Category: How To Import From China

How To Import From China

Elksourcing：How to Communicate with Potential Suppliers?

Apr 11, 2021 , by 露露

If properly managed, sourcing from China can bring good profits, however, it’s crucial to work with good suppliers, or the whole business could be a disaster. This is a tricky process. In this article, we will advise you how to identify and communicate with potential suppliers.

1. Drawing your ideal supplier profile

Ask yourself a few questions:

Do you need a supplier with strong engineering capabilities (to develop new products)?

Do you need them to have a wide range of designs that you can choose from?

Do you want them to focus on low cost? Or on high quality?

How big should they be? This is a very important criterion. If your orders are not big enough (over 20K pcs per order), you might need to work with a sourcing company that will place your orders in a medium sized factory and follow production closely.

2. Go to online B2B directories and/or trade shows

If you can get the opportunity to go to a trade show (Canton Fair, HK Sourcing Fairs, and so on) that deals with your product category, go there. Ask a few open questions, the objective here is to eliminate any supplier that doesn’t fit with your ideal profile.

If you can’t physically get to a trade show, you will need to use B2B directories. Beware! They function like the yellow pages (suppliers who pay more, get their products featured more prominently). There is not as much effort to avoid listing bad apples as you might think.

Make sure you look at the information inside the profiles, to target only those suppliers that correspond to your ideal profile.

3. Motivate potential suppliers to respond to you

Most suppliers get too many inquiries and need to choose which ones they respond to. Here are a few tips to get their attention.

The first message should be short, less than 8 lines if possible (including the product description), and with a VERY CLEAR call to action (“get back to me if you want more information about our needs”).

If you have a product specification sheet, share it with them and get their feedback. You should expect them to ask questions about manufacturing, like material specification or, if they don’t accept your tolerances, etc., if they say, “it’s fine”, this is not always a good sign.

And then… Follow up fast in responding to their questions, and finalize your screening process within 5 days. After that, your inquiry, in their eyes, will have gone cold.

If possible, call them (most of them have a Skype account — it allows you to make calls for free if both parties are connected). Show that you are a real businessman and that you are investing your time to get to know them.

How To Import From China

Elksourcing：Managing Risks on Importing Goods from China

Apr 11, 2021 , by 露露

As China becomes more and more as “manufacturing hub of the world”, its manufacturing costs are low in comparison to other places in the world. This has attracted a large number of business people get into the Chinese markets as they opt to import goods and reduce their productions costs, hence gain a competitive advantage over other businesses.

Another advantage has been obtaining high quality products especially for businesses dealing with suppliers who are keen on quality control. While this can be a highly profitable, it may not always be rosy as your business may face a number of challenges and risks that may inversely affect your Return on Investment.

As a business owner while importing goods from China, you may run into a risk of receiving poor quality goods with limited options of sending them back to the seller or improving them locally. This results in financial losses due to costs associated with shipping them back. Sending them back also becomes complicated since you have to make payments before the goods are shipped out. Just like any other shipping business, your products could get damaged or lost while in transit. This results in losses and inconveniences as you place new orders and get your insurance to deal with the associated costs.

In addition, it could also lead to credibility issues with your buyer’s due to promises made on availability of these products based on your shipping schedule. You also run the risk of dealing with spam sellers who are only interested in receiving your money and not shipping your merchandise. Other than these risks there are also other issues that one needs to be aware of such as litigation issues and choosing the right suppliers.

While these risks and issues are real and could appear complicated, there are many success stories on importing goods from China. Yours can become one too if you understand a number of things that can help you to avoid falling into pitfalls associated with all the horror stories you may have heard.

Here are 8 tips on importing goods, that can save your business time and money.

1. Plan your import objectives

2. Familiarize with all rules and regulations

3. Choose reputable Chinese suppliers

4. Negotiate the right deal

5. Have a clear contract in place

6. Understand all commodity codes

7. Acquire an import license

8. Be conversant with taxes and duties on imports.

How To Import From China

Elksourcing：How to Start Importing from China?

Apr 11, 2021 , by 露露

Importing from China can be an affordable way to purchase products for sale. However, importing items on your own requires establishing relationships, setting up shipping, and navigating the regulatory of customs. Get started on your way to importing from China by taking steps to set up your import process and planning ahead.

Part 1 Finding a Supplier

1). Make sure you can legally import your chosen item. Most items will be allowed, but there are certain guidelines that must be followed for some types of items. The United States imposes stricter guidelines on agricultural products, for example. Additionally, Chinese laws may prohibit the export of certain items, like animal by-products or fake designer clothes and accessories. Check with the laws and regulations of both countries before making an order.

2). Make a list of Chinese exporters, or suppliers, who can provide you with your product. The easiest way is to search on B2B websites such as Alibaba, Global Sources, etc.

3). Contact each supplier on your list. Once you have a list of exporters, you can begin asking questions in order to narrow it down to the supplier who is right for you. Some things you will want to ask each exporter to provide you with include: client reference/ business licensing information/ manufacturing and staffing information/ the name and location of the factory producing the product.

4). Investigate the product. Request information regarding the experience of each factory in producing your particular product. You should also ask for samples of the product. Unless you will be manufacturing your own new product, the supplier should be able to provide you with samples of the product so that you can get a better idea of the quality and know ahead of time exactly what you are paying for.

Part 2 Making an Order

1). Make a trip to meet with your supplier. If at all possible, it’s best to schedule a visit to your supplier in China. This will help you establish a relationship with the supplier and get a sense of how well their business is operated. This provides a better opportunity for negotiation than working on a deal via email.

2). Obtain a business visa. In order to enter China, you will need to apply for and receive a Chinese visa for business activities.

3). Negotiate a deal with the supplier. Remember that business interactions with Chinese exporters are governed by Chinese culture and customs, and different negotiation skills and tactics may be required. Some things to keep in mind when negotiating with Chinese suppliers include: The focus is on relationships; Reliance is on moral influence, not legal practice; Hierarchy is important.

4). Begin placing your orders. Each company will have a minimum order amount and a basic shipping agreement. Most exporters expect orders of at least 1,000 units, depending on the item in question. The most common types of shipping arrangement include air courier and sea freight.

5). Pay for your products. To place your order, you will have to pay a deposit on the value of your order. Usually an initial deposit of 30% will be requested by a Chinese manufacturer to get your order into production. The remainder is paid prior to shipment or upon copy of bill of lading. Never pay the entire amount of the purchase order upfront. If there is a problem with the order, you may not be able to get your money back.

6). Avoid payment fraud. Some importers may experience this type of fraud when placing their orders. It typically involves their payment for orders being sent to the wrong bank account, which can leave both the supplier and the importer out of a large amount of money.

Part 3 Getting Your Items Through Customs

1). Hire a customs broker. Locating and hiring a licensed customs broker can make your importation process much easier. This professional facilitates communication between you and the government, fills out and files necessary paperwork, and can help you navigate import regulations. They can also help estimate import costs and how long the import process will take. Just make sure that you can cover their fee with the sale of your imported products.

2). Acquire necessary permits and licenses. Work with your customs broker to identify which licenses and permit you need, if any. Apply for them through the appropriate government channels and wait for your application to be accepted before placing an import order.

3). Submit initial import documents. Once the goods are received by the port of entry, you (or your customs broker) have five days to submit the first round of required import documents.

Part 4 Taking Possession of Your Items

1). Pay your import duties. Your import duties will be calculated using the value of your shipment as estimated by customs officers and the shipment’s grouping on the harmonized tariff schedule.

2). Arrange for pick-up and transport. Contact a commercial cargo company to arrange to have your shipment picked up at the port of entry and shipped to your warehouse or local resellers. Cargo companies can be located by consulting your local yellow pages or favorite online phone book.

3). Check your shipment for accuracy and damage. Once the items have made it to you, look at the packaging and items themselves for any damage sustained over the course of the trip. If there is significant damage, you may want to rethink your choice of shipping method or urge your supplier to better prepare your items for shipment.

How To Import From China

Elksourcing：Tips about Communication with Chinese Suppliers

Apr 10, 2021 , by 露露

In our many years of experience of dealing with China sourcing, we’ve seen a range of outcomes where communication is concerned. The impact is quite often more substantial than you may think, I would say that good communication is the primary reason for a partnership’s success.

In this article, I’d like to share 3 tips about better communication with Chinese suppliers.

1. Recognize that communication is about understanding.

In order for us to understand a perspective outside of our own, we need to actively listen. We are all guilty of wanting to believe we’re right, but the mindful moment is when we realize that others think they are right as well.

Recognizing that communication is about understanding means that we allow all parties to express their position without judgement, interruption or disrespect. Communication ceases to exist without this.

Ask yourself, what is their purpose as compared to yours at this particular moment? Our clients and their suppliers often find their objectives are more similar than they thought. With common ground, understanding is less stressful and more focused on problem solving.

Taking time to listen and evaluate in any given situation actually saves time because it’s likely to avoid conflicts, miscommunication, etc.

2. Nonverbal communication counts.

In addition to managing our own nonverbal communication, it is helpful to assess the other party’s as well.

The tone of someone’s voice is considered nonverbal communication. Be mindful of the tone in any communications, from email to face-to-face. Clarify before assuming.

With operations in over thirty countries, we recognize there’s a heavy reliance on email. But, when emails and regular phone calls fail to get the desired results, try Skype (or whatever similar) or an actual face-to-face talk before giving up. The best communicators know exactly when to make that call.

3. Stay positive.

Staying positive definitely sounds easier than it may be at times, especially when you’re facing production issues, shipment deadlines, etc. Higher stress situations often send all of the regular rules of communications packing. You want your purchase order to be fulfilled and you want it to match the specifications. The supplier wants their payment and says your requirements are not specific enough. What to do? 

Well, take a moment and consider the effect of not smiling in this situation. Not staying positive has a much higher incidence of the situation not getting resolved in an ideal manner. Even if you feel like you’ve gotten what you wanted in any given situation, the future of the relationship may have suffered because you didn’t think about the long-term investment. There’s often significant value there. And, consider that even if you don’t value this particular relationship, it is entirely possible to believe that your negative reaction will result in a poor perception of your organization to your stakeholders. That’s not good.

So, be positive. Take that extra moment to process the effect that being negative will have on the situation and rest assured you do catch more flies with honey.

How To Import From China

Elksourcing：How to Start Buying Products from China?

Apr 10, 2021 , by 露露

Many buyers are still guarded about buying from China – which is understandable, since many of the country’s business practices lag behind those in more developed nations. However, your risks can be minimized by working only with qualified, above board suppliers and by understanding all aspects of your import arrangement beforehand.

If you can, visiting China is a good starting point for doing business there. If you can’t visit first, there are many online sources to help you find quality products and suppliers and minimize the risk of doing business there.

Understanding the market

Before deciding what to import, get as much information as possible about the demand for that product in your local market. Then learn as much as you can about the manufacturers of that product in China. Be vigilant and ask every detail you need to know.

Finding a trustworthy supplier

This is perhaps the most important step in your import business. Dealing with a serious and dependable supplier allays concerns about quality and can help fend off disputes down the road.

There are a number of websites where you can find suppliers. Narrowing down the choices can be a hard task, but your work will be easier if you use a good sourcing partner.

Once you’re in contact with prospective suppliers, address all your quality concerns with the right questions. Clearly state your requirements – like product warranties, key specifications and order terms. Alternatively, some companies will provide product samples if you ask, so you can test them yourself. If you’re happy with the initial quality, you can order in bulk.

Factory visits and inspections

Visiting a China factory can be an important part of making your buying decision. There are a few reasons why you’d want a factory visit:

1. To meet management and see if the company is competent

2. To gauge the factory’s level of technical sophistication

3. To check if the factory complies with regulations and labor laws

4. To see who else has placed orders with that factory

5. To determine if the factory’s production capacity is as claimed

6. To see if the factory is subcontracting production to other factories

If visiting in person is too difficult, consider appointing a local agent or sourcing company to inspect the factory on your behalf. Get someone who speaks the language and knows local business conditions well enough to make an accurate judgment. Most agents charge by commission and will also inspect the output before shipment.

The shipping processes

Product quality can be found satisfactory during your factory visit, but issues can arise once products are shipped. Some problems include incorrect count, wrong mix of product types, improper handling, inadequate dunnage and container damage. You may be faced with unusable products on arrival and a long delay to replace them.

Compliance issues

You need to understand the relevant import compliance regulations before even placing your order. Different regulating bodies in your country may be involved, depending on what you import. Go to their websites for compliance details or to download required forms. Compliance issues can be very complicated for some products, so you might also want to contract a good customs house broker.

Even with the help of a broker, you should track the process step by step. You may need to issue a power of attorney to your broker and purchase customs bonds – guarantees that you will abide by all laws and pay any additional fees incurred.

Neglecting compliance can be costly, in the form of unexpected customs duties or clearance delays. But with adequate planning ahead of time, you can make sure the process goes smoothly.

Landing costs

Get a good estimate of the landing cost before you make your order. Landing cost is the sum of: cost of the goods up to loading on the transport, transport costs by forwarder, import duties, local transport costs, and cost of service providers (inspections, agents, etc.).

Note that import fees vary depending on what you import, the country of origin and destination. Experienced exporters should know how much it really costs to ship to you, but do your homework nonetheless.

There may be many hidden costs in getting your product from the China factory to your warehouse. To minimize those, you may want to consult an import management company for help. Or make a small order first to collect all costs involved and predict these costs for your intended order quantity.

Delivery from the port of entry to your final destination is often an overlooked cost. To resolve this, contact the many “last mile” service providers in your home country. They’ll deliver from your local port of entry to your company grounds.

With some good advance planning, you can import products from China profitably – and with very little risk to your bottom line.

How To Import From China

Elksourcing：What to Do if Production Problems Happen in China?

Apr 10, 2021 , by 露露

During your importing business, if you work with several Chinese suppliers, you will have to deal with production problems, especially for new suppliers. It might be a factory refusing to rework substandard goods, or an unacceptable delay, or simply a project that comes to a full stop without warning.

What to do for you as an importer in such a situation?

1. Show that you are ready to walk away

The favorite strategy of Chinese factories that don’t want to correct problems is… to wait. And wait. Until their customer (who needs to deliver his own customers) must let them ship. So, the first thing to do is to give them the feeling that you’d rather cancel the order (and lose your deposit, if you wired some cash before shipment) rather than receiving products that can’t be sold at all on your market.

The second step is to try to understand the real reason of the problems, and help the factory. Tell them what you can accept, ask them to confirm that they can do it, and then tell them that it is a limit that you won’t allow them to break.

2. Have somebody on site

How do you really know what is going on? By sending someone (either an inspector, or a local agent) in the factory.

And how do you unlock a bad situation? Having someone on site definitely helps. Phone calls and emails to a salesperson will leave you frustrated and apprehensive. In China, delicate business conversations should be face-to-face with a manager.

You need someone who protects your interests on site. And a few hours are not enough (I was told “sorry, our boss is out so we can’t decide anything now” too many times) – it might take several days.

My clients sometimes ask me to go in a factory and talk to a manager on their behalf. I often have to describe the whole situation to the boss, who is not aware of it. It is an important first step. Then I try to find a solution that everybody can agree on (and that means many phone calls to the buyer along the way: it takes time!).

3. Don’t get emotional. Be curious.

Don’t piss the factory people off. Sure, they are at fault. But you will need their help. Bad manners and threats won’t help.

If they stalled halfway through your production, or after substandard quality was detected, there is a reason. Here are the three most common types of issues:

They are giving priority to another customer who is bigger than you… or who is better at defending his interests. You will have to guess by yourself. Once again, having someone on site helps–you can see what is on the lines and understand the situation.

They have a technical problem that prevents them from producing your order, and they tell you it is impossible. If you have some technical experience, you might be able to help you.

In some cases, it is simply a matter of common sense. For example, this week I sent a technician to see why a factory could not press a plastic label properly on the product. She used different temperatures and timings, and she found a solution after 5 tests. It took less than an hour. Sometimes we wonder “why didn’t the factory do this?”

They think your conditions/penalties are not fair (for example you ask them to pay for air freight when they are “only” ten days late).

You will know right away if you are in this situation: they will tell you clearly. It requires a negotiation. The better prepared you are, the easier it will be.

4. Monitor progress closely

Finding a solution, shaking hands and going away are not enough. You should agree on precise steps, and then ensure that they are taken.

If the factory is not moving in the right direction for a few days, you know you are in trouble. You should immediately contact them, and send someone there again if are not given a good explanation.

5. Check quality before shipment

Even if your orders are quite small and you usually don’t control quality, this is the time to do so. A factory that is not happy about you, or that had to rush production, cannot be counted on to deliver perfect products.

If quality problems were noticed, you should impose a re-inspection. But before that, the factory should propose a way to improve the situation. Here are the issues to have in mind, and here is a simple chart of the process.

If the factory is really doing nothing, take the lead and send inspectors for a 100% check. In this case, only what is good can be shipped out. It can be expensive, but not as much as sorting the goods by yourself in your country.

6. Stop giving them orders until problems are solved

This might sound like common sense, but many importers have no alternative. When their own customers ask for more products, they send new POs to the factory they are arguing with. Why? Because they don’t know any other qualified manufacturers.

In general, importers tend to hope that the situation will get back to normal soon, even when red flags are multiplying. Then they get really upset when things are unmanageable. This is way too late. Walking away suddenly from a supplier can incur large losses for an importer.

7. How to prevent this type of situation in the future

Most efforts should take place earlier in the production cycle. Here are a few suggestions:

Avoid giving large orders to a first-time supplier, and increase business slowly (sometimes there is only a certain level of work that they can keep up with, and anything above that level will not be followed properly).

Set up a clear quality standard, and keep referring to it when the supplier asks questions or when you notice some issues.

Follow production closely with quality inspections, if possible both during production and before shipment.

Hold at least some of the payment until the quality of final products and the production status are verified.

If you cannot afford to cancel orders (maybe you have already sold the products on your market), you should cultivate a back-up factory. It can be in China, or in your country (in which case production and delivery can be faster).

Keep 2 or 3 weeks of safety in your schedule. Production problems regularly happen in China. Getting a back-up manufacturer up to speed takes time. Plan for it!

How To Import From China

Elksourcing：Advice about Managing China Manufacturers

Apr 10, 2021 , by 露露

After hard work for some while, you have verified a few manufacturers when sourcing from China. One of them will be your first choice, and hopefully you will have a couple of “backups”. What is the best way to handle them? And what about the unfortunate situation where your “first choice” disappoints you?

1. Cultivate your “second choice”

With a bit of luck, you have found and verified a supplier that seems quite promising. If you want to reduce your risks of long delays, I strongly encourage you to keep communication open with a few more suppliers.

I even believe you should spend the time and the money to verify at least one more supplier, and to start working on pre-production samples with that supplier, even though they are not your first choice.

2. Those “never again” suppliers

Some suppliers will prove to be untrustworthy. The worst scenario, which happens every day, is that they ship bad products to you and that you only notice this upon delivery in your warehouse – or, even worse, in your customer’s warehouse!

At that point, there is basically nothing you can do. Chances are, you have already paid the supplier in full, and taking action against the supplier is usually a dead end.

3. Protect yourself from bad surprises

An ounce of prevention is worth a pound of cure, isn’t it?

Here are two simple pieces of advice.

First, make sure you check quality before shipment. Quality assurance agencies can help you with this.

Second, if you keep re-ordering the same products, you will need a safety stock, to avoid depending too much on your current supplier. How much exactly? It depends on the time it would take you to launch production in another factory.

How To Import From China

Elksourcing：Top 3 Ways to Find Chinese Suppliers

Apr 10, 2021 , by 露露

The rewards from doing business can be great but if things go wrong you end up at the opposite end of that great scale. This is why I always promote that buyers, especially those new to sourcing from China take time to make an informed decision before making a financial commitment.

What sources can I use to find reliable Chinese suppliers?

1. B2B

Websites such as the Alibaba, Global Sources & Made in China tend to dominate this side of things and the accessibility for the services here make it really appealing. Sitting anywhere in the world communicating in real time with someone at a factory in China is pretty cool. So that bit is relatively easy BUT It’s not a sure-fire way to reliability as there are lots of con artists on there too. Don’t follow generic information, only follow real information even if it’s a bit rough around the edges. The crooks never post anything of much substance or anything that’s traceable.

Major Pro: Good companies will be happy to display a lot of information for you to weigh up. The convenience and speed of communication is a massive pro. Get images, videos, business licenses, test reports and product certificates quickly. Legitimate operations don’t have an issue sharing these things. In fact, they will be glad to.

2. Exhibitions

The bi-annual Canton Fair usually tops the bill and is an absolute must visit. The Canton Fair is very good for new product ranges, idea generation and add on existing products. If you are operating in a competitive market it is questionable how you can differentiate your business when accessing the same suppliers that your competition can BUT it must be said the benefit of this being the most economical way to meet multiple suppliers trumps the other arguments. The possibilities to find reliable suppliers at tradeshows like the Canton Fair are higher than online and you will gain the reliability we crave faster. Reasoning for that comes from the fact you have been able to meet people face to face. Just beware that you speak to a manager at least sales level and not just staff hired for the show. There are a lot of other tradeshows out there, try to find out the one suitable for you.

Major Pro: The face time is hugely important as it allows you to leave an impression on suppliers as someone they want to work with and gain as a repeat client. You can also touch the products, get a feel for the company and talk through various details which increases your ability to weigh up important details when finding reliable Chinese suppliers.

3. Sourcing Companies in China

There are now plenty of great options in this area. These companies bring western management and local knowledge to the table. If you are struggling to satisfy a requirement or prefer to spend more time servicing customers then utilizing the valuable resources of a sourcing company in China ticks the box. When finding reliable Chinese suppliers, it can be a great option to leverage experience gained by your fellow countrymen. The reliability factor should be already built in here but that’s not to suggest these sourcing companies are above the law. They should be able to satisfy the same questions who have raised to a random supplier on Alibaba.

Major Pro: These companies do this for a living. The mass experience built up within a sourcing company operating in China for 5-10 years can be of huge benefit. They rely on connections and trusted relationships instead of B2B platforms.

These are the 3 most popular routes to take, social media sites like LinkedIn are also becoming viable options. For the more traditional types among us always be on the lookout for an introduction from a trusted source, that could be someone you know already doing business in China, the local chamber of commerce, etc.