Is difficult to import from China today? China has become a leading producer of consumer products in recent years. For business owners, buying and reselling Chinese goods can be very profitable. In February 2023, China exported about $216.7 billion worth of products worldwide, making it the top trading nation since 2013.
One major reason to import goods from China is affordability. Chinese products are often cheaper, but it’s important to research before starting this strategy. Importing large quantities of Chinese imports is common because Chinese factories are well-equipped to handle big orders.
However, importing from China can be complex. Proper planning and building relationships are essential to avoid delays, missed deadlines, and profit loss.
Here are seven steps to take before you import goods from China:
Step #1 – Choose Products to Import
First, decide what products you want to import. Check if you have the legal right to import them. Your country may have guidelines and restrictions on certain items. China also has regulations, such as banning the export of fake designer clothing and animal by-products. Research the import/export laws of both countries to avoid legal issues.
What is the main import from China?
- Meat, poultry, and animal by-products
- Seeds
- Fruits and vegetables
- Cosmetics, medical products, and pharmaceuticals
- Flammable fabrics
- Tobacco products
- Explosives
- Precious metals
- Branded products (real or fake is forbidden)
- Alcohol (without proper licensing)
- Boats or motor vehicles (without proper licensing)
Find products that sell well and have a market. Ensure they are profitable by calculating the cost of purchase versus the selling price.
Step #2 – Find a Supplier
After choosing a product, list Chinese suppliers who can provide it. You can find suppliers through trade websites, online forums, or sourcing directories. You can import directly from factories or use a professional sourcing company.
Here are the pros and cons of each:
Manufacturers:
- Pros: Lower costs, flexible design, minimum order quantities (MOQs), labeling, and customization.
- Cons: Poor customer support, MOQ options based on trends.
Trading Companies:
- Pros: Wide product range, better quality control, great customer service.
- Cons: Higher costs, limited design choices.
A Chinese sourcing company can help beginners connect with reliable suppliers but charges a 3-15% finder’s fee.
Step #3 – Examine the Product
Request product samples and manufacturing plant information from suppliers. This helps you assess product quality. While price is important, high quality ensures you can confidently sell your product.
Tip: Ask your supplier to audit your products to ensure consistency and meet specifications.
Step #4 – Classification and Calculation
Classify your product with a ten-digit tariff code to calculate the import duty. Add this duty to the product price and shipping costs to determine your selling price. Accurate cost estimates help avoid losing customers or profits.
Step #5 – Placing a Purchase Order
Companies have different rules for orders and shipping.. Most Chinese companies require at least 10,000 units per purchase order and a 30-50% initial deposit. Choose between carrier airmail for small orders (fast but expensive) or sea freight for large orders (more affordable).
Step #6 – Prepare for and Await Shipment
Consider hiring a customs broker to handle paperwork, cost estimates, and regulations. If doing it yourself, file the Import Security Filing and initial import documents, including:
- Packing lists
- Certificate of origin
- Bill of lading
- Customs bond
- Commercial invoice
When the shipment arrives, pay import duties, arrange pick-up, check for damages, and inform your supplier.
Step #7 – Make Payments to China
When sending money to China, consider using RMB (Yuan). It helps you negotiate better deals since it’s a stronger and usable currency in China. You can also use e-RMB for suppliers outside China.
Bottom Line
Understanding the supply chain and the import process from China ensures business success and sustainability. Invest time in learning the process and building good relationships with suppliers. Consider opening a virtual business account for easy and obligation-free payments and transactions. This can help keep your sales healthy and your business thriving.
And as an american company, you must learn to know the custom duties of USA, if you want to import apparel from a Chinese clothing manufacturer.