will find the lowest wholesale price.
The best part about this is that they deliver fast. You will receive your products in 2-3 weeks.
If you are just starting, this can be confusing for you. Here, most of the listings are from manufacturers. Usually, they don’t have websites.
There is also a great problem in communicating in English. Moreover, they demand payment via wire transfer. Still, there is no guarantee of the quality of the items you will get.
c. Validating the supplier
To verify a supplier, you must do some research. However, there is no guarantee of any of the results you will find.
A few methods you can use are:
c-1. Background check of the supplier
You can use the internet to learn about a company. It can be a little easy if you find a website. Try to find reviews.
A great tip is to join trading groups and forums on social media. You may find someone with prior experience with the company.
This is not easy, and the information may not be valid.
c-2. On-site check
Check the supplier’s website for Business license, ownership status, contact details, certifications from contractors.
This is also not easy as well, and you cannot trust the information you find.
c-3. Contact the supplier
You can also contact the supplier. Talk to their customer services. This will give you an idea of their working principles and ethics.
You can also order samples to check the product.
c-4. The best solution
The best solution, of course, is to give the job to someone who is expert and has years of experience in vetting suppliers.
At EJET, we have seen how choosing the wrong suppliers impacted the business of many importers. Therefore, we provide the most personal and precise consulting services to all our clients.
We will help you choose a supplier and verify everything for you. You can trust the information that we provide comes from a reliable, first-hand source.
Step 2. Follow-up Production
As you have found your supplier, confirmed the sample, and are ready to place the order, there is one more step you need to follow-up production.
Product follow-up is a time-consuming process. However, it is very important to make sure you get the right products. Expect this process to take weeks or even months.
EJET is here to be your eyes in China. We have presented our comprehensive Inspection Services for you.
We will help you in auditing your supplier and the manufacturing factory. We will check the initial products and make sure they are according to your requirements. Once we verify that, the mass production will start.
As the manufacturing starts, we will monitor everything to make sure you get the best quality within the delivery time.
Once your order is ready to ship, we will check to see that all products are according to your requirements. Any manufacturing flaws will come to light in this step.
As the loading begins, we will keep an eye on everything. We will see the packing and loading is done properly.
Step 3. Quality control
For importers, it is very important to do quality control. Quality control entails product details, manufacturing processes, and the quality of production.
The goal of quality control is to identify problems and detect the defects beforehand. It is easy to resolve issues when we catch them earlier. Therefore, to avoid any loss in your business, quality control is very important.
You can do this by one of the following ways:
Using a supplier’s reviewer
Hiring a third-party inspection company
By choosing a third party for quality control, you can set your standards. The company will verify everything from the features of the products to the functions. They will inspect on-site and make sure you get the best product as per your requirements.
EJET provides a quality assurance service. Now, what is quality assurance? This means we take guarantee for everything including:
- Broken items
- Damaged products
- Quantity shortages
- Other supplier related issues
We will refund your credit if there is an issue with your order.
Step 4. Transportation
Let us talk about transportation now. This is another important and expensive step of your importing journey.
Choosing the best shipping method is important to ensure you get your order on time. The transportation costs will include expenses for:
- Container fees
- Packaging charges
- Terminal handling
- Broker fees
First of all, choose the method for your shipping. You can choose from sea freight, air freight or a courier service.
Remember that once your order is ready, it will tell a few days (1-2 min) for your package to reach the port from the factory. Custom checks will take another 1 to 2 days.
So, it may take up to one week for your shipment to leave the port. A company like EJET can take care of each step for you. We will monitor packaging, handling and see that the container leaves the port as early as possible.
Tracking and receiving your shipment
It takes about 14 days for shipment to reach the West Coast of the US from China. for the East Coast, expect 30 days for delivery.
You can use the invoice to track the shipment.
As the shipment arrives, your customs broker will help you clear the customs. You can then receive your shipment. If you chose door delivery, you will receive the shipment right at your door.
Step 5. Payment
Payment is another important step in importing from China.
When to Pay the Chinese Suppliers?
The most common model is to pay 30% upfront and to pay 70% on completion. However, this may vary depending on the type of products you are ordering. For products that require more manufacturing material, you may need to pay more (50% or up).
If you are wondering what order completion implies, here is the answer. As you receive the Bill of Landing the order is completed from the supplier. The bill of landing gives you confirmation that the goods have shipped.
How to Make the Payment?
There are a few methods to make the payment:
a. Wire Transfer or Telegraphic Transfer (TT)
This is the most common and easiest method of sending money to your supplier. We recommend you to research the supplier before placing the order or hire a company to monitor the production and shipping. Without that, this is very risky.
b. PayPal and credit cards
Very few suppliers want to receive payment through these methods. The PayPal accounts aren’t as easy and common in China as in the US.
Moreover, there are higher fees that they have to pay with a credit card or PayPal.
Conclusion
Importing from China is a very profitable business when done right. Chinese manufacturers and suppliers offer low-cost production and fast turn out. Therefore, China has become the world’s largest trading market.
While importing from China can yield great profits, still, there are so many things that can go wrong. For a profitable plan, you need to do preparation, understand the market, and then plan your import business.
The next challenges are to choose a product with a great profit margin and to find a reliable supplier. Once, you have placed your order, it is important to keep a check on the whole process of production, packaging, and shipment.
For a successful experience of importing from China, choose EJET’s affordable and reliable services.
