So, why China?

With so much of today’s manufacturing going overseas to booming economies such as China, it’s not a surprise that more and more people are seeing their opportunities follow suit. Due to today’s high costs of operation and a strict regulatory climate, manufacturing in the United States seems like a nightmare. Every day, more and more laws are being passed increasing cost, and it is becoming nearly impossible to match the profit margins that are made available by outsouring. Today, outsourcing has become a key tenet in companies’ strategies to cut costs – and it is helping them do so efficiently.

How do I import from China?

Now – straight to business. The main challenge in finding a supplier from China is combining the correct ratio of quality, reliability, pricing, and time-constraints. Initially, this may seem difficult, but the more specific your niche of product is, the less suppliers you will have to sort through. Thankfully, the internet makes it quite easy to get in contact with suppliers. Several sites will gladly connect you with a network of wholesalers and factories in China who are wiling to accept any and every order you may have for them. For suppliers, sites such as Alibaba and Tradekey will link you to factories which require a higher order volume but will generally provide a better price than other alternatives. If you’d like to start with a smaller volume, you can find a source on Dhgate. As with anything on the internet, each of these sites have their respective risk. However, they are well aware of the opportunities for scammers to come about, and will have rating systems where buyers will certify their past experiences with specific companies.

When you approach suppliers, don’t be afraid to haggle them down as much as possible. Suppliers often start out with unrealistically high prices because they expect negotiation to occur. When neogtiating, make sure that you take shipping costs into account. Shipping costs from China can make or break your profit margins – they add up very quickly! For smaller orders, your suppliers will offer shipping via EMS or DHL. When you begin to place larger orders, your suppliers will put you into contact with shipping companies that will help you broker your LCL (“Less than Container Load”) or FCL (“Full Container Load”)  shipments.

Another key concern that is present during these transactions is payment. Payment to China can be a hassle, especially if you are placing your order for the first time. The main payment options, from most expensive to most popular, are PayPal, escrow, and wire transfer. Sometimes, suppliers will allow you to proceed with a COD (“Cash on Delivery”) transaction, but that exposes them to risk so they are hesistant to accept such terms. PayPal is often the most efficient solution for smaller orders, even with its high fees, as it offers the most protection fo the buyer. The next best thing buyer protection-wise would be to transfer money using an escrow service. An escrow service acts as a middle man between the buyer and the seller, successfully releasing funds after the buyer receives the product from the seller. Escrow is optimal for larger transactions that still require a degree of protection for buyers. Finally, most suppliers will prefer wire transfer in nearly every case. Wire transfer is a direct transfer of funds from your bank account to the receiver’s bank account. Once the funds leave your account, they are no longer accessible and there is virtually no way of getting them back. Therefore, you should be very cautious before authorizing a wire transfer to an unknown merchant. Generally, wire transfers are safer once a sample order has been received and the supplier has proven themselves.

This article provides a basic overview of the process of importing from China and the precautions that should be taken, but you must remember to exercise your own proper judgement! Scammers are everywhere, and doing your research before hand will save you from pain in your pocket.