Guide on Importing Goods from China

Article Catalog

1. What Conditions Do You Need When Importing from China?        

2. Why do Many Businessmen Import from China?        

3. Nine Steps to Successful Import from China        

4. FAQ about Importing from China        

 

 

Today, importing from China is a crucial element of many successful businesses. Unfortunately, many people think it is too complicated or risky to take advantage of this tremendous opportunity. But if you know how, this can be a powerful way to drive profit and expand your business.

We’ve put together this guide to help your company navigate the process, overcome common issues, and find the success you are looking for.

 

1. What Conditions Do You Need When Importing from China?

 

(1) Starting Funds:

You need to be able to pay the following expenses, the value of imported goods, shipping costs, customs broker fees, customs clearance fees, and import tax, in addition to the provision of funds for cargo turnover, warehouse costs, etc.

 

(2) Sales Channel:

You need to prepare your sales channel in advance, whether it is e-commerce pre-sale, retail, or wholesale, prepare the channel in advance, instead of waiting for the goods to arrive before expanding your sales channel, then your goods will have the risk of depreciation, and expiration as well as the opportunity cost of capital.

 

(3) Import Authority:

The customs of each country have corresponding provisions for import authority, and general products will not have strict import requirements. Take importing to the US as an example, importers do not need to apply for an import license, but only need to own and provide a Business Tax Number to go through the import clearance formalities.

 

(4) Email / WhatsApp / Wechat

You have to communicate with Chinese factories, freight forwarders, and other partners, Their sales staff will generally have email communication, but prefer timely communication tools, in China WeChat is the most popular way of work communication, but sales staff will have WhatsApp, you can use these two mainstream IM to communicate with them in time.

 

(5) Enough Time

You need to take the time to study your target market, product supplier screening, forwarders, and customs clearance methods in your country.

But before that, let’s learn why businesses prefer to import products from China and the key benefits of doing so. So, without any further delay, let’s dive right in.

 

2.Why do Many Businessmen Import from China?

 

China is the world’s largest exporter because the goods are inexpensive, relatively high quality, and easy to source. And the export side of the economy gets a lot of support from the government, ensuring generally smooth sailing.

 

(1) Price:

The main reason people love these imports is that Chinese suppliers and manufacturers provide products at a lower price. Compared to Europe or the US, China can create goods at a much better value.

 

(2) Quality Control:

While there are other countries that are even cheaper than China, many of them do not have the quality that Chinese corporations do. When you import from China, you often have robust warranties and can expect an inspection process.

 

(3) Easy to Source:

Choosing the right Chinese supplier is easy because of how many credible online platforms there are. You can choose from sites like Alibaba and Made in china and so on or connect with a trade company or manufacturer.

 

(4) Government Support:

The Chinese economy relies on exports, and so the government makes it easy to purchase these goods. In some cases, they will offer discounts to offset any value added tax (VAT) that you might face.

 

3. Nine Steps to Successful Import from China

 

If you are ready to begin acquiring China exports, this section gives you a step-by-step process. We cover everything from finding Chinese suppliers, grasping import laws, and calculating import costs.

 

Step 1: Select Products to Import

Deciding what products to import is an obvious first step, but it is an essential part to finding success. If you make the right choice here, the entire process will be easier and more profitable.

Some important considerations when selecting a Chinese product to import:

 

 

Step 2: Know the Relevant Import Laws and Regulations of Your Country

The regulations and laws surrounding imports from China will differ depending on your country and region. The code for the United States is different than for the European Union.

Whatever country you are importing into, knowing the relevant importing laws is key. Don’t make any agreement until you have a grasp of what your local regulations around import are.

It’s important to remember that these rules are all subject to change, so keeping up-to-date on changes is a good habit to get into. Of course there’s a simpler way to find your own import customs clearance company. They can guide you on the necessary documents or qualifications required for importing your products.

 

Step 3: Know China’s Export Law and Calculate The Cost

The purpose of getting knowledge of China’s export policy is to know the relevant policies of the Chinese Customs on the imported goods you wanted, and whether there are any export restrictions, such as the regulation for export quotas, export taxes, certification, and restrictions imposed by the importing country, etc. you can judge the difficulty of importing such products.

Getting knowledege of these policies that you do not need to search for information on your own. The quickest and easiest way is through Chinese freight forwarders or customs brokers, who are more professional.

 

·       Familiar with China’s Export Policy

US companies import more from China than any other country, and that’s in large part because China makes it easy. That being said, there are still laws around export for Chinese companies.

The key costs you need to understand are your tariffs — the taxes you pay when importing goods. On the other hand, duties are taxes charged to the customer who buys an imported product.

In the US, you do not have to pay tariffs or duties on shipments valued below $800. For imports above that point, you’ll likely pay the standard 19.3% tax on imported goods.

There may be other taxes, so you’ll need to look up your industry on this helpful online tool to figure out what you’ll owe.

 

·       How to Calculate The Actual Cost of Goods and Control Your Budget

First of all, we should list all the costs we have learned and calculate the corresponding gross profit.

 

Secondly, calculate the purchase cost of your actual goods, and then see if your profit margin is sufficient according to the target position of the market and the price of your competitors. If it is not enough, then you should review which part of the cost is high, and ask several suppliers one by one for each field, such as product manufacturers, Chinese forwarders (licensed customs broker), and customs clearance forwarders, mainly the cost of these three pieces.

 

Calculation method of gross profit margin：

1. Total Purchase Price=Purchase cost + Land freight in China + Freight cost + Customs broker fee + Import Tax + Customs clearance fee + Domestic land freight + Other expenses 

2. Gross Profit Margin / pcs= (Retail price-Total purchase price) / Retail price

 

Step 4: Find Chinese Wholesale Suppliers

Sourcing is the step where you find the wholesalers that you can actually purchase a given product from.

There are three main options for finding Chinese suppliers:

Supplier Type	Business Model	Pros	Cons
Manufactures	Primarily manufactures certain kinds of goods from raw materials	1.Lower price 2.More professional on products 3.Experienced in the industry	1.Less variety of products 2.Higher MOQ
Trade Company	Does not primarily produce goods but rather sources a variety of products (from one or more factories) that they keep in stock	1.More variety of products 2.Lower MOQ 3.Professional service and communication	1.Higher prices 2.Lack of product expertise
Sourcing Agents	A sourcing agent is an individual or company that helps businesses source products in another country	1.Rich supply chain resources 2.Professional service and communication	1.Higher prices 2.Lack of product expertise
Personal SOHO	Personal freedom status, help businesses from sourcing, bargaining, quality control and shipping of all things, relatively high personal requirements	1.Lower price 2.Easier to communicate	1.High requirement for personal SOHO 2.Certain trust risk

 

According to your current stage, it is more appropriate to judge which type of supplier you choose. If you are a new entrepreneur and the product is relatively single, you can choose trade company or sourcing agents; If you are very professional and have a single demand for a certain product, you can choose to directly dock the manufactures.

 

 

 

Step 5: Find Right Supplier and Place an Order

1. Find Right Supplier

Now that you’ve done the homework, it’s time to choose your supplier. There are a few great places to start:

 

·       Supplier directories

These are searchable databases where you can find all kinds of factories and vendors.

 

·       Offline wholesale marketplaces

There is also a very direct way of sourcing products to quickly see many of the product categories you want, which is to visit some well-known wholesale markets, such as China Yiwu Trade Mall or Vietnam International Trade City (VITC). This product sourcing method is suitable for three types of purchasing managers.

1. Want to know the future features and appearance trends of a certain category of products

2. Worry about choosing suppliers online.

3. For a large number of product categories and small quantities

We have compiled a list of various categories in China’s well-known wholesale markets.

 

 

·       Online wholesale websites

This is much more convenient than the offline option. There are many options today, and this is particularly popular for those looking to import from China for dropshipping.

 

·       Trade shows

China’s top 5 trade shows are the Canton Fair, Yiwu Trade Fair, Beijing Auto Show, the Bauma Fair, and the Shanghai Import and Export Commodity Fair. They have great influence and are becoming increasingly important as China’s economy grows and Chinese technology improves. People from all over the world attend them.

 

Chinese trade fairs are becoming increasingly important as the size of the economy increases and the technology level improves. Hundreds of thousands of business people attend these five conferences from basically every country in the world hoping to buy or sell needed products and scout for business opportunities.

Here is my list of the top 5 exhibitions in China, including exhibition time, key products, location, price and visit suggestions.

 

 

·       Import Records

If there is a particular product you are impressed by, you can check public records to see where it came from. Sites like Port Examiner, ImportGenius, and Panjiva give you access to bills of lading for imported products. Those bills have the importer’s name, the supplier’s name, and shipment details.

 

·       Port Examiner is a free tool that allows you to search through archived import records instantly. It is functional on a small scale but lacks the features needed to aggregate raw data and export it as a CSV or Excel file.

 

·       ImportGenius is an international trade database that allows users to download aggregate import data in spreadsheet format. Its starter plan costs $149/month, but a one-month free trial is available to get started.

 

·       Panjiva is a much more robust tool that comes at a steep price. Its platform includes advanced search functions to find relevant import data by HS number, item category, location, and more. It also expands many import records into full company profiles and provides contact information. Membership costs aren’t disclosed, but a one-month trial is available for $400.

 

Once you have names of potential suppliers to pursue, search the internet for contact info and try getting in touch. We feature tips on initiating contact below.

 

2. Purchase Products

With the legwork of sourcing out of the way, you find the right products and suppliers, and proceed to establish key info, such as:

·       Product sample option

·       MOQ

·       Lead times

·       Payment terms

·       Packaging

·       Material specifications

·       Quality standards

·       Shipping Terms

 

To get a more accurate picture of the supplier’s regular output, try placing a trial order. Many suppliers allow new buyers to make one purchase under the normal MOQ. By ordering a small but sufficient trial order, you can test the true quality of the supplier’s product.

 

Once you’re satisfied with your new supplier, you can attempt to negotiate before making a full purchase. Of course, high-volume businesses have more bargaining power, but even small operations may be able to negotiate purchase price, freight terms, deposit terms, and packaging details.

 

When reaching cooperation with the supplier, it is necessary to do the following work：

·       Sign the contract (price/payment terms/product specigication/shipping terms/delivery time)

·       Confirm the sample (confirm that the samples, bulk goods and samples should be consistent.)

·       Packaging mode

·       Materials needed by customs broker (Packing list/ Commercial invoice/Certification/Bill of lading/airway bill)

·       Materials needed by customs clearance company (Packing list/ Commercial invoice/Certification/Bill of lading/airway bill/Certificate of origin)

 

Step 6: Placing Order and Signing Contracts

If you are not 100% confident in your China import source, place a trial order. This will minimize your exposure to risk and give you experience in getting these goods from a foreign manufacturer into your customer’s hands.

While most manufacturers have a MOQ, your first order can typically be below this.

You should also investigate sample options. These allow you to get hands-on examples before you make a large order.

Once you have chosen from the samples, it’s time to sign the contract. This step also includes getting documentation together for customs.

 

Step 7: Quality Control and Inspection in China

Quality control (QC) is a process where an institution (typically third party from the manufacturer) takes a look at the production of your purchase. This makes sure that your end customer is satisfied.

The most obvious benefit to QC is that your product will have fewer defects. That also leads to fewer costs due to bad products, and it eliminates any lengthy back-and-forth with a factory to secure your warranty.

Many countries will even require inspection certificates on imports. So if you already have those in place, you won’t face unexpected delays.

 

Step 8: Arrange Cargo Transport

Once you have placed your purchase order, it will be time to start arranging cargo transport. You will have to facilitate inland transport depending on the shipping terms of your order. This should include your export customs clearance and loading. Mostly these arrangements are made by the supplier if it is the new one.

The KPI of the high quality freight forwarder company is that there can be no shipping delays and no loss of goods.

You will have various options for cargo transport, including air couriers, air freight, and sea freight. Make sure to weigh all your options before making any particular arrangement for your cargo transport or shipping purpose.

Sea freight is quoted by volume, while air freight is quoted by weight. Air couriers are the most expensive method of transportation. Air freight costs half of it and sea freight is the cheapest way to import from China, costing only 10% of its cost.

Take imports from China to the United States as an example，Learn about the current freight rates for shipping and air transportation from China to the US (FYI).

 

Transport Method	Weight Guidelines	Average Cost	Average port- to-port time	Average door-to-door time (includes customs and inland transportation)	Remarks
Air Courier	≤150lbs (≤68kg)	$7.5-$9/kg	5-7 days	4-6 days	Regular product/middle area of US
Air Freight	200-500lbs (90-225 kg)	$3.85-$5/kg	5-7 days	8-10 days
Sea Freight	500+lbs (225 kg)	$1.8-$3/kg	20-25days	20-40days

 

Once your goods have been cleared through customs and all parties have been paid, the cargo needs to either be retrieved or transported to its final destination.

If you shipped LCL (Less than Container Load), your goods would arrive in a container with a variety of other shipments. Typically, after customs clearance, this container will be transported to a separate location for destuffing. In these cases, you (or your freight forwarder) will be provided with a secondary location near the original port.

If you shipped FCL (Full Container Load), the port of entry would be the location to use. You’ll also be provided with a Cargo Control Number that serves as a unique identifier for your shipment. These details can then be used to pick up or ship the imported goods.

 

Step 9: Clear Your Shipment through Customs

It’s important to have the essential documents for China imports ready so that you can easily clear customs. If you mishandle customs procedures, your hard work will be for nothing, as these are very tightly controlled in just about any country.

Once you have the product in hand, you will need to transport it to storage. In some cases, businesses will be able to manage this themselves, but small operations or companies that don’t want to deal with a fleet of vehicles will need to pay someone else to do this.

 

4. FAQ about Importing from China

 

Q1: What Risks May You Meet When Importing Products from China?

The main risks come down to potential delays in shipment, violation of agreements, legal problems (including intellectual property concerns), and financial issues.

None of these should prevent you from taking advantage of the amazing opportunities in Chinese imports. But they do mean you should be careful about who you do business with and how.

 

Q2: Do I Need A License to Import From China?

You do not need a permit or license to import from China into the US. However, some special products might require a license from a related agency.

 

Q3: How Much Does It Cost to Import From China?

Merchandise processing fees (MPF) will be charged when Chinese products are imported into the US by Customs and Border Protection (CBP).

1. For goods valued at $2,500 or less

• $2.22 for automated imports that the CBP doesn’t process
• $6.66 for manual imports that the CBP doesn’t process
• $9.99 for any imports CBP has to process

2. Goods valued at more than $2,500

• 0.3464% of the value of the goods charged to CBP
• This fee can not be below $27.75 or above $538.40

These charges are on top of the 19.3% tax on shipments valued above $800.

 

Q4: What Documents Do I Need to Import Goods from China?

When import goods from China, you will need to provide the importer with various documents. These documents include the following:

· Commercial invoice

· Packing list

· Bill of lading/airway bill

· Certificate of origin

· Customs clearance documents

· Packing details account (if any)

· Statement of insurance premiums (if any)

· Other necessary document

 

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