→ Then this is a must read guide for your busienss. Why?
Because this article will guide you on every process of import from China and provide helpful tips for your business
Whether you have problems on shipping from China, tradeterms, customs clearance or any other topics. I have the right tips for you.Keep reading
1. Importing from China Basics
2. Import Rules and Regulations in China
3. How to Find the Right Goods from China
4. How to Find a Reliable Freight Forwarder in China
5. How to Ship from China
6. Modes of Shipping from China
7. Cost of Importing from China
8. Risks when Importing from China – How to Avoid Them
9. FAQs on Importing from China
10. How Panda can help you to Import from Chin
Importing from China help tons of people skyrocket their business;
And I’m sure you can benefit from it and boom your busienss with the big Chinese manufacturing market.
So let’s dive right in.
1.1 Why you should Import from China
China is a global manufacturing and trading powerhouse. It is also the leading exporter in the world today.
Now, look around you.
Let’s start with: (They are most probably from China)
● TV set ● Furniture and furniture handles ● Stereo system ● light Bulbs ● Entertainment ● Cooking pots ● Coffee mugs ● Dinner plates ● Cutlery ● Electrical enclosure
A large percentage of items that we see around us are either made or assembled in China. An importer somewhere just did you and me the favor of getting these products from China. And, this is just so that we can access them quickly. But then again, why should you import from China?
● Importing from China is Good for Business
It makes perfect economic sense. Be it importing from China for personal use or reselling.
Here are reasons why;
1. China offers you a wide variety of goods. Here, you have a choice of what kind of products you should import. Besides, as a business, this can help you to diversify. By doing so, you increase your business’ chances of growing. Diversifying can also help maximize your market share.
2. Products from China are often low priced. This is great as it allows you to resale them competitively thus giving you an edge over your competitors.
3. The Chinese trade sector is growing, and new trends keep emerging. This means that there’ll always be new products on the market. With this, it’s easy for you to sell different products to consumers at different times.
4. China is continental trade-wise. As I’ve told you, it is the world’s second-largest exporter and a trading and manufacturing powerhouse. Importing from China, therefore, provides you with lots of markets at so many different levels. Generally, the country opens up lots of opportunities for businesses and individuals.
5. Cheaper wages, easily accessible materials and expert designers characterize the Chinese manufacturing industry. These three things allow for products to be made quicker, cheaper and in large volumes. Thus, it is hard to dispute that China is just the place to manufacture or even assemble your goods.
6. Another thing, the demand for goods from China is rapidly increasing worldwide. This is mostly due to their affordability. It, therefore, means that you’ll never run out of the market for goods you import from China.
As you can see, China is the right place
to import products from.
The country is just perfectly structured for trade.
Cheaper wages, plenty of resources, expert designers, trade infrastructure, friendly trade laws and all makes China a perfect trade hub.
1.2 Top products to import from China
As I’ve told you already, China is a humongous economy.
The country whose economy is on a steady rise since the last few decades now ranks as the world’s largest trading nation.
Here is something that might interest you:
Initially, the Chinese economic model was designed to focus on often producing low-end goods. These goods were then exported in mass volumes to other parts of the world.
Today, however, I must say that China has done well in streamlining its economy to one that is more consumption driven. With the demand for goods in the US, European and Japanese markets are slowly decreasing, the change had become inevitable. New ideas, innovations, and strategies were necessary to help China grab a share at more emerging markets. They also had and still have to meet the expectations of these markets.
That’s why the Chinese manufacturing industry is currently adopting technologies with new levels of sophistication. The type of goods they are producing is not just the usual electronic components and apparels. China today produces a wide range of goods including vehicles, aircraft components, medical equipment, etc. The country is currently moving towards high-value production not the usual low-end goods with mass exports. Honestly, the transformation in China ‘s economy is real and sound.
Even western manufacturers are finding themselves competing with China for global market share.
I mean, with little steps as you can see, China is now dominating world trade. Its GDP alone in 2017 stood at USD 11.7 billion. This is the second best after US’ USD 19.4 billion. You can follow this link to learn more about Chinese economic outlook. As I’ve told you severally, China is the world’s biggest exporter and the largest trading nation in the world.
We can’t expect less of a country whose annual export for goods estimates totals USD 1.904 trillion. Take in 2017 alone for example; China shipped a whopping USD 2.271 trillion worth of goods to destinations across the world. Comparatively, there has been a significant increase in these figures since 2016, an increase of at least 8.3%.
Most of the goods that account for these figures include;
● Electronic devices and equipment ● Clothing and accessories ● Agricultural produce, i.e., cotton, tea, soybeans, potatoes, and rice ● Furniture ● Plastics and associated items ● Organic chemicals ● Vehicles ● Machines, engines, and pumps ● Medical and technical equipment ● Ores ● Oil feeds ● Copper ● Footwear ●Confectionary
Those are not the only products that China exports. There are more that unfortunately, we won’t be mentioning today. You can, however, find them online to have a better understanding of the best products to import from China. You also should know what destinations you should import your made-in-China products. Read on to find out more about this.
1.3 Main import destinations from China
With the facts given above, it’s pretty apparent that China is a market that’s hard to ignore. Being the world’s largest trading nation, China has worked on its transport infrastructure. Considering the amount of trade ongoing in the country, there are a variety of means for freight transportation.
There is air freight, sea freight, rail freight and courier services in China. The availability of all these make it all the more possible to ship your goods to any destination across the globe Majorly, however, China ‘s import destinations are;
● China to the USA
The United States is China ‘s largest and most comprehensive trading partner. The two countries traded an estimated USD 711 billion worth of goods in 2017. Note that there is an imbalance in the trade between China and the US as China imports very little from the US.
This is something that is bringing contention on the state of trade relations between China and the US. Despite this, however, the US remains the largest import destination from China.
The main imports from China to the US include:
● Electrical equipment
Note that there are lots of convenient ways to transport imports from China to the US. Sea and air freight nonetheless remain to be the most popular mode of freight transportation from China to the US.
● China to Canada
Canada is about 5447 miles away from China. This is entirely a distance which surprisingly doesn’t hinder trade activities across these two countries.
You may wonder why and how?
Well, I’ll tell you this, again;
China is a country that has steadily risen to become an economic powerhouse in the globe. This has and continues to open up immense opportunities for people to import goods from the Asian trade giant. These include Canadian companies, small business entities, and individuals.
So if you want to import goods from China to Canada, you needn’t worry as there is an excellent market there. If you don’t believe me, look at these numbers. 2013-2014 trade statistics show that Canada and China exchanged about USD 73.2 billion worth of goods. Among the USD 73.2 billion, USD 52.7 were imports from China. That’s about 71% of the total amount of goods traded between these two countries, right?
Well, there you have it.
And, note that this figure keeps increasing yearly as demand for goods from China keeps rising. So what can you import to Canada from China?
The Canadian market seems pretty prime for some goods such as:
● Electrical equipment
● Computer and peripheral equipment
● Communication equipment
● Telephone apparatus
● Audio and video equipment
● Plastic products
● Iron and steel articles
● Women cut and sew clothing
● Woven and knitted apparel, just to mention a few.
● China to the UK
While the UK is a major destination for imports from China, it does not beat the US. UK and China trade a total of about 84 billion dollars’ worth of goods annually.
This is only a third of what the US imports from China. But that’s not the issue. The UK, as I’ve told you, trades about 84 billion dollars of worth with China annually. Out of the 84 billion, about 50 billion dollars are imports from China. This is a record high basing on the 2016 UK China trade statistics. Looking at trade goods, imports from China to the UK totaled 46.9 billion euro in 2016. Comparing these with former years, UK trade with China has increased tremendously.
The best part:
This trade relationship is bound to get even better.
The British Prime Minister made a recent announcement of plans to sign a trade deal that will benefit both countries.
This only means that importers in the UK should be looking forward to an increase in ample business opportunities. Most imports from China to the UK are miscellaneous manufactured articles.
Other imports include:
● Electrical machinery and equipment
● Telecom equipment, etc.
● China to Japan
Japan is known as the land of the rising sun. It is a major economic giant just like China and political power too. While both hail from the eastern Asian region and at close proximities, they share a cordial trade relationship. China serves as Japans largest trading partner in term of imports. Being the world most complex economy, Japan imports close to $550 billion worth of goods yearly.
Among these, about $120 billion are imports from China.
These imports include:
● Mineral fuel
● Machinery equipment
● Medical and technical equipment
● China to Australia
China also makes quite a significant number of products to Australia. The distance between these two nations is somewhat above 7000km. Interestingly, the economies of China and Australia are to some extent complementary. This makes trade and investment relationship between these nations a substantial aspect.
For a long time, shipping from China to Australia has mainly been through ocean freight. This is necessary considering that the boundaries of these two countries share a large water body. Furthermore, shipping via ocean freight is comparatively cheaper because most of the exports are bulky.
Some of the everyday goods that China exports to Australia include:
Chinese bottled wine
In 2017, the worth of China -Australia trade was approximately USD 129 billion, a significant increase from the previous year. Incidentally, this is an indication that indeed the volume of imports that Australia receives from China is quite substantial. Shipping from China to Australia can as well be possible using air freight only that it is bit expensive. Nonetheless, it remains the only viable option especially for importing relatively perishable items.
● China to Africa
China has for a long time been exporting various types of goods to different African nations. However, in the recent times, the volume of this exports has been increasing tremendously. Of course, that is a clear signal that the trade between these two regions is expanding.
Africa is seemingly one of the largest countries but with many landlocked nations. Therefore, ocean freight doesn’t seem to be the best mode of shipping goods to Africa from China. Nonetheless, countries such as South Africa, Kenya, Nigeria, Angola, Morocco, and Egypt have recorded significant figures regarding imports from China.
Some of the goods that China exports to this region include:
● Affordable electronics
● Communication equipment
● Gaming equipment
● Pharmaceutical equipment
Additionally, the African market for Chinese products also seems to be opening up more. This means that the excessively produced goods can find a ready market in Africa. As it stands, China continues to import different products from different products to various African destinations using ocean and air freight.
● China to Russia
Arguably, Russia has for the longest time been a trading partner with Russia even during the ancient days. This partnership is attributed to the fact these two nations share a common landmass only separated by a little known Mongolia.
The infrastructural network between China and Russia is what contributes effectively to the importation of goods from the former. Currently, “The New Silk” road and railway network adds significantly to the Russian importation activities of good from China.
As of 2017, the estimated net value of Russia’s imports from China was approximately USD 48 billion. Incidentally, this represents more than 21% of the total goods that Russia import, which is quite a significant number by all standards.
And at that point and by extension today, China tops the list of countries that export different goods to Russia. Machinery Medical equipment is a notable products that China exports to Russia. They amount to about $13. 6 billion. Electronic equipment, footwear and vehicles follow the pack with an estimated amount of $12, $1.65 and $1.6 billion respectively.
The bottom line here is that Russia provides quite a considerable share of the market for various Chinese products. And the importation also becomes easy because transportation between these two countries is convenient.
● China to Mexico
The distance between China and Mexico is close to 8000 miles. This distance is quite far, but the fact that the Pacific Ocean separates both countries helps significantly in ocean freight. Mexico imports from China accounts for 17.6% of its total goods which translates to over USD 74 billion
It is a significant figure which places China at the second position after the US by Mexican import goods.
The main imports include:
● Electronic equipment leads with an approximate value of USD 30.5 billion
● Machinery with a value of USD 16 billion
● Medical and technical equipment
● Plastics extrusion machine
● Organic chemicals among others
As I had stated earlier, a convenient method of transporting bulk goods from China to Mexico is via ocean. Several shipping companies offer transportation of different items using ocean which do not necessarily require urgency. From the port of Shanghai, China to port of Manzanillo, Mexico, it can take slightly between twenty to thirty days for goods to reach the destination.
Of course, that can be somewhat longer especially for transporting relatively perishable products or goods that need to be in the market straight away.
● China to UAE
The UAE is among the top 20 largest importers in the world, a clear indication of where it stands when it comes to importing from China. For the longest time, possible China was the fourth largest UAE import destination after India, Switzerland, and Japan. However, as of 2017, China became the leading import destination for UAE if the recent statistics are anything to go by.
Mainly, Chinese products account for 11.4% of the overall UAE imports, which translates to approximately USD 26.5 billion. The leading import products from China to UAE is electronic equipment. These products represent USD 4.4 billion the machinery follows at USD 4 billion.
As one of the leading UAE import destinations, movement of good between these nations is mostly via ocean. However, air freight is also available for transporting goods which seem to be so time-conscious such fashion items.
In a nutshell:
These are some of the leading destinations for importing goods from China. You can still import to other areas using a wide range of transport methods depending on the:
Basically, you can import to any part of the globe from China. And I can not list very countries here, China ship to almost every country and area in the word.
There is need to make sure that you understand all the rules and regulations surrounding importation in China.
And that is what leads us to the next chapter.
Import Rules and Regulations in China
Ordinarily, every country all over the world has its guiding principles surrounding
the importation of products.
China isn’t an exception.
So if you are interested in importing from china, you might want to learn the country’s specific custom rules and regulations. There are plenty of import opportunities in china. There are also specific rules and regulations that you should know in advance before importing from china.
So without further ado – here is what you need to know about the rules and regulations of importing from china.
2.1 Import Licenses when Importing from China
Importing from China requires some paperwork, licenses or some documentation.
These Chinese documentation, will depend on the products you are importing from china and in what scale. For instance, if you are importing food, drugs or medical devices, you may need to get a product specific license. Otherwise, it will be pretty hard for you to import these kinds of goods from china. If you want to set up a company in china to facilitate these processes you will need further licenses.
In addition to the product specific license, you will have to apply for a business license. This is what will indicate the government’s authorization for you to set up an import company in china.
If in the case of setting up a company, you will also need to apply for an export license if importing from china.
This is in addition to the other two licenses we’ve mentioned above. The procedure for applying an import from china license is as follows;
File your foreign trade operator filing at the Ministry of Commerce People’s Republic of China
Register with the Chinese Customs Authority
Register with the Chinese Inspection and Quarantine Bureau
Register with the e-port
Make a foreign exchange registration with the local state administration of foreign exchange
Before you obtain a license to import from China, there are specific prerequisites that you need to meet. Besides, you all so need to provide all the necessary paperwork to import from china. Obtaining this licenses is not inherently a demanding task especially if you have all the pertinent documentation and knowledge.
2.2 Special Trading Zones in China
The ever-growing trading activities prompted China to establish special trading zones all over the country as a way of attracting importers.
What happens is that these zones facilitate trading both for importers and exporters.
These zones also vary slightly. In other words, the authorities regard these zones as being outside of Chinese custom surrounding.
It thus means that any transaction between entities operating inside and outside the zones merely handled on the import-export basis. In simple terms, the Chinese companies that buy from these zones are seen as importers. And, those selling to the zones are seen as exporters, with each paying and receiving duties respectively.
In most cases, these trading zones provide areas for Chinese exporters to coordinate their trading activities.
So you’ll realize that both Bonded and Export processing zones tend to lean much more on Chines exporters.
2.3 Importing Documentation and Paperwork
When you’re importing goods from China, it is entirely apparent that you must obtain all the relevant documentation and paperwork.At various stages of the importation, you’ll realize that you’ll need to submit such documents, either copies or original documents.
Documentation that you may need when importing from China include;
Bill of lading
Country of origin certificate
Acquisition of such credentials and related documents start from the moment you submit the request to a particular company.
This process can be tedious because of the many dynamics involved. So the ideal way of handling it is using agents.
They have a better understanding of how to deal with various elements which require importation documentation and paperwork.
Additionally, things like language barrier may at times hinder you from understanding the concepts.
And it follows that the misunderstanding might lead to going against a particular policy rule which could further lead to more trouble.
Another fundamental aspect regarding the same is always to ensure that you retain at least a copy of every document. This may come in handy in incidents where there is a need for validation of your consignment. And in the end, it helps you to prevent unnecessary inconveniences.
I have some more resources for you here:
Common Import-Export Documents
China Import Export Documents
China Clearance in China
2.4 Import Duties and Taxes
What happens with importing goods from China is that your company will pay three categories of taxes depending on the types of product it deals with.These taxes include:
You will pay consumption tax if you deal with products like motor vehicle accessories, high energy consumption products, jewelry, and cosmetics.
On the other hand, you will pay import duties on the price you pay for the consignment. These include insurance as well as transportation charges.
And the VAT comes in during calculation of the price of the imported goods including consumption tax and customs duties whenever applicable.
Import duties and taxes note are payable at destination. Here are some useful guidelines:
Calculating Import Duties and Taxes in China
China Import and Export Duties
2.5 Prohibited, Restrictions, and Quotas
This is an interesting but also a serious concern that you have to look into when importing goods from China.China is very strict in all aspects revolving around exports and imports. And it is for that reason you should know some of the products that are prohibited, restriction and quotas.
So the best, in this case, is to find out the particular items which fall into this specific category. Importance of this is it’ll keep you safe and prevent any unnecessary inconveniences.
Prohibited imports are quite a number, and some of them include:
Peat and forest biomass products
Nickel and silver alloys, just to mention a few.
On the other hand, restricted products include:
Rare earth minerals
Compounds substances with chlorofluorocarbon, etc.
So whenever you’re thinking of importing goods from China, it would be ideal to ensure that you do thorough background research.
So that at least you know the products that you can easily import and those that the government does not allow investors to import.
Ship carrying containers from China
In general, though, the import rules and regulations of China are not far much different from that of many other countries. In fact, you’ll find that the Chinese government has made it easy for foreign investors to import products from this country.
It is only that there is a need for imposing such regulations to create order and proper coordination of importing activities. The subject of importing from China comes with a lot of detail regarding custom rules and regulations.
To minimize problems and unnecessary costs, take the time to understand the bits explained above. In that order, let’s now help you to find the right goods from China.
You can learn more from here:
China Restricted and Prohibited Imports
China Prohibited and Restricted Imports/Exports
How to Find the Right Goods from China
Initially, the importation business was once viewed as a territory for multinational
companies and big businesses.
This was before the advent of technology and globalization. Today, nonetheless it is possible for small and inexperienced individuals to look across China for the next product idea.
You don’t need to have a massive office with hundreds of employees to be able to import from China.
Besides, you don’t need to:
Live in China
Have any Chinese relations
There are so many ways of finding the best products and shipping it to your country. For example, you can use a Chinese sourcing agent and hire a reliable freight forwarder in China.
All you need is:
Identify a product
Know where to find suppliers
Find the supplier
Make your order and you are set.
That said, let me walk you through how to find the right products in China:
3.1 Identify a Product
The first step to finding the right products in China is to decide on the kind of product you want to source. Do you want to source an existing product, a deviation or an invention? Existing products, are those that are continuously made by factories in China.
For these, all you’ll need to do is contact a few suppliers, get their best quotes and do a quick check on their product.
If you plan to source an invention, you’ll have to ensure that suppliers clearly understand your specifications. Not only that, but they also have to be sure that they can meet the specifications with whatever resources they have.
Some of the items (deviations and inventions) that can be bought from China cheaply include;
Non-designer wear clothing
So if you decide to import off-the-self or customized items from China, avoid suppliers that offer branded items. Most of the suppliers that claim offer branded items are mostly aiming to scam unwary and inexperienced buyers. So where can you find reliable suppliers in China? Find out below.
3.2 Where to Find a Supplier in China
Knowing where to find the right suppliers is essential to finding the right products for your business. Fortunately or unfortunately, China has too many suppliers and manufacturers. They are so many that you can’t afford to look through all of them. Luckily, there are lots of ways through which you can locate these suppliers easily and quickly
● Trade Fairs
While looking to find the right supplier, I recommend that you look through the following websites.
If you didn’t know, the above is the largest online marketplaces in China and the Far East. These sites are known to contain valid information about a majority of Chinese suppliers and manufacturers.
However, not all suppliers on these sites are top quality. As such, you must do your due diligence to ensure that you pick a reliable and trustworthy supplier. (I’ll show you how in section 4.2 of this chapter). Don’t let that discourage you though; you may find valid information here about hundreds of Chinese suppliers. Besides, there is an advantage to using these sites. You can contact suppliers directly on the websites and get quick responses.
You have an option of requesting for a proposal from some suppliers. You can find this on ‘request for proposal option’ on some websites. Please note however that when requesting for a proposal you may not get a response from all of the suppliers. But then, this is no matter when it comes to business.
● Market Places
Another way to find suppliers in China is through trade fairs. Attending trade shows can help you find reliable information on possible suppliers and manufacturers. In China, for instance, the ‘Canton‘ fair is the most popular trade show where you can find the information you need. The Canton fair often holds every twice a year.
Besides this, there are also industry-specific trade shows that are often held around the world especially in Europe. Through these, you can meet Chinese suppliers directly and build guanxi (Chinese for connections or relationship).
Other trade fairs in China include:
Yiwu Trade Fair
Beijing International Auto Show
Bauma China 2016
East China Import and Export Commodity Fair (ECF)
Apart from these, you can find other trade fairs here: Trade Fair Dates.
● Online Exchanges
I understand that attending trade fairs can be restrictive regarding time and resources. Not to worry though as there are other efficient ways of finding a reliable supplier or manufacturer. One such way is through online exchanges. This is by far the easiest and most efficient way of finding a supplier in China from any part of the world.
Its advantages are vast:
You can find a wide range of suppliers.
Save thousands of money in commissions and marks up from intermediaries.
Generally, online exchanges also are the perfect way of finding a suitable manufacturer for your products.
Keeping recommendations from your importing agents can help you find a reliable supplier in China.
NoteRecommendations can help you save lots of money and time but only if you find a trustworthy supplier.
Now, let me take you through how to verify suppliers from various B2B sites like Alibaba.
3.3 How to Verify and Choose Good Suppliers on Alibaba
When importing from China, the first step is always to find a hot product. But how can you find a hot product if you can’t find a reliable supplier in the first place? Well, as I told you, in this section, I am going to show you how to select and verify suppliers.
But before that;
Find a Supplier or Factory
Verify Supplier’s Contact Information
Verify Every Detail of the Product & Information
Focus on Credibility of the Supplier on Alibaba
Find a Supplier or Factory
Note that finding a company/factory that can supply you with a quality product is very important. In China, many suppliers and manufacturers can do this. The problem, however, is that they won’t come to you.
You need to find them, and Alibaba is just the right place for this. On Alibaba, you can find the goods you want cheaply and be able to sell them at competitive prices for a reasonable profit. It is easy enough to identify a product to import.
However, finding a legitimate and reliable supplier is not a walk in the park especially on a platform like Alibaba. Let’s be honest: Not all suppliers on Alibaba are trustworthy. A good number of them are fraudsters and scammers.
Verify Supplier’s Contact Information (Address, Phone Number, Province, etc.)
As such, you must be able to verify suppliers that you find on this B2B site to avoid falling victim to scammers. First of all, you need to always get the suppliers business name and registration number from their website. Just click on the supplier contact information. If they have provided a website name or link, click on it and get this information.
If you find this impossible, ask straightway for contacts details like complete physical address and phone number. The phone number should be a landline. It is easier to verify the credibility of businesses using landlines. Once you get these details, check their validity especially the address. You can use address directories available online for this. Best of all, call the supplier on the phone and talk to them.
NoteVerifying the contact details of suppliers is necessary and very important for first-time buyers.
So if you are unsure of conducting over the phone transactions or negotiations don’t stress over it. Just let the supplier have their local representative to talk to you in person.
Verify Every Detail of the Product & Information about the Deal
Insist on getting a product description and photos of products you intend to buy. The supplier should be able to provide these. You should also ask questions about the method of shipping and possible delivery date in case you order goods. You don’t want to rush into ordering goods from a supplier that will take forever to deliver. Be aware that a trustworthy supplier will always tell you at once when and how you can expect to receive your order.
If the supplier you’re dealing with gives vague answers to questions you ask, then it’s likely that they are fake.
Focus on Credibility of the Supplier on Alibaba
Another thing, to verify the credibility of the supplier, you should be able to confirm the quality of their products. You can ask the supplier to send samples and makes arrangements for you to visit their warehouse or factory.
A legitimate supplier will readily accept these requests. A fake one will be quick to give excuses as to why you cannot visit their warehouse and such like things. Now, here is where the problem often comes in; Some suppliers will readily agree to almost all of your conditions and requests. If a supplier quickly agrees to your given delivery schedule, order quantity, packaging, etc., be wary.
Any reliable and trustworthy supplier will have questions of their own and will try to negotiate some conditions. They will want to know the exact specifications of your order, preferred shipping method, etc.
That is why I said, if you are unsure of the credibility of a supplier, have them send a representative.
This will give you a chance to determine if the supplier is legitimate or not. How do you avoid scammers and fraudsters on Alibaba? Well, Alibaba itself has put up measures to help visitors quickly identify credible suppliers.
In your search, you find there are suppliers whose profiles have an ‘A&V check’ ‘trade assurance’ and ‘Assessed tag’.
What do they imply?
‘A&V check’ – shows has successfully undergone Alibaba’s authentication and verification process.
Trade assurance – this means that a supplier takes part in Alibaba’s trade assurance program.
Assessed – shows that a supplier has been inspected on Alibaba.com by third a party inspection company
Gold supplier – these are supplier that have paid to undergo additional verification process. Note that they are suppliers who have completed onsite authentication and verification.
So do you want to find a trustworthy and reliable supplier quickly and without running any risk? Well then you’ll have to filter your search to the above named aspects.
Please be aware:The above tags are not a guarantee that a supplier is credible. While this may help you narrow your search and reduce the number of possible scammers, you will have to conduct additional verification. You will have to contact the supplier, visit their warehouse/factory etc. to ensure that everything about them is as they say.
Another thing, Alibaba regularly provides a feedback mechanism for the customer. Here, buyers can leave their evaluation and comments about the suppliers that they have done business with. This way, you can have firsthand, reliable reviews of potential suppliers. Ratings are also an excellent way to find out if a supplier is worth your look or not. In this case, you should always go for suppliers with a four-star rating and above. I know this may already be cliché, but I’ll say it anyway;
3.4 Order your Goods in China
Trust me, the hardest part of importing from China has always been to find the right supplier. Once you find that one supplier you can trust, everything else falls into place.
●Request for a Product Sample
After finding a potential supplier, the next step should be to order for a sample before you make the actual order.
The truth is:
It is easier to verify the quality when you have it physically. If the quality satisfies your needs, proceed to order.
Now, to order, you need to begin by negotiating the
terms of sale. I can tell you this for free;
negotiation plays a critical role in the import
from China business.
You need to agree on the:
Terms of payment
Shipping method, etc.
As you negotiate, don’t forget the fact that every supplier would have a price limit below which they can’t go. This means that you’re likely to end on the negative side. When this happens, the supplier may end up using low-cost materials, low quality, manufacturing, shoddier packaging among other things.
As such, take importance in your primary objective to build a long-term relationship. You should never negotiate too much during the first order. Agreeing to a slightly higher price the first time increases your chances of getting discounts for subsequent orders. One more thing, coming to terms with Chinese suppliers is an unending process. It is quite a common thing that you should anticipate when importing from China. So how do you go about negotiating?
While Negotiating the Price, Focus on Long-term Partnership
First, find a reasonable price front through email, Skype or telephone. Negotiate the target price on this front keeping in mind the possibility of a long-term relationship.
Make sure you agree on the:
Minimum order quantity
Method of shipping
Terms of payment, sale and return
You must verify all these before signing any contract. Also, check with the supplier for any other due diligence that you have to meet and complete. After this, you can then proceed to make your order knowing that you will get absolute value for your money.
Just remember this:
There is never an end to negotiating when importing from China. So, when buying goods from China never stop negotiating. You’ll think that you’ve gotten the best price in the first instance.
But wait until you realize how low you can get the goods on your 5th order. Sometimes, you can even get goods at 50% lower than the original price. That’s just China. Nothing remains constant. In all this though, I must say that guanxi plays a significant role.
So if you can, try to build strong and lasting relationships with the key players in the business. Also, cut links with your suppliers in China just because you’ve built up your business. Keeping in touch can help reduce your allowable MOQ by up to 50%.
Talking of MOQ, what is it?
3.5 What is Minimum Order Quantities (MOQ)?
I realize that I’ve mentioned MOQ many times up to this point, but I haven’t really told you what it is. Some of you may know what an MOQ is while some may not. Either way, MOQ is an abbreviation of minimum order quantity.
It refers to the minimum quantity of a product that a supplier is willing to sell. In China, this requirement is very crucial such that if you can’t match the MOQ set, the supplier cannot agree to sell. Now, let me take you to another critical aspect.
●Why Most Chinese Suppliers have High MOQs
As keep telling you, Chinese products are affordable. This means that suppliers in China enjoy minimal profits as low as 2% to 3%. Like every other business, these suppliers are in to make profits and continue to stay in business.
For that, they have to sell in large volumes otherwise they want to be able to break even. Another reason for the high MOQs in China is because the suppliers also struggle to meet MOQs set by their subcontractor. Remember that manufacturers’ source materials and components from other suppliers. These other suppliers have a set MOQ for their products too. So, to meet the subcontractors, MOQ products suppliers in China also have to set high MOQs.
This is the only way they can be able to keep buying on the order-to-order basis. And by the way, this is the reason why you’ll see different items in China having different MOQs.
A third reason for the high MOQ could be because Chinese suppliers specialize on make-to-order production.
Most of them don’t keep stock. If you consider this, you’ll realize that it is hard for them to supply goods in small quantities.
Don’t worry though, MOQs can be lowered although not in all, but most cases.
● When Can Chinese Supplier Lower MOQ?
Yes, it is possible, and there are various ways to do it. You can choose to use standard materials and components-for customizations. I understand that selling customized goods can be profitable for your business. Nonetheless, most of the items used to produce these products are expensive to acquire. If instead, you allow your supplier to use generic components that are easier to get, they’ll lower the MOQ. For a first MOQ, you can try to negotiate with the supplier to lower it a little bit since MOQs also vary with suppliers.
Here is the truth;
Most people overlook negotiations when it comes to MOQs. In a real sense, however, this should be the first step if you want it lower. As you do this, keep in mind that suppliers tend to be rigid on lowering MOQs. So even as you make the negotiations, try to keep it reasonable.
Also, to be able to convince a supplier to lower the MOQ, you need to show seriousness. For instance, you can begin by ordering for samples or visiting the factory/warehouse before negotiating the MOQ. You might even be lucky to find suppliers who don’t have MOQs. It all depends on the kind of product you want to import and in what quantity.
Also, if you are only looking to import in small quantities, try to consider smaller suppliers. Here is the thing; smaller suppliers are often flexible and open to negotiations. Unlike big suppliers, smaller companies tend to produce goods in smaller quantities. As such, their MOQ maybe a lot less than those of the established manufacturers. Besides, small entities tend to be thirsty for business. Therefore, they are highly unlikely to refuse to sell simply because you can’t meet the MOQ requirements. Again, for very expensive machines, MOQ will be lower. It can be even 1 piece or unit.
And please, don’t get me wrong:
You should think of MOQ this way:
The more times and quantity you buy, the more the cost per unit gets. For instance, if you are buying 10 units, don’t expect to get the price of 500 units because the quantity is simply lower. Also, a supplier will not sell you ten units because they can’t invest their manufacturing resources to produce a small quantity. If they do this, will they end up losing a lot of money?
It is just the same when you go buy goods from a wholesale shop. You cannot buy one item at the price of when you buy ten. Unless of course if you don’t mind buying the item at the price of one.
Actually, for those of you that don’t want to import in large volumes, you don’t have to worry about MOQs. As I’ve told you, some suppliers don’t have MOQs. Most suppliers on AliExpress, for instance, don’t have MOQS. You might not like the prices there if you compare with what you would pay for the same item on Alibaba.
As an importer, however, you have to ensure that the landed cost of your items makes economic sense. Unlike duty and taxes, most of the charges, in this case, are often fixed, i.e., CHA, multimodal freight, and warehousing charges. So if you are importing for commercial purposes; You must ensure that your imports quantity divided by the CIF charges are competitive even after adding the profit margin.
The overall value per unit item should suit your target market.
The bottom line:
When considering MOQ, it is always best if you ask around and research more before you decide to get into a supply contract.
3.6 How to Contact a Third-party Inspection Company to Inspect your Goods
Now, you’ve done your research to find a good supplier, finally found one and have even made an order for products. The next step should be to perform quality checks. Quality control, should be done well before the manufacturing process begins. So that after verifying the sample product, you can now find out what step the supplier will take to keep quality under check.
Keep this in mind:
Product quality often depends on the raw materials used to produce it. The steps that a manufacturer will take during the process of manufacturing is also vital and should be continuous. So once your order is ready, you can do either of the following things to verify their quality;
Trust the supplier and their steps for quality control. This is only recommended if your order is small. If you made a larger order, then this might not be the best step.
For larger orders, you can have a representative from your supply chain to manage quality control. Note, that this is only possible if you have resources in China. You can use the resources to keep watch on the product quality throughout the production stage.
Or, you can hire a third party inspection company to manage the quality inspection on your behalf. If you’ve ordered a considerable amount of goods, this may be your best option.
Let’s talk about the latter which is using third party inspection services.
First of all, what is a third party inspection company? Well, this is a company that acts on behalf of companies and individuals that import from China. They are companies that act in your best interests (as a buyer) to ensure that you receive goods of good quality. Basically, what these companies do is send inspectors to your supplier’s factory/warehouse to verify the quality of goods produced.
While third-party inspectors work in your best interest, they always try to stay neutral during the inspection process. This neutrality helps them greatly to provide nonbiased reports.
So how do you contact them?
Easy, there are very many companies offering third-party inspection services in China. All you need to do is search online and pick a company whose package, experience and service provision seem to be most promising. As you do this, ensure that you consider companies that are recognized by the Chinese government.
These should be companies that haveISO 9001 and AQSIQcertification
Once you find a potential company to work with, you can contact them directly on their website. You can also make contact via email, phone call or Skype to the company and inquire about their services and charges.
3.7 Packing & Labeling
When importing from China, the process as you can tell is quite straightforward. You identify a product, find a supplier, make negotiations, agree on terms, order goods, and make payment. When paying for goods in China, you can either pay in part or in full. Part payment is where you deposit production to commence and finish up when goods are ready.
So once you’ve made your order, you wait for the supplier to produce the goods and get them ready for shipping. Now, as I’ve told you before, it is your responsibility after making an order to ensure quality control. You need to ascertain that you are getting what you pay for. Regarding this, it is crucial that as you order for goods, you also specify the product in detail. This should also include the product packaging and labeling. These note as must comply with the import regulations of the product destination. Now, what about packing and labeling? In the import/export business, every country has its regulations on how imports/exports must be packaged.
Generally, all imports and exports have to conform to the set medical and safety rules and regulations.
In China, for instance, packaging materials need not be poisonous or dangerous. The Chinese government also encourages the use of materials that are biodegradable and recyclable.
If using wood packages when importing into China, the packages have to have an IPPC mark. So basically, there is a lot that needs to be taken into account when importing to any country.
In your case, find out what regulations apply for imports into your destination country. Once you find this out, ensure that you pass the information to your supplier during the ordering process. This way, it is easy for them to pack the goods and label them accordingly to avoid problems with customs.
Labeling requirements specify that goods must have a name and address of the distributor in the destination country. Some countries may also require that you indicate the product’s country of origin on the label. Therefore, ensure that you get this right. And, during the inspection, it is also essential to check on the labeling to be sure that everything is in order.
3.8 Arranging the Inspection
Okay, you already know how to find and contact a third party inspection company. But do you know how to go about the inspection process?
Well, let’s find out.
As I said, quality control is critical in the import from China business. You don’t want to order and ship goods only to realize that poor quality, faulty or poorly packaged. In that case, inspection is necessary. It doesn’t matter whether you do it personally, get your company agent to do it or a third party inspection company.
The bottom line?
Quality control has to be done right from when manufacturing begins to when goods are packaged. That said, the process of inspection is simple. For one, you need to decide on who will conduct the inspection.
Let’s say you choose to use a third party inspection company; this is how it will go down: You will get samples from your supplier, verify its quality, and make recommendations on how you want the final product to be. After this, you will then give this sample together with the recommendations to the inspection company.
Now, third-party inspection companies work on your behalf as your savior in case of a non-compliant production.
Remember this from our previous discussion in section 4.5?
Now, due to this, it is apparent that you have to feed the company with every information that’ll help them do the job.
This is very important especially if you are sourcing a somewhat complex product like an electronic device. And by the way, understand that the inspection company will only follow your specifications and requirements.
No more no less. So if you miss out any crucial details, they will not take any actions once production is complete.
What’s worse is that they also won’t be liable for anything at any point. Therefore, be sure to include all that is needed no matter how trivial.
Here is What Happens after Sending Back Sample with Instructions
After the inspection company receives your instructions, it will prepare a checklist which you’ll need to verify. As you do this, you may adjust the list to suit your needs.
NoteThat the sample you provide to the inspection company will be used as a reference for the inspection process.
This is where you’ll realize the importance of giving clear instructions to the supplier for the sample preparation process. Beware not to allow for the inspection to be done without a sample. Otherwise, you will be disappointed when the final reports do not match your expectations.
Suppliers are in businesses such their only concern is to ship out and get paid as soon as possible.
Take this with great importance:
Inspection requirements keep changing year in year out. Here is a simple quality test for photochromic film and sheet.
Today, therefore, it takes a lot of effort to inspect products to ensure that they meet your expectations. Keeping this in mind, you should only use a reliable, professional and experienced inspection company. So don’t rush to hiring an inspector without experience just because they charge less. Now back to the inspection process. You have given the sample with instructions to the inspection company, great! Also, provide the company with a copy of your purchase order.
The point of importance:
Never expose the FOB price in the purchase order. You can blank it out as the inspectors may pass it on to competitors. You may choose to ignore this fact but know this; inspecting companies work for a myriad of customers. This means that they’ll frequently run into counterparts from other companies in their line of work Knowing this, FOB prices is not something you would want inspectors to discuss among themselves. As such, do not give them that chance by showing the FOB price on your purchase order copies.
The bottom line:
Along with other instructions from you, the inspector will include vital information from your purchase order to the checklist. This like I said, you’ll have to okay.
Usually, the checklist contains photos of details the inspection company needs to familiarize themselves with. Generally, the more information you provide, the better the inspection company can do the job. Once everything is clear, you can proceed to book your inspections online. Note that booking the inspection must be done in advance. This should be at least seven working days to when you expect production to complete. It can also be seven days before the date when at least 80% of the production will have been done.
Inspectors will only accept to conduct an inspection when a majority of the production is complete. This includes packaging and labeling of the products whose production has been completed. If you book an inspection when less than 80% production is done, the inspector may refuse to do it. This will mean that the inspection will have failed and as such the supplier will have to incur an extra charge for this.
NoteTherefore that once you book an inspection, the company contacts the supplier to verify the inspection date.
This is to help both parties coordinate their workforce for the inspection.
After all this, you’ll have to wait for the inspection company
to do their work and provide you with a report afterward. You’ll use the
report to verify if the supplier has met your specifications
and requirements comprehensively.
Remember, once you know the ins and outs of this trade, it all stops being complex. Generally, importing from China isn’t as hard as you may think and so is finding the right goods.
You don’t need to know Cantonese, travel to China or meet the high MOQ that most Chinese factories demand. The moment you decide to source from China, you’ll realize that it’s entirely different from what you’ve been made to believe. In fact, it is effortless to find the right goods for your business. You just need to do your research and follow due processes to ensure that you get the best product from China. If you can hack this, then you can really profit from importing from China.
Now let’s find you a freight forwarder.
How to Find a Reliable Freight Forwarder in China
Doing this will get you so many results providing you with all the
information you need
To make profits in any importing from China business, you need the services of a freight forwarder.
This is the company or business that will help you in:
Arranging for transportation from China to your destination
Quality inspection and even sourcing for products, just to mention a few.
Basically, freight forwarders make importing from China an easy and straight forward process. Simply put, you may view a freight forwarder as a middleman.
Now, how can you find a freight forwarder in China?
Letme walk you through this:
First of all, there are very many freight forwarding companies in China.
Fortunately, most of these companies have an established online presence.
What does this mean?
● Do a Random Online Search
With internet, finding a freight forwarder in China is a simple and easy process. Simply use the right search terms such as:
“Top 10 freight forwarders in China”
“Freight forwarder from China to USA”
“Freight forwarders from China to the Philippines”
The truth is:
It is the easiest way of finding a freight forwarder in China. All you need to do here is perform a search on your favorite search engine. For instance, you can use your country and port to perform a quick search. Doing this will get you so many results providing you with all the information you need. This information may include, pricing, country of origin, validity, delivery time and the company names.
Apart from searching on the internet, you can also try to locate freight forwarders in China manually.
● Search for Freight Forwarders from Trade Directories
This is especially possible with the use of trade directories which you can get from relevant Chinese port authorities. The downside of using the manual approach is that information doesn’t always travel fast enough. Even with the latest directories, you may have to call up the companies to make inquiries about the most recent pricing among other information. But that’s not all about finding a freight forwarder in China. There is more which includes checking to ensure that your potential freight forwarder is worthy and reliable.
The thing is, to find a freight forwarder in China that is large, reliable and still able to offer high-quality services is hard. Luckily, there are ways to speed up the search. This includes posting a topic on international business websites or inquiries to listed forwarders.
You can then use the responses you receive to evaluate the Chinese freight forwarders that responded and see if they meet your standards. The responses can help you to evaluate the companies based on their reliability and creditworthiness.
Here are a few more tips that you may use to find a suitable freight forwarder in China;
In the freight forwarding and logistics industry, larger companies tend to have more contacts. Their contracts range from people like clearing agents, customs brokers, carriers, consolidators, inland transporters, etc. This means that if you encounter a problem, the company can call in a few favors to help you out. An extensive network of associates proves the capability of the company to handle your shipment. No matter how large or small. This is actually the reason why you should choose an already established company over a new and inexperienced one.
Experience is vital when looking for a reliable freight forwarder. A company with over ten years of experience is preferable over one that just got started. Ideally, a decade or more of experience indicates that a company has the sufficient expertise needed to cater to your needs.
Always go for companies with experience in your type of products. Most freight forwarders will ship anything from China. Nonetheless, not most of them have experience in particular shipping items. Therefore, you should always choose a company that has adequate experience to ship your products. It doesn’t matter whether it is plant equipment, tech equipment or whatever. Just get someone that can do it well. Someone who is well aware of the potential issues and custom rules and regulations about your type of shipment.
Finding a forwarder that can explain to you how the process will work is best. I’ve kept telling you, importing from China comes along with complexities. However, when you understand it, it becomes easier to plan your best way to import what you want from China.
Always check to see if your potential freight forwarder has good references. Which business have they represented before and how? Knowing this is very important as it helps you anticipate your experience with them.
Last but not least, find a company that provides a variety of insurance options. Most companies have a default insurance policy. This is usually the bare minimum and is often incorporated in the quotation. However, at times this may not be sufficient, and you may need better coverage. If you can find a freight forwarder that can help you with this, you can save lots of time and money.
By following these tips, you can easily find a freight forwarding company that can provide prompt and professional services.
As you embark on your search, remember that Chinese businesses are built on guanxi.
So try as much as possible to make personal contacts and establish and cultivate relationships in the China wholesale world.
How to Ship from China
In this chapter, therefore, you are going to learn about the various forms
of freight shipping from China
Up to this point, you know the rules and regulations of importing from China. You’ve found the right goods to import and a good freight forwarder to use. The next move would be to decide how you are going to ship the items and frankly, there are various ways of doing this. However, you need to know which method will guarantee you safe, fast and affordable shipping from China. In this chapter, therefore, you are going to learn about the various forms of freight shipping from China.
You will learn the pros and cons of each form of shipping and suitability of using each means. By the end of this chapter, I hope you’ll be able to know which methods best suits your supply chain needs. So read on.
5.1 Ocean Freight from China
Ocean freight is the most common mode of transport used to ship goods across global destinations. When importing from China, ocean freight may be the best option if affordability and efficiency are your key concerns.
Why am I saying this?
Well, China is located in East Asia near Pakistan, India, Thailand, Mongolia, Kazakhstan, and South Korea. The country is also on the Pacific Ocean. Its location on the Pacific Ocean makes it ideal to use ocean freight when shipping from China. In China, the Pacific Ocean is located along the southern coast. Most of the manufacturing factories in China are located in the islands along the coast or close to the coast.
Besides, China has very good infrastructure that provides easy access to the cost All these make ocean freight a great option when shipping from China Now, ocean shipping has always been an excellent choice for shipping for a number of reasons.
One is while it takes a little longer to ship from China by sea, it is less costly compared to other modes of shipping. Another reason for the popularity of ocean shipping is that it provides a lot of flexibility as far as what you can ship from China. Other modes of shipping, i.e., air freight tend to limit you on the number of goods you can send. This is often due to space constrictions and additional costs of sending heavy, large or irregularly shaped items. With ocean freight from China, however, these limitations are not much of an issue. A ship can accommodate all kinds of shipments regardless of shape, size or weight.
The cost also typically remains reasonable regardless of what you are shipping. This can allow you to ship large amounts of goods if you are sourcing from China to other parts of the world. So, when ocean shipping from China, use a company that provides quality and flexible ocean shipping services This will enable you to ship more affordable and efficiently. Such a company also gives you the option of sending either LCL or FCL depending on your current shipping needs.
Generally, you should consider ocean shipping for two main reasons;
and the flexibility regarding the volume and weight of goods you can ship via ocean freight
Besides, ocean shipping services today give you the option of tracking the progress of your shipment during transit. You just have to find an ocean shipping service provider with a well streamlined logistical infrastructure. Find a company that regularly engages in ocean freight shipping to be sure that your items will be handled carefully.
For successful ocean shipping from China, you should also ensure that your items are properly packaged and labeled. They should also be appropriately secured inside the shipping container for safe shipping. Provided you follow these instructions, your ocean freight shipment should work perfectly.
You should be able to transport goods safely from China to your destination. If using ocean freight, these are the ports that your shipment may be loaded from in China;
Hong Kong seaport
Hangzhou seaport among others
5.2 Air freight from China
Like ocean freight, air freight is also quite popular.
This is especially in cases where you are shipping time-sensitive, high value, express or small shipments. In this cases, air shipping becomes preferable as it saves time and cost on smaller items. Like ocean shipping which delivers goods from seaport to seaport, air shipping ships from airport to airport.
Luckily, China has lots of airports that are located strategically in the country’s most industrious regions. Due to this, it is easy to ship your goods from any location in China using the airport nearest to where your shipment is.
The main airports that you may use to ship goods from China include;
Beijing capital international airport
Guangzhou international airport
Chengdu shuangilu international airport
Shanghai Pudong international airport
Shenzhen Baoan international airport
Kunming Changshui international airport
Shanghai Hongqiao international airport
Xi’an Xianyang International Airport
Chongqing Jiangbei International Airport
Hangzhou Xiaoshan International Airport
Xiamen Gaoqi International Airport
Zhengzhou Xinzheng International Airport
Qingdao Liuting International Airport
Once the goods reach your destination airport, you’ll have to take care of the customs processes to ensure that your products are allowed entry. As you can see, you can air ship goods from China to any part of the world. This is thanks to China’s numerous airports and airlines that serve most routes across the globe. Air freight is a big industry and, as I’ve told you, you can use it to send practically anything to any part of the world.
Whether these are jewelry, machinery or valuable documents – air freight can be used. In most cases, air cargo is handled by commercial airlines. For bulkier cargo, however, specialized airliners are used. Cargo liners note is also referred to as cargo jets. These are mostly Boeing 747 jets that are purposely designed for carrying freight around the globe.
About airlines- there are so many airlines operating freight services from China to other parts of the world.
These include major global carriers like:
Air China cargo.
At this point, you may ask, why should I choose air freight over ocean freight?
Well, air freight is undoubtedly speedier than all modes of transport as it shortens the delivery period for goods. As such, it offers faster shipping of goods from origin to destination. Ocean freight is slower but cheaper. Comparatively, air freight is the fastest way for time-constrained deliveries around the globe.
Ocean freight will have you waiting for the delivery of goods for one month (depending on the destination). Air freight on the other hand only takes five days sometimes three to deliver from China to other parts of the world. Take note however that while air freight delivers faster, it is expensive. As such, you may want to consider a few elements to see if it would be better to use alternative means that are cheaper. One such factor is the cargo destination. Typically, commercial airlines provide direct/nonstop shipping service options. Nonetheless, there are some that do not offer this service option.
Direct service will depart from China and arrive at your destination without having to stop over another country during transit. An indirect service, on the other hand, involves the airliner stopping at one or more countries before reaching its final destination. If you choose indirect air freight services, your cargo may arrive later than it would if you use a direct air freight service. Another thing with air freight is that you can ship items using the next available flight to the intended destination.
This service runs across all major carriers. Typically, the next available flight option is nonstop and very costly. Whenever possible, you should use the standard air freight modes or other cheaper means of shipping instead. Unless of course if your package has to be in its destination overnight. Doing this can give you savings against using the next available flight option.
The kind of freight service you opt to work with will determine how often you fly from China to the destination. This also note can affect the arrival time of your cargo is it’s an urgent shipment. Now, if you want to book air freight shipping service, I recommend you do this for an airport that is nearest to your supplier in China. Make the booking early enough to avoid the hassle that accompanies the last minute rush.
5.3 Rail Freight from China
If you don’t want to use ocean shipping due to its longer delivery times or air freight as it’s costly, you can opt for rail freight. Rail freight from China is cheaper and quite efficient. If you intend to ship a larger volume of goods that are also bulky from China, you can use rail freight.
Note, however, that rail freight from China is only viable for those importing from China to destinations across Asia, Russia, and Europe. If you are importing to Africa, America or even Australia, then rail freight from China may not apply in your case. I must say that rail freight is the perfect alternative for shipping goods from China to Europe and other parts of Asia. You may wonder how it is possible to ship from China to Europe via rail.
Well, let me enlighten you.
There is a railway network that connects cities in China to others in Asia, Russia, and Europe. This network is commonly known as the Eurasia network derived from Europe, Russia, and Asia. It is also known as the ‘new silk road.’
I must tell you that since its establishment, this massive railway network has improved trade activities in areas it covers. But mostly, it has improved trade between China and European nations.
Through which routes can you ship goods from China via rail? Good question.
Now here is the thing; the Eurasia railway network consists of three main operational corridors. There is the northern, southern and central corridors.
What are these and how do they connect?
Well, the northern corridor comprises of routes to Europe through Russia. It kind of follows a similar route to that of the Trans-Siberian railway that connects Moscow to Russian Fareast regions. The trans-Siberian railway network also connects cities in China, Mongolia, and South Korea.
But that is a topic for another day. So there is the northern corridor, and then the central corridor. The central corridor of the Eurasian railway network goes through Kazakhstan from China. It links with the northern corridor on the western part of Russia. And lastly but not least, there is the southern corridor. This one is ideally the longest route among the three. It runs across Kazakhstan, Iran, Azerbaijan, Georgia, and turkey linking with the European railway network. If using the southern route, you may choose to ship from China through Kazakhstan to Aktau.
Once in Aktau, you can move the goods across the Caspian Sea using ferry before reconnecting. Doing this can help to speed up on delivery time. Note that the Eurasian rail network starts from Yiwu in China.
I’ve told you that rail freight is faster than ocean freight, yes. But then, how long does it take to ship from China by rail? Well, it takes anything between ten to eighteen days to move goods from China to Europe. The estimated delivery time note will depend on the final destination of goods and the route you use. The good thing is that it is fast that sea shipping and cheaper than rail. It makes for the perfect alternative.
5.4 China Courier Services
I told you that there are multiple ways of shipping goods from China. Among these, we’ve mentioned air freight, ocean freight and rail as these are the main ones. Now, there is also the courier shipping services which you will at some point need to use during your import from China rendezvous.
This is the thing;
Every business at least lands a situation where they need to send an urgent package at some point. During these times, courier services often come in handy. With these, you can be sure that your urgent parcels will reach their destination on time and without any hiccups. So when it is viable to use courier services when importing from China? Of course apart from when you need goods delivered in time.
Well, if you want to ship fragile or delicate items that need to be handled with care, courier shipping could be it. These items could be important shipping documents, product samples, etc. China courier services, in this case, can help you meet your requirements without any hassle. They will ideally guide you on the best way to package the items and ensure that they reach their destination in one piece.
Courier services, note, are pretty fast in delivery. Their delivery schedules are way better than the standard air freight ones. With courier services, you can have goods delivered from China to any part of the world within three days.
Express courier service does deliveries overnight.
The best part;
You don’t have to worry about customs clearance. This is because courier companies tend to handle this bit to ensure that deliveries are conducted as scheduled without any delays. The courier companies have professional customs brokers/agents that do clearances for them quickly and easily. About China courier services, this is where most people get it wrong; that it is expensive to courier ship. Well, courier mostly gets costly when you are moving an unusually large volume of goods.
But if you have small packages, courier shipping is very cost efficient. It provides very competitive freight charges for people shipping small packages. It is cheaper to ship via a courier service than to ship LCL. So where can you find these courier services in China?
Simple: Courier companies are abundant in China. You shouldn’t even waste your resources on finding them physically. Just log on online and search ‘China courier services’. You will get plenty of results with information that’ll help you find the perfect company for your courier shipping needs. Known companies like FedEx, UPS, DHL, and TNT are the major companies operating courier shipping services from China.
These companies have established offices in every major region in the world. As such, finding them shouldn’t be that hard. Once you get on their website, you can access a plethora of information. This will include the cost of shipping, schedules, minimum cargo weight and among other things.
Don’t get me wrong;
The four above are the major courier service companies in the world. However, other companies offer the same service in China. China post, EMS and Hong Kong post are some of the companies that offer courier shipping services from China. The distinction between these and the likes of FedEx is that their transit times are not so dependable.
Therefore, you will have to think hard before you settle on a courier company to ship your goods from China.
Once you find one that is suitable, you can be confident that your packages will be handled professionally. When considering courier shipping services from China, the best thing is to ensure that you find a quality company.
Find a company that can meet your shipping needs comprehensively. Panda can help you book dependable courier shipping services from China to any destination of your choice.
We (Panda) work with top courier companies in the world. This means that we can find you the perfect courier shipping service for whatever kind of goods you want to ship. This is no matter how far the goods need to travel.
5.5 Popular Incoterms when importing from China
As you can see, importing from China is a systematic process. It involves a lot of things that you must understand to import successfully. That said, this is the one part about shipping from China that you should pay keen attention to.
This is because a small mistake or misunderstanding on the Incoterms can cost you a fortune. So let’s get to it right away. Incoterms for starters are three letter words that define when responsibility for goods passes on from the seller to the buyer. As I’ve just said, importing from China is systemic.
There are a lot of stages and processes involved for goods to successfully move from an origin China to the destination. Due to this, it is crucial for importers to know where responsibility lies and at what stage of the importation process. Incoterms are all about cost and responsibility. Once you understand them, it becomes very difficult to encounter hiccups or even pay for things that you shouldn’t.
Now, what was the question again?
Aaaah! Popular incoterms when shipping from China right?
Well, there are many, but mainly you’ll come across the following incoterms in your import from China ventures.
● EXW (Ex works)
An EXW is usually followed by the name of the place where the shipment is made available to the buyer. In this case, the supplier responsibility is just to avail the goods at their factory/warehouse. If you use to buy goods on EXW terms, it means that you will take control of goods at the supplier door. Any responsibility thereon falls unto you.
Let me give you a real-life example;
Say you’ve bought USD 10000 worth of laptop chargers from me. You then decide to arrange for your transport. On my end, I will quote you my laptop chargers ex-works. This will mean that the price you get from me only includes the price you pay for the final products that I produce. Following expenses after this are actually yours to bear. So, if you buy EXW, you need to consider other costs involving transportation mostly, before taking that figure as your net cost. This means that my only responsibility will be to avail the laptop chargers at my warehouse.
Once I do this, you’ll simply organize your own transportation and have the goods delivered from my base.
Quite simple right?
Let’s move on to the next term.
FOB which stands for ‘Free on Board or ‘Freight on Board is the most commonly used incoterm when shipping from China. If you import FOB from China, it means that the supplier is responsible for loading and transporting the goods to origin port. On your part as the buyer, you bear the cost of insurance and that of transporting goods from origin port to final destination.
This means that all risks that you may incur during loading at origin port are on you. FOB take note particularly essential if you intend to import a large number of goods from China. In this regard, understanding it will help you know your role in ensuring the safe delivery of goods from China. It will also help you to know at what stage in the shipping cycle you assume possession of goods.
CIF stands for ‘cost insurance freight’.
A CIF quotation indicates that the supplier is responsible for every shipping expense including delivery and insurance. In CIF shipping, the seller is responsible for delivering the goods to your destination port. It is only after delivery at the destination port that the seller can record a sale and you, an increase in inventory. Take note that CIF is particularly crucial since the supplier pays for the insurance premium. In this case, CIF shipping guarantees you compensation against the loss or damage of goods at any point during shipping
Delivered duty paid (DDP) is a term that defines who’s responsible for delivering the products at the buyer’s doorstep. This term on a quotation and purchase order is often followed by a named destination place, i.e., DDP Cebu. DDP is more like the opposite of EXW. In EXW, the seller’s responsibility ends at availing goods at their warehouse. DDP, on the other hand, gives the seller full responsibility for goods from their warehouse in China to buyers destination.
This means that the supplier bears all costs of transporting the goods from origin to final destination. The seller in DDP shipping bears all transport costs, customs clearances, duty as well as insurance.
DAT stands for ‘Delivered at Terminal’.
DAT shipping requires the seller to delivers goods from origin port to a named terminal at the destination port. Let’s say your choice terminal is terminal 2 at anchorage international airport in the US. When shipping on DAT terms, the seller will ship the goods from China to the US (Anchorage) The seller will foresee the unloading of the products and have them moved to terminal 2 as specified in the C/O. From thereon, the buyer will take care of all import clearance procedures and transportation from the terminal to the final destination.
CFR is an abbreviation for ‘cost and freight.’
It demands that the seller pays for transportation of goods up to the specified destination port. All risks, however, pass on the buyer once goods are loaded aboard the shipping vessel. The buyer is also responsible for all custom export procedures at the country of origin in this case China. That’s not all.
CFR shipping requires that the buyer pays for insurance premium against loss and damage of goods during shipping. So basically, the seller’s role in CFR shipping is to only cater for transportation from origin port to destination. Everything else falls off the buyer. If you want the seller to cater for insurance costs, then consider CIF shipping.
FCA for ‘Free Carrier’ is where the supplier arranges the shipment and delivers it to the chosen carrier at the selected location. So let’s say you are shipping on FCA terms from Shanghai to Manila. And, you’re using COSCO shipping services. Here, your supplier will produce the goods, package and label them. They will then deliver the goods to the COSCOs shipping yard at Shanghai seaport. From there, the carrier will deliver the goods to Manila from where you’ll take over and proceed with other import processes.
DAP stands for ‘delivered at place’.
It refers to a situation where the seller takes care of all charges including delivery of goods to the buyer’s address. Customs clearance, in this case, mustn’t be paid by either party as this can be done based on an agreement. So if during booking you agree that the seller will take of care of customs clearance procedure then good. Note however that in DAP, the seller isn’t responsible for paying the import duties and taxes. You, the buyer, will take care of this bit at the destination.
So which incoterms is right for you?
Well, all of the above terms have their own pros and cons. They also all apply to different situations and needs. With this in mind, you should only choose an incoterm that best suits your current needs and situation. Nonetheless, you should always choose a term that won’t strain your pocket nor your business.
I hope you’ve gotten this bit clearly.
Now let’s find you a freight forwarder.
which is equally important in the import from China discussion.
Modes of Shipping from China
Most importers give little importance to how goods are shipped from
origin to destination
Most importers give little importance to how goods are shipped from origin to destination. They don’t know that using an improper mode of shipping can subject goods to damage or even loss during transit. As such, it is always important to move freight using the right mode of shipping. This will help ensure that goods arrive at their destination safe and in one piece. For shipping from China, you can use any of the following shipping modes based on your type of goods, budget, and specific needs.
6.1 LCL Shipping from China
LCL stands for ‘less than container load.’ It is a mode of shipping that allows you to ship whatever amount of goods you have. In this case, you won’t have to be able to fill up a standard container to be able to ship. You can ship half or even a quarter a container from China to your destination. You should note by the way that the term LCL is used to refer to when a shipment is not enough to fill a full container. In this situation, you’ll have to find expert consolidation services which will help you ship your goods to destination.
Please note: Consolidators are people/companies that help arrange for several LCL shipments to be shipped together.
When shipping LCL, therefore, the consolidator will arrange for your cargo to ship alongside those of other shippers in one container. Once the goods arrive at the destination port, they are separated and delivered to individual final destinations. In general, LCL shipping kind of provides an economical way to ship items that can’t fill a standard shipping container. It is a prevalent mode of shipping in China, especially for ocean freight.
6.2 FCL Shipping from China
As I’ve said to you, LCL is an option that you can use to ship goods that can’t fill up a container. If however, your goods are enough to fill up a standard shipping container, you can book FCL shipping. Shipping Full Container Load (FCL) means that all the goods in one container belong to you or rather a single shipper.
However, I want you to note that a container doesn’t have to be full to qualify for FCL shipping. As long as you can book all the space in a shipping container, you can ship FCL whether your goods fill it or not.
In simple terms:
FCL shipping just means that you have the exclusive rights to a container during the shipping period. And unlike LCL, this mode of shipping offers the advantage of faster and more secure shipping.
In LCL the consolidation of goods from different shippers tends to lengthen delivery.
6.3 Out of Gauge Shipping from China
Out of gauge or OOG is a type of shipping that is used to ship OOG cargo. This (OOG) is cargo that exceeds the dimension of a shipping container in length, width or height. It could be heavy plant machinery, agricultural equipment, military equipment, helicopters, etc. When shipping such types of cargo, you need a form of shipping that can accommodate its size, shape and general shipping needs.
A majority of shipping companies in China provide the safe transportation of OOG cargo. Whether it is by sea, air or rail. These companies use specialized types of containers, trailers, and aircraft to ensure the safe delivery of OOG cargo from China.
So do you have an oversized or irregularly shaped cargo that you want to ship from China by air, sea or rail?
Contact Panda; we can help you find the right carrier to do it fast, efficiently and affordably.
6.4 Roll On/Roll Off Shipping from China
Roll on/roll off shipping or Roro as it commonly known is the most popular service for shipping wheeled cargo. Wheeled cargo, in this case, is motor vehicles mostly trucks, cars, and buses. Roro shipping is usually the cheaper and safer mode of shipping vehicles from China to other parts of the world.
Its advantage is that it is pretty straightforward. In this case, loading and offloading the cargo involves driving in onto or off the shipping vessel by professional stevedores. During loading, the vehicle is driven onto the vessel and firmly secured underdeck to prevent it from moving during transportation.
Note that any movement during transit can lead to damaging of the vehicle and others around it. So what kind of vessels transport Roro cargo? Well, Roro cargo can either be shipped using a pure car carrier (PCC) or a pure truck and car carrier (PCTC) vessel.
These are vessels that are big, strong and spacious enough to accommodate Roro cargo. The vessels have an inbuilt ramp that makes it easy to load and offload cargo.
Please note; When Roro shipping, freight costs will be charged based on the carriers width. This will be regarding lanes, length in meters and number of decks.
6.5 Reefer Shipping from China
Are you shipping perishable items? Or any items that require temperature control or special ventilation? You should book reefer shipping. The word reefer note is an adaptation of the word refrigerator. This is why it is also sometimes referred to as refrigerated shipping. In this type of shipping, cargo ships that are specially designed to transport temperature sensitive cargo are used.
These type of ships are known as reefer ships. Reefer ships, note, are not like the usual ships. These tend to have more insulation than regular shipping vessels. You may wonder how the reefers can preserve goods from origin to destination. Well, for starters these reefer ships transport goods in refrigerated containers.
These containers are completely enclosed to ensure that cargo is securely packed and maintained at a set temperature. The refrigerated containers are often transported on the main deck of the transporting ship or in the cargo hold area.
Note that before packing cargo into a reefer container, the container is typically chilled. After this, goods are packed evenly to allow for stable cooling and proper air circulation.
What goods require reefer shipping from China?
Well, there are a lot of these but mostly perishable items like fruits, vegetables, dairy products, meats, and seafood.
6.6 The Door to Door Shipping from China
Shipping from China to overseas destinations can be a struggle especially if you are operating on a busy schedule. Fortunately, services like door to door shipping provide a solution for this. Here, professional shippers pick up your items from the supplier’s door and deliver them right at your doorstep. With this, your only job is to find the right products to import and a suitable shipping agent.
What follows after this leave it in the hands of your agents?
The door to door shipping I must say is an excellent service for those who aren’t able to handle the import process on their own. Whether it is time that you don’t have or resources, this service can help you greatly. No matter if you want to ship by air, sea or rail, door to door shipping services can still be provided.
As I’ve told you, this service works by having a professional shipper pick your goods from the supplier’s warehouse. After this, the shipper will ensure the proper packaging and labeling of the goods, as well as oversee their loading. From here, they will facilitate their shipping from origin port in China to your final destination as requested.
Since shipping goods from China can cause added stress levels, having a door to door shipping is very beneficial. Most companies including Panda offer real-time to track on your goods. With Panda’s door to door delivery service, expert agents will pack, prepare and load your goods into the proper container. If you are shipping OOG goods, our team will ensure that this to be shipped correctly. After this, our customs agents will help clear the goods through customs, unpack them and drop them safely at your given address.
So instead of managing your own shipment while simultaneously dealing with other business matters, let Panda help you. The time that you save from this, you can use it to do other important things. Remember that we are professionals at this. We have many years of door to door shipping experience, and for all this time we’ve handled shipping of thousands of items. With Panda door to door delivery service, you don’t have to worry about anything. We can move all kinds of items whether light or heavy, small or bulky – we can handle it all.
When it comes to shipping from China, door to door shipping is a viable option. For those of you who tend to worry about goods getting lost along the way, remember, they can be tracked. Insurance can also be purchased and remember you don’t even need to worry about going through customs.
6.7 Drop Shipping from China
Dropshipping is becoming increasingly popular in China. This type of shipping means that you can sell products even without having any stock of the products. With the advent of technology, it is easy for anyone to start an e-commerce platform to sell a variety of products online, today. This, you can easily do without worrying about the initial cost for stock.
You just need to buy the products that you need from a Chinese wholesaler after you receive an order for it. The Chinese wholesaler will then arrange for the product and deliver it straight to the customers address on your behalf. Chinese companies that offer this service will often ship the products in boxes with your business name and contacts on them.
The essence of this is to prevent customers from knowing that the item is from a Chinese wholesaler instead of you. While drop shipping is known to be quite profitable and hassle-free, it has one major downside.
The downside of this is that it is difficult for an amateur in the business to find a trustworthy Chinese products supplier. As I told you before in chapter 4 of this article, there are many scam Chinese companies who claim to be real service providers. In a real sense, however, most of these are total fraudsters who take your money and go missing. Some are intermediaries offering products at exaggerated prices than the actual wholesaler.
How do you discover these?
Ask the company claiming to be a Chinese wholesale supplier for the contact information of the manufacturer who produces the products. If they resist to, it is highly likely that they are intermediaries offering goods at a higher price to you. Well, this is just a drop in the ocean, there are more trustworthy suppliers in China than there are fakes.
The best part:
Most of the trustworthy suppliers are increasingly covering a broader category of products. This means that nearly everyone can find a product to sell from Chinese product suppliers. It doesn’t matter which products you want to sell or to which market, you will always find the perfect product in China. Just do your due diligence and partner with a reliable China drop shipping company that offers a vast range of products. This way, you can sell without having to worry about stock and delivery of the product from yourself.
The bottom line:
No matter what mode of shipping you are using, there are shipping companies who want your business. These are businesses that will offer you quality shipping services at very competitive rates.
In this case
Panda is a good example.
So now that you know the different types of shipping there are, it’s time to find out how much it costs to import from China.
Let find out about this in the next chapter.
Cost of Importing from China
Importing from any part of the world including from China can be expensive for business
and more for an individual
It often requires upfront cash to buy goods, costs to ship and transport the goods. It also requires storage and delivery to the final destination once goods arrive at the destination port. This chapter, therefore, aims at providing some insights on some of the costs of importing from China.
7.1 The Main Importing Costs from China
As you can already tell or may already know, importing from China involves a myriad of costs. These costs arise from the supplier’s warehouse in China to the delivery of goods at their final destination.
These costs include are but not limited to;
● Cost of the Products from a Chinese Supplier
It also includes the cost of:
Transporting, the goods to the port of departure.
Local transportation (from supplier’s base to loading port) is not that expensive. A 20 GP FCL container costs at most USD 500 to move, depending on the distance of supplier to loading port. In most cases where you purchase goods on FOB terms, the supplier in China will take care of this cost.
So you won’t have to worry about it since this cost is included in the FOB price. Plus, most manufacturers/suppliers in China are based close to the ports. This means that transporting cargo from their base to the port of loading isn’t much of a hassle.
● Cost of Shipping
Often referred to as “freight cost”, this is the cost you incur to move goods from loading port to destination port. Frankly, this is the most complex part of it all as it’s more inclined towards the local charges, paid at the destination port. The cost for shipping, largely depends on the distance from the origin to destination as well as the mode of transportation used. In this case, importing from China to the USA by sea will cost less than importing from China to the Philippines. Similarly, shipping by air to the same destinations will also cost more than it would if you ship by sea.
● Tax and Duty for Goods Imported from China
In every country, most imports are subject to tax and duties. Take for example, other countries like the USA, goods from China are subject to anti-dumping measures. In this case, importers may be required to pay high additional duties for products to be allowed entry into the country.
The tax and duty rates vary accordingly. Some countries impose high taxes for imports while some remain reasonable. Some have tax exemptions for specific imports. In this case, it is essential to familiarize yourself with the tax and duties regulations in your country before importing.
● Storage and Distribution Costs at Destination
If you don’t have a warehouse of your own, you may need to use a hired one to store your goods from China. This is only if you are not distributing the goods immediately. In this case, you will have to pay for storage costs as none of it is free.
Distribution charges may also arise in case you are using hired trucks/distributors. Generally, there is a whole lot that goes into the final cost of importing from China. And, as I’ve told you, the cost of importing from China is not limited to these aspects alone.
You may incur other costs too like;
Possible cost for import licenses
Customs bond costs especially for US importers
7.2 Factors Affecting the Cost of Importing from China
The cost of importing from China is subject to some factors. Moreover, importing requirements tend to be specific to an importer. From the kind of products, type and mode of shipping, destination, etc. all these vary with individual importers. Because of this, therefore, the cost of importing from China differs significantly from one customer to the next.
Note however that certain major factors influence the overall cost of importing goods from China.
Below given are a few such factors;
● Means of Transportation
The means of transport you choose for your imports from China contributes largely in deciding the overall cost of importation In this respect, note that transporting imports can not only be done by moving them across the ocean, air, or rail. Inland transportation, which involves moving goods from port to final destination also makes part of the importing cost.
Most reputed shipping companies offer mainly two types of transport methods. These are shipping from door to door or from port to port.
Here, you have the option of choosing whichever service best suits your shipping needs and budget.
● Mode of Shipping
The shipment mode is another factor that affects the cost of importing from China. As I told you before, there are many modes of shipping from China. You can ship FCL if you have enough goods to fill up a container or LCL if not. You can choose reefer shipping for temperature sensitive cargo or OOG shipping for oversized and irregularly shaped items. If you are shipping wheeled cargo, Roro is the best mode of shipping to use.
If you are into the dropship business, drop shipping would be best. All these shipping modes are provided as services by most companies in China. So naturally, some shipments cost more than others. For instance, shipping FCL will cost you more than it would if you ship LCL. Likewise, the kind of goods as in the case of reefer shipping and OOG shipping will also cost you more. Besides, you may have to pay additional costs for insurance when shipping such fragile and expensive items.
● Distance from Origin to Destination
The shipping distance from China will also largely influence your cost of importing from China. The overall travel distance and the difficulties can affect the cost of importation.
In this regard, therefore, it is advisable that you thoroughly research the destination you intend to import to. This will help you understand what costs you may incur and in what range.
● Customs and Taxes
Customs and taxes account in the overall cost of importation. Every country, note, has its own customs regulations. So, in essence, the cost of this will depend on the destination to which you are importing to from China. Remember, that taxes and duties are charges that must be paid before goods can be allowed entry into the importation country. To ease the stress that comes with this, it is best to book a customs brokerage service. Although this will add to your overall importing expense, it is worth it as it will free you from a lot of stress and problems with customs. To get some savings, it is wise that you choose a shipping company with experience in shipping to your destination.
● Other Factors
In addition to the factors mentioned above, the following elements also influence the total cost of importing from China.
The time of shipping
the demand and supply at the time of shipping
congestion charges at the destination port
currency adjustment factors
fluctuation in fuel prices
It is, therefore, necessary that you know what options you have when importing from China to help in mitigating these costs.
7.3 How to Calculate the Cost of Shipping from China
I’ve said this several times, and I’ll keep saying it:
Product imports from China are profitable for business. As first time importer, most of you put the most focus on how much you will spend on acquiring goods from China. The truth is, the cost of buying goods from China is very trifling. It accounts for a part of the overall cost of importation. This is to mean that other costs, i.e., transportation, handling, clearance, and storage make up the most of the cost importation. You’ll focus so much put on the product price and get surprised when you have to pay up to 30% of the shipment price in taxes and duties. Something you hadn’t plan for. It is imperative to know the estimated cost of importing from China before you begin the import process.
To do this, you will first find a supplier for goods and get a quotation. After this, you will proceed to calculate an estimated landed cost of the product. If it’s higher than you had anticipated, you can try to look for ways to mitigate the cost elements. If the products landed cost in line with your budget, you can go ahead and begin the process of importing it.
Landed cost is the total cost of a product once it has arrived at your final destination. It factors in the unit price of the product, inspection costs, brokerage and logistics fees, and cost of shipping.
This also covers customs duties and taxes, insurance, and handling fees in the destination country. In this case; It will be unwise to import a product and then find out that you’ve spent more to import it than you can actually sell it for. So how can you calculate the cost of importing goods from China?
● First, Consider the Cost of the Goods
The supplier quotes this amount for acquiring goods, and it is based on the unit price of products and the quantity.
● Secondly, Consider the Freight Charges
Freight costs will depend on the volume of goods you are shipping and the shipping distance (from origin to destination port) It will also vary depending on the time of shipping (peak or low season), shipping company you use, etc.
For this, you may allow at least USD 100 to USD 5000.
● Thirdly, Consider the Duty Charges
There will be a variable percentage of the dutiable value put on your goods. Next, consider the taxes which is often VAT (value added tax). Like in duties, the payable tax for imports will be a variable percentage of the total of the following costs;
the dutiable value of goods
Other costs that you may include in the calculation maybe custom clearance fees, document fees, surcharges, etc. For this, you may allow an additional 5%.
The landed cost should be the resulting amount after adding the;
shipment value amount as quoted by the seller
freight amount as quoted by a logistics company like Panda
customs amount as quoted by customs in the destination country
This will be;
Landed cost = shipment value + freight value+ customs value
I hope that is clear.
Now let’s move on to another complex yet vital part.
7.4 How to Calculate the Duties and Charges When Importing from China
A common mistake that most importers do is to rely on their suppliers and shipping agents for information on duties and charges. Listen, duties and charges on import are only paid at the destination country. Therefore the only way to find out how much it may be is through the customs authority in your importing destination. Certainly, you are solely responsible for paying any duty owed on an import. This means that you are wholly responsible for finding out how much it may be when calculating the tariff amount.
Now, on to the calculation.
The first step here is to identify the harmonized tariff code of your products.
What is HS Code? Why is it Important when Importing from China?
This, harmonized traffic code (HS) is a code that classifies goods for purposes of applying tariff. It is a 6-10 digit code that associates an imported product category with a specific import tariff.
This code is used to help ease the customs process of locating an imported item among catalogs.
Note that HS codes vary with different countries.
What your supplier provides is often just a basis.
The best way to find the accurate HS is by using the first four or six digits provided on your commercial invoice.
Calculation of tariff, therefore, is done based on the HS code of your imported product and the declared customs value. All this information is usually indicated on the commercial invoice for easy reference. So note that knowing the right HS code for your type of product is essential to your import from China process. Without this code or misusing it can result into clearance delays. It can also make you incur additional unexpected costs.
Enough of that!
So once you have the HS code, customs will use the declared value of your imports to calculate the duties and taxes payable.
This is how it is done:
Import duty = declared customs value of goods x the customs duty rate (%)
The declared value note is often based on FOB terms as this is what is commonly used in China.
If importing on CIF terms, then the CIF value will be used. Now, I want you to note that there are some instances where you may not have to pay any tariffs on your imports from China. This will be if you are importing non-dutiable goods or if the declared value of your imports is below the dutiable amount.
As you can see, the declared value of imports is critical in the determination of the import tariff owed. In this regard, it is of the essence to ensure that the correct value is stated on the commercial invoice before shipping goods
7.5 Factors Affecting International Freight in China
Let quickly go through some of these factors:
● Demand and Supply
The demand for made in China goods is increasing at a rapid rate worldwide. This means that manufacturers have to up their production efficiencies to keep up with this demand. And, it is important to note that as the demand for goods from China is increasing, so is their cost and freight rate.
● Fluctuating Oil Prices
Fluctuating fuel prices is another crucial factor affecting international freight in China. An increase in the fuel prices tends to affect international freight in China. This is because increased fuel prices drive up the operating costs of shipping companies. In this regard, they hike their shipping costs and also reduce the number of freight trips from China.
● Availability of Raw Materials
Availability of raw materials is also a factor that affects international freight in China. When raw materials are abundant, manufacturers in China produce more items. This generally increases the availability and variety of products to import from China. However, when there is a scarcity of raw materials and other production resources, the same will reflect in the market availability of goods. In this case, you will find that suppliers will take long to avail of the goods that you want to import. And even they do this on time; it will be a price higher than the normal.
● State of Global Economy
Global economic changes are also a factor that influences international freight in China. An economic downtime whether global or in China will lead to a reduction in international freight activities. When the economy is slow, both demand and supply get affected reducing the level of trade across national borders. In this case, very little freight will be moved from China to other parts of the world.
● Politics (Political Stability/Instability)
Politics tends to affect the flow and cost of international freight in China. Trade agreements and policies are some of the political elements that influence international freight in China. A good example is the ongoing trade war between China and the USA. Until 2016, it was very cheap and easy to import goods from China to the USA. Today, the US has imposed additional tariffs for imports from China.
This is all in a bid to ensure that there is a trade balance between the two nations.
And while I cannot comment on this matter, I must say that it is negatively affecting international freight in China.
Risks when Importing from China
Learn How to Avoid Them
These days’ Chinese products are everywhere. If you walk into an office today, you’ll find the reception desk is from China. Walk into a bank, the money counting machines they use, most of them are from China. I mean, made in China products are practically everywhere. Now for the business minded, importing from China brings both excitement and fear. You can make huge profits from selling goods you import from China.
In the same way, you may incur massive losses or generally run into problems when importing from China.
What I am trying to say is this:
Importing from China is a great way to identify new business opportunities and increase your profit margins. And while the initial stages of importation can be complex, the payoff is simply amazing. Both immediate and long-term.
Importing from China like any venture sure comes with its share of potential risks.
Loss and damage to goods while in transit
Getting poor quality goods
You may import a product that causes harm to the consumer and the environment
Products getting held by customs due to restrictions/prohibitions
The risk of competition
Falling victims scams and fraud when sourcing for goods
There are many other risks that you may encounter when importing from China. However, these are the most common that you learn to mitigate. The best way to do this is by taking the following actions anytime you import from China.
● Deal with Credible Shipping Companies
Before you start the process of importing from China, it is crucial to ascertain that you are dealing with a trustworthy shipping company. Take this with great seriousness. I know I told you that the easiest way of getting reliable suppliers and freight forwarders is online.
Well, that’s true.
However, I also want you to know that most online transactions are riskier when importing from China. You see, when you search the web for a potential supplier or even freight forwarder, you will be presented with a long list of results. Among these, there are often companies that you know nothing about and have no way of verifying their credibility. It is very easy for an unsuspecting importer to fall into the hands of these companies who may end up to be fraudsters.
As such, I recommend that you do your due diligence to ensure you find a credible shipping agent to work with. You should do this before importing from China. Do not hesitate to verify and re-verify the reliability and authenticity of a potential shipping company. Ask for references from the company and check them thoroughly. The chances are that if other importers have done business with your shipping agent and had good, luck, you’ll also do.
Just be careful as in this business you trust no one.
● Know the Incoterms used when Shipping from China
To avoid overpaying for goods and other related problems when importing from China, it is essential to know your incoterm and be specific about it.
Imagine this scenario;
You order 1000 leather handbags from a supplier in China that you’ve done business with before. You probably had an awesome experience, and you expect that this second round will be as perfect as the first.
Your expectations don’t last long though. And, this is because when you receive the handbags, you realize that they are not made of leather. Instead, they made using cheap vinyl material. After realizing this, you immediately contact the supplier demanding for an explanation. Your instructions as per the purchase orders were that the bags be made using leather.
Why is it that the final product is made of vinyl?
How do they respond?
A typical response, in this case, would be as follows;
“If you wanted your items to be made with real leather, you would have said ‘genuine leather’”
“In China, you have to company leather with ‘genuine’ otherwise you get an imitation.”
What do you even do this case?
Honestly, there isn’t much you can do other than try to find a market for it and sell at a lower cost than what you had planned. Don’t let this happen to you. Know what you want and state it clearly to the suppliers to avoid such a scenario from happening to you.
● Quality Control is Important
If importing from China, you can only be 100% assured of quality if you operate your own manufacturing plant there. This is the only way you can have control over quality. If however, you depend on suppliers from China to control quality, you may be wholly disappointed. You could end up with goods whose color don’t match your specifications. Or shape/design that is entirely different from what you ordered.
Here is the thing;
Quality control as I’ve told you before is a significant step in the importation process.
It helps ensure that you get the quality of goods that match your requirements and specifications.
Ensure that you conduct quality control of products right from when production begins until the last minute. This will help you avoid the risk of getting poor quality goods. If you can’t afford to do this bit by yourself, let a representative from your company do it.
You can also hire a third party inspector to do it.
● Always give Clear Shipping Instructions to your Shipping Agent and Carrier
As I said, importing from China could lose you a fortune due to lost or damaged goods. Sea freight from China To avoid this, it is essential that you give exact shipping instructions from packaging, palletizing, loading, etc. If your instructions are not specific, you run the risk of receiving damaged goods or even goods getting lost during transit.
● Use Less Risky Means to Pay for Goods and Services
You may not want to hear this, but I’ll tell you anyway.
The fact that there are so many payment options available when importing from China makes it the riskier. This is actually one way that fraudsters are using to scam unsuspecting importers. To avoid this, you may want to use safer means of payments, i.e., letter of credit. The problem with options like a letter of credit is that they are hard to get when you are just starting out. Besides, these options may only be available for larger payments which may not apply in your case. In this case, you are left with a wire transfer, PayPal, visa western union among other options that are not that safe.
You can, however, reduce the risk of getting conned by paying in bits. For instance, if paying via wire transfer, you can pay in three bits. You can pay 50% upfront, 25% when you get the samples and finish off once you receive the goods.
Irrespective of the payment method you chose you to use, always keep a clear record of communication and transactions. Additionally, if you are uncomfortable with the payment option you are given, suggest an alternative.
Don’t just agree to terms that you don’t like only to regret later. Frankly, the biggest challenge faced by small-time importers is finding the right goods in China. While sourcing online could be profitable, it is accompanied by lots of risks As such, it is essential that you minimize risk by understanding all the aspects of the import arrangement beforehand. Don’t also hesitate to hire the services of a professional freight forwarding partner.
Doing this can significantly help you avoid most of the risk associated with importing from China. At this point, I know that you have a lot of questions ringing in your mind about importing from China.
Well don’t worry
FAQS on importing from China is what I am going to handle next.
So continue reading.
FAQs on Importing from China
In this final chapter, I will try to answer some of the most commonly asked questions
about importing from China
I will try to make this bit as comprehensive as possible just as I’ve done with the guide. This is so that you can have a better understanding of what importing from China entails.
● What is the best incoterm when importing from China?
Frankly, I can’t say that there is a best incoterm. I can, however, advise you to source products on FOB terms and then choose DAP shipping from your forwarder.
Well, this is the best way that you can save on cost. You see, in this scenario, the supplier will take care of the transport cost from their warehouse to the origin. This means that they will also take care of customs clearances at the origin port in China. Once goods are cleared for shipping, your freight forwarder will then oversee shipping of the products from China to the final destination.
● Should I avoid any incoterm when importing from China?
Well not exactly.
However, if you would love to know the possible cost of importing from China to the destination, then CIF isn’t the best term to use.
Well CIF only includes the cost of shipping from China to the port of destination. It does not include the local charges, i.e., customs duties, brokerage fees, cost delivering goods to final destination, etc. So it becomes hard to know what you finally end up spending to get the goods from China to your destination.
● Can I import items bought from different suppliers in China in one shipment?
Yes, you can.
You just need to inform your freight forwarder about this and provide details of the different suppliers including their address. With this, the forwarder will pick up the goods from the supplier, load them together and ship. If you want to ship items from different suppliers in China in one shipment, it would be best to book pick and delivery services. This will help to ease the importation process to prevent a scenario where goods get lost or forgotten.
● Does this mean that I can consolidate multiple LCL shipments into one FCL shipment?
Pretty much yes!
And, it is an excellent way to save on shipping costs since shipping each shipment separately may cost more in the end.
● How can I do this?
Well, just buy the goods on FOB terms from all the suppliers.
Then, let the suppliers forward the goods to one port of loading in China. Depending on the number of goods, your freight forwarder will load the cargo in an FCL 20 ft. Or 40 ft. Container. Note that this process can be quite a challenge as it can cause delays, lead to loss of goods, etc. It thus requires a lot of trust and coordination between the supplier, the freight forwarder and you.
● What is the best way to pay for freight charges to a shipping company in China?
The best way is to pay using the safest and most straightforward means that you can. PayPal is quite safe and is most commonly used to pay for products and services in China. Bank wire transfer is safe and also popular as a means of payment for freight in China.
● What about paying for supplies?
PayPal and wire transfer are great options. If sourcing from a marketplace like Alibaba, you may use the Alibaba payment system. Here, your money will be kept into an escrow account. The money in escrow will then only be released after you’ve acknowledged receipt of goods.
● How and when should I pay customs fees?
It depends on what is provided for by the customs authorities. Most governments authorize payments via wire transfer and credits cards.
● What is the best way to ship agricultural equipment from China to Europe?
You can choose between rail or ocean freight. Both of these will ensure the safe transportation of your items from China to any destination in Europe.
● When is the peak season in China?
Usually, there are two main peak seasons in the Chinese freight market. These are usually during the second half of the year- mostly from August to October. Another peak season starts in January and lasts through the first half of February. The Chinese New Year usually spurs this second peak season.
Please take note:
During the peak season in China, demand is often very high while supply tends to be low. Due to this, cost of goods and shipping tend to go up. Shipping space also becomes scarce.
● Do the cost of shipping change in China?
Yes, they do and very often at that. A quotation you got last week may not apply this week as prices change rapidly.
● Will I also pay import duties and taxes when I drop ship from China?
In drop shipping, the company or person receiving the goods is the importer. Here, you will not have access to the goods as they are sent directly from supplier in China to the importer. Therefore, the recipient of the goods is the one responsible for paying the import duties and taxes.
● Is insurance mandatory for product imports from China?
Goods insurance is not a mandatory requirement when importing from China. Like most importers, you can import and sell your products without insurance. In this case, you will not have protection against loss or damage of goods since there will be no insurance covering it. Now, while insurance is not mandatory, it is essential mainly if you are importing high-risk products. These are items like electronics, kitchenware or any food contact materials, cosmetics, chemical products, and machinery.
● How much insurance will I pay for my imports from China?
Cost of insurance varies greatly, and it depends on so many factors.
Type of goods, origin country, destination country, and operating procedures (i.e., compliance documents and QC manuals). You will pay higher premiums if importing risky items like lithium batteries from China than you would if importing clothing.
● Is there a way to easily estimate the cost of shipping from China?
Yes, there is.
You can do this using the free online freight cost calculators and get a free quote.
● Can I ship LCL or FCL by rail freight?
Of course, you can!
In fact, the process is very similar to that of ocean freight. Delivery of rail freight is based on the same incoterms and cargo can be loaded as either LCL or FCL.
● How long does rail freight delivery take from China?
Averagely, rail freight delivers items from China in around 23 days. This is the estimated delivery time for delivering items from a supplier in China to a final destination. Note that there are different train routes from China and that different cities have different solutions and lead times.
How do I forward the goods to the final destination, once the train arrives at the destination?
Well, you can unload the goods from the station platform and forward them by truck to the final destination.
How Panda can help you to Import from China
Let me tell you the truth:
Finding a reliable and reputable freight forwarder is key to any import and export business. And, that’s exactly what
Panda guarantees whenever you’re importing from China.
You will get very competitive shipping rate on sea freight , air freight and railway freight. Depending on your needs and ability, you can book door to door, port to port, FCL, or LCL shipping.
Apart from shipping, Panda also provides the following services;
Any way, Panda will help you handle all your shipment from China to your home or warehouse. Just contact us for any freight forwarding and logistics needs when importing from China.
From an economic perspective, I can confidently say that China has merged as a true global powerhouse. Although is still growing, the Chinese trade industry is developing at a rapid rate. Because of this, complexities in importing from China arise every so often. In the initial stages of importing from China, you may wonder where your opportunity lies. You may even shy away from ‘taking on’ the ever-growing market that is China, just like most beginners. But then, what is life or let me say business without risks? Sometimes you just have to take risks although cautiously which is what I hope this article has taught you. As I said, logistics in China can be complex. However, if you buy your goods from trustworthy suppliers in China, you’ll certainly get what you pay for. The trick is learning the ins and outs to be able to import from China like a pro. At this point, I can only hope that you are more confident than ever to import any kind of product from China.