How to Import Goods From China

Table of Content

  1. Why Import Products From China?
    Cost-effectiveness
    Flexibility
    Competitive Advantage
  2. Understanding Your Import Rights
  3. Necessary Requirements for Importing from China
  4. Identifying the Goods to Import
  5. 5 Steps to Select the Right Product for Importing from China
    Enhance Your Brand Value
    Steer Clear of Hyped Products
    Import Products You Appreciate
    Avoid Unreasonably Cheap Products
    Remember Bulky Products Can Be Costly
  6. Identifying Quality Products to Import from China in 5 steps
    Distinguish Authentic from Counterfeit Products
    Simplicity is Key
    Regulatory Compliance is a Must
    Demand Analysis
    Supplier Reputation Check
  7. Find the Best Product Sourcing and Reliable Suppliers in China
    Defining Your Product Specifications
    Your product specification should include:
    The Importance of Detailed Product Specifications
    The Go-To Destinations to Find Reliable Product Suppliers in China
    Directly Importing Your Product from Chinese Suppliers
    Use A Sourcing Company To Import Products From China
    List Potential Suppliers
    How To Verify Your Chinese Suppliers?
    Requesting a Quote from Chinese Suppliers
    Identify Top 3 Suppliers and Plan Visits
    Choosing Between a Trading Company and a Factory
    Order Samples and Make Your Initial Purchase
    Strategize for Lower Price and MOQ
  8. Checking the Import Permissions in Your Country
  9. Securing Quality, Payment Methods, and Payment Terms for Chinese Imports
  10. Classifying Your Goods and Calculating the Landed Cost
    4 Key Steps to Consider Before Ordering Imports from China
    Get Your Hands on a Golden Sample
    Draft the Terms of Agreement
    Send Out Your Purchase Order
    At Least, Place Your Order
  11. Contracts and Their Significance in Importing from China
    Forming Supplier Contracts for Imports from China
    Choosing the Right Contract Type
  12. Quality Control in China: Ensuring Excellence in Imports
    Determining the Level of Quality Control Required
    Quality Control Guidance for Successful Imports
  13. Building a Long-Term Relationship with Your Chinese Suppliers
  14. Organizing Cargo Transport
    5 Key Efficient Ways to Import Goods From China
    Air Freight
    Express Shipping
    Door-to-Door Delivery
    Sea Freight
    Full Container Load (FCL) Shipping
    Less than a Container Load (LCL) Shipping
    Rail Freight
    Full Container Load (FCL) Shipping
    Less than a Container Load (LCL) Shipping
  15. Essential Incoterms for Importing Products from China
  16. Tracking Your Cargo and Preparing for Arrival
  17. Obtaining Your Shipment
  18. Understanding Customs Clearance When Importing from China
  19. Conclusion

 

How to Import Goods from China – A Comprehensive Guide

China, often referred to as “the world’s factory,” has become a global manufacturing hub, offering a vast array of products at competitive prices due to its enormous manufacturing infrastructure, skilled population, and industry experience. Recognizing the potential for profitability, many businesses are exploring the logistics and processes involved in importing goods from China. This comprehensive guide aims to provide insights into the steps and considerations involved in importing from China, including choosing products, sourcing suppliers, managing customs and shipping procedures, among others.

How to Import From China

Why Import from China?

China’s manufacturing prowess offers several advantages for importers, contributing to the country’s status as the world’s strongest trading nation. Here are some key reasons why importing from China can be profitable:

  1. Affordable Products: Chinese manufacturers have access to a wide variety of affordable raw materials and a skilled labor force, resulting in lower production costs and more competitively priced products.

  2. Wide Range of Products: China’s manufacturing sector produces a diverse array of goods, from electronics and clothing to furniture and toys, providing importers with a vast selection of products to choose from.

  3. Large Scale Production: Chinese factories are capable of manufacturing goods in large quantities quickly and efficiently, making China an ideal source for bulk orders.

  4. Government Promotion of Exports: The Chinese government actively promotes exports through various incentives, including special economic zones, tax and financial benefits, and subsidized utilities.

  5. Efficient Logistics: China’s well-developed logistics infrastructure, including numerous ports, roads, and railroads, facilitates efficient and affordable transport of goods.

Selecting Products to Import

The first step in the import process is selecting the products to import. It’s essential to choose wisely, considering factors such as market demand, profitability, legal restrictions, and product reliability. Here are some key considerations:

  1. Market Demand: The products you choose to import should have consistent and sufficient demand in your target market. Research current market trends and consumer preferences to identify potential product opportunities.

  2. Profitability: Look for products that offer profit margins of at least 30%–50%. This will ensure that your import business is financially viable.

  3. Legal Restrictions: It’s crucial to be aware of any laws or regulations that may prohibit or restrict the sale of certain products in your state or country. Failure to comply with these regulations can result in penalties, including fines, confiscation of merchandise, and even legal action.

  4. Product Reliability: Choose products that are reliable and have low maintenance requirements. This will help minimize warranty claims and customer complaints.

  5. Supplier Reputation: Ensure that the products you’re sourcing come from reputable suppliers. Check public import records, ask for references, and consider hiring a customs broker to vet potential suppliers.

Finding Reliable Suppliers

Once you’ve decided on the products you want to import, the next step is to find reliable suppliers. Chinese suppliers are typically either factories that manufacture goods or trading companies that source products from multiple factories. Here’s how to source potential suppliers:

  1. B2B Marketplaces: Online marketplaces like Alibaba, AliExpress, and Global Sources host thousands of Chinese suppliers. You can search these platforms by product category, price, location, and other criteria to shortlist potential suppliers.

  2. Supplier Directories: Supplier directories provide information on a large number of factories and trading companies. You can use these directories to find potential trade partners and contact them directly.

  3. Trade Shows: Trade shows are an excellent way to meet potential suppliers face-to-face. Major trade shows in China include the Canton Fair, Global Sources Trade Show, and the East China Import and Export Commodity Fair.

  4. Reference Checks: Before finalizing a supplier, consider checking their references or looking them up on SupplierBlacklist.com, a platform where importers can report issues with suppliers.

  5. Customs Brokers: If you’re unsure about sourcing and vetting suppliers on your own, consider hiring a customs broker. Customs brokers are professionals who assist importers in meeting federal requirements, including finding and vetting suppliers.

Negotiating with Suppliers

Once you’ve identified potential suppliers, it’s time to initiate contact and negotiate terms. Here’s how:

  1. Initial Contact: Start by sending an email or message introducing yourself and your business, expressing interest in the supplier’s products, and requesting further information, such as product catalogs, minimum order quantities (MOQs), and pricing.

  2. Sample Orders: If a supplier’s prices and terms are satisfactory, consider requesting a sample or placing a small trial order to test the quality of their products.

  3. Negotiating Terms: Once you’re happy with a supplier’s products, negotiate terms such as pricing, freight, deposit, and packaging details. Remember to keep communication clear and concise, and consider using platforms like WeChat for faster responses.

  4. Contracts and Agreements: Before placing a full order, consider signing a purchase agreement or contract that clearly defines the details of the transaction, including product specifications, shipping terms, and payment terms.

5 Steps to Select the Right Product for Importing from China

Import Costs and Customs Procedures

Importing goods from China involves various costs, including product costs, shipping costs, and import duties or taxes. Here’s a breakdown of these costs:

  1. Product Costs: This is the price you pay to the supplier for the goods. It’s typically negotiated and agreed upon before placing an order.

  2. Shipping Costs: Shipping costs depend on the mode of transport (air, sea, rail, or courier), the distance, and the weight and volume of the goods. It’s advisable to get quotes from multiple freight forwarders to compare costs.

  3. Import Duties and Taxes: Nearly all products imported from China are subject to import taxes, also known as tariffs or duties. These are charged in addition to federal and local sales taxes and are typically calculated as a percentage of the product’s value.

  4. Customs Procedures: Importing goods requires compliance with customs procedures, which include filing necessary documentation, paying duties and taxes, and obtaining clearance from customs authorities. A customs broker can assist with these procedures.

Identifying-Quality-Products-to-Import-from-China-in-5-steps-.jpeg

Identifying Quality Products to Import from China in 5 steps 

 

Distinguish Authentic from Counterfeit Products

In the sea of China’s product offerings, it’s vital to discern genuine items from knock-offs. To import quality goods, keep your eyes peeled for signs of authenticity.

 

Simplicity is Key

Chinese exports often include multi-functional, complex items. However, their quality might not always be reliable. So, go for simple goods that allow for easy quality assessment.

 

Regulatory Compliance is a Must

Before importing, make sure your chosen products adhere to safety and regulatory standards in your country. This will help you dodge legal hurdles in the future.

 

Demand Analysis

Before importing, conduct a thorough market demand analysis for potential products. Opting for high-demand items in your target market boosts your chances of success.

 

Supplier Reputation Check

Don’t forget to scrutinize your potential suppliers. Look into their credentials, customer feedback and history to ensure you’re partnering with a reputable supplier.

Import Costs and Customs Procedures

Importing goods from China involves various costs, including product costs, shipping costs, and import duties or taxes. Here’s a breakdown of these costs:

  1. Product Costs: This is the price you pay to the supplier for the goods. It’s typically negotiated and agreed upon before placing an order.

  2. Shipping Costs: Shipping costs depend on the mode of transport (air, sea, rail, or courier), the distance, and the weight and volume of the goods. It’s advisable to get quotes from multiple freight forwarders to compare costs.

  3. Import Duties and Taxes: Nearly all products imported from China are subject to import taxes, also known as tariffs or duties. These are charged in addition to federal and local sales taxes and are typically calculated as a percentage of the product’s value.

  4. Customs Procedures: Importing goods requires compliance with customs procedures, which include filing necessary documentation, paying duties and taxes, and obtaining clearance from customs authorities. A customs broker can assist with these procedures.

Shipping and Logistics

Arranging shipping and logistics is a critical part of the import process. Here are some common shipping methods:

    Sea Freight

    Sea Freight, or ocean freight, is the process of shipping goods from one place to another via sea routes. It’s the most cost-effective way to transport large volumes of goods globally, though it does take longer than other methods. More details can be found here: Ocean & Sea Freight from China. 

    Full Container Load (FCL) Shipping

    FCL shipping is the most affordable option for larger shipments, as you will be required to book an entire container (either 20ft or 40ft) for your goods. This option is ideal for businesses shipping large quantities of goods, as it offers better economies of scale.

    Less than a Container Load (LCL) Shipping

    LCL shipping allows you to pay only for the space your goods occupy within a container, making it an ideal choice for small businesses and individuals shipping smaller quantities of goods. In LCL shipping, a freight forwarder will consolidate multiple shipments into one container

     

    Rail Freight

    Rail Freight is a method where goods are transported from China to Europe using the extensive railway network. It’s an economical and environmentally friendly method of transportation, which can be particularly useful for bulk goods and heavy items. This method usually takes longer than air freight, but is typically less expensive. More details can be found here: Rail Freight From China to Europe.

     

    Full Container Load (FCL) Shipping

    FCL shipping is the most affordable option for larger shipments, as you will be required to book an entire container (either 20ft or 40ft) for your goods. This option is ideal for businesses shipping large quantities of goods, as it offers better economies of scale.

    Less than a Container Load (LCL) Shipping

    LCL shipping allows you to pay only for the space your goods occupy within a container, making it an ideal choice for small businesses and individuals shipping smaller quantities of goods. In LCL shipping, a freight forwarder will consolidate multiple shipments into one container

    Directly Importing Your Product from Chinese Suppliers

    Below are some of the most prominent platforms where you can find major exporters in China:

    • Alibaba
    • Aliexpress
    • Global Sources
    • Yiwu

    Alibaba and Aliexpress are the most common platforms for sourcing major Chinese exporters. Alibaba is a hub for factories and specialized trading companies that typically require higher minimum order quantities. Aliexpress, on the other hand, allows you to import from resellers, often in smaller quantities, but at a higher price.

    An alternative way to find reliable Chinese suppliers is by attending trade shows, where many of the best suppliers, who don’t typically advertise, can be found. The Canton Fair, China’s largest trade show, is an ideal venue to locate a plethora of suppliers. Attending industry-specific trade shows can also be beneficial in identifying specialized suppliers. A large portion of top Chinese imports are sourced via these platforms.

    China’s Premier Trade Show: The Canton Fair

    These platforms can also be beneficial if you’re specifically seeking inexpensive products to import from China. However, we don’t generally recommend this approach due to potential quality concerns.

    Use A Sourcing Company To Import Products From China

    A professional sourcing service is another safe way to import goods from China. Sourcing services are often the safest way to find the most profitable products to import from China. A sourcing company can find those manufacturers that your competitors won’t be able to find for many rare excellent products exported from China.

     

    If the sourcing company is China-based, it will have the advantage of finding in Chinese, using local connections, and using their existing suppliers’ database. For a more in-depth look at how to engage with a sourcing company and to find the best sourcing agents in China, consider reading this guide on finding the best sourcing agents in China.

     

    Lastly, the old school way: You can visit the areas where the product is manufactured and find its producers. Sometimes, you may find a great supplier who doesn’t list himself on Alibaba or any other sourcing websites. This approach requires more time and effort, but it could lead to discovering suppliers that are off the beaten path and can provide unique and profitable products.

    After Import: Quality Checks and Sales

    Once your goods have arrived, it’s time to check their quality, ensure proper labeling and packaging, and start selling. Here’s what to do:

    1. Quality Checks: Inspect the goods for any defects or quality issues. If there are any problems, contact your supplier to discuss solutions.

    2. Labeling and Packaging: Check that the goods are properly labeled and packaged. This includes information such as product details, manufacturing company, order size, and any necessary instructions or warnings.

    3. Sales and Marketing: Once you’re satisfied with the quality of your goods, it’s time to start selling. This could involve listing your products on online marketplaces, setting up your own online store, or selling through a brick-and-mortar store.

    Strategize for Lower Price

    Strategize for Lower Price and MOQ

    Before diving into price negotiations, be sure to request quotes from two or Four suppliers. Having multiple quotes gives a clear understanding of the product’s actual market value. In China, it’s important to remember that price and quality are directly proportional; unusually low prices often suggest inferior product quality.

    The chances of obtaining a lower price can be influenced by factors such as varying cost differences among suppliers, different shipping terms (like FOB, FCA), and high MOQs.

    Once you’ve gathered sufficient cost information, you’re ready to negotiate. Nowadays, prices in China have become more standardized, offering less room for negotiation. However, with effective negotiation tactics, you can potentially reduce the quoted price by 8 to 12%. Moreover, adept negotiation could even lower the quoted MOQ to half of the initially quoted figure.

    Essential Incoterms for Importing Products from China

    When it comes to importing goods from China, familiarizing yourself with certain shipping terms, known as Incoterms, is vital. These terms govern the responsibilities and cost obligations involved in the shipping process.

     

    • Understand your shipping Incoterms: Incoterms are internationally recognized rules which define the responsibilities of sellers and buyers. Knowing these terms can help ensure a smooth shipping process.
    • Establish your shipping Incoterms: Once you’ve understood the terms, decide which Incoterms will apply to your shipments. This will help set clear expectations and prevent potential misunderstandings during the shipping process.

     

    Understanding and setting clear shipping incoterms terms ensure a smoother importing process from China.

    Tracking Your Cargo and Preparing for Arrival

    Shipping goods internationally can take time. For example, goods shipped from China can take around 14 days to reach the West Coast of the United States or 30 days to reach the East Coast. Therefore, it’s important to track your cargo and stay updated on its progress.

    Once your goods have arrived, make arrangements for your customs broker to clear them through customs. It’s the importer’s responsibility to ensure that the goods comply with all the relevant rules and regulations.

    Obtaining Your Shipment

    Once your goods have been cleared through customs, they’re ready to be collected. If you’ve chosen a door-to-door service, you can simply wait for your shipment to arrive at your designated address.

    After receiving your goods, it’s a good idea to inspect them to ensure their quality, packaging, and labeling meet your expectations. If there are any issues, contact your supplier immediately to resolve them.

    Understanding Customs Clearance When Importing from China

    After you’ve identified what you’re importing from China and chosen the right manufacturers or purchasing agents, the next essential step is to grasp the customs clearance process. This aspect often confuses many traders.

    Here’s a practical example of how customs calculate VAT and tax for your imports:

    • Value of goods: $30,000 (FOB value)
    • Value of freight: $1,000
    • Total Value of the shipment: $30,000 + $1,000 = $31,000
    • Duty Value (CIF): 5% of $31,000 = $1,550
    • VAT and TAX Value (CIFD): 10% of ($31,000 + $1,550) = $3,255
    • Total landed cost of the shipment: FOB Value + Freight + Duty + VAT = $30,000 + $1,000 + $1,550 + $3,255 = $35,805

    By comprehending these cost calculations, you can more effectively plan your import budget and ensure a seamless import process from China. Understanding these nuances is key to navigating the complexities of international trade.

    Conclusion

    In conclusion, importing goods from China involves several steps, from product selection and supplier sourcing to shipping and sales. By understanding these steps and partnering with reliable suppliers and service providers, you can successfully import goods from China and build a profitable business. Remember, the key to successful importing lies in thorough research, careful planning, and building strong relationships with your suppliers and service providers.

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