How to import from China

Many fresh business people, who want to start import/export and import goods from China, are struggling to import products from China safely.

There are many questions, like where to source Chinese goods? What products should be imported from China? What experience needed to import cheap Chinese goods safely? How to make sure you won’t be scammed or cheated? Making sure, is the supplier reliable? How to make sure you won’t face problems in customer later on?

And the list goes on and on…

Do you afraid the US-China trade war 2019/20 would have effect for your import-export business?

Actually, we have good news for you!

In reality, the trade war creates many new export-import business opportunities. For people outside of the USA, the benefits are still growing up, which means there is a lot of money possible to make. Also, there are still opportunities for Americans. Just Americans need to select the goods more wisely before entering into importing from China.

So don’t miss the opportunity to import from China! Imagine after 20 years, how big business you may have if you begin from today.
Also read: Should you really start an export-import business

But now this article will show you in details what you need to know when starting importing goods from China. Let us dive in!

How to import goods from China to sell – A Step by step guide

A short history of importing from China

A few decades ago, importing from China was mostly available for big corporations. So don’t be surprised that most of the large corporations in the world (including big brands such as iPhone, Samsung, Uniqo, Zara, H&M, Mango, Adidas, Espirit, Tesla, Caterpillar ..) are always targeting countries with low labor costs to sign production and processing contracts.

Previous means, Chinese products are extremely diverse in types, designs, uses, specials, and low prices. China covers every possible industry out there. Everyone will find suitable products from China.

Unlike 20 years ago, the shipping was the most bothersome part of the import. Nowadays it is extremely convenient as you can just stay in your room and receive what you order.

Therefore, you will not have to worry about the difficulty of selecting the right products and the quantity you need to import. Everything is already available for you in China.

The product is the soul of the business. Buyers will not care about the size of your company. They mostly care is products that you can provide, based on their requirements and unique needs or not.

The following steps will guide you on how to prepare for importing the products from China.

Step 1:  Identify the products you want to import from China

If you want to start an import-export business but you don’t know which products to start with, we’ll give you some ideas.

First of all, China is a market that provides a diverse source of goods but may bring many risks to product quality. To avoid encountering poor quality products, you must always be alert, not just guessing the quality through the cost.

The one who wants successfully import from China. With “successfully”, we mean a profitably, so in total, you can get a remarkable profit after re-selling your products. The one must choose and import products which meet at least the following criteria:

• Demand for the product is regular and sufficient.
• Profit margin ( Product sale price – product landed cost at your warehouse) is at least 30-50%
• Product is reliable and the possibility for warranty cases are low
• During the stay in your warehouse product doesn’t have high maintenance costs.
• Product is not counterfeit!!
• Product sale price is affordable for the targeted people you wish to sell to.

Make a plan which details what you require for the product from China. So you do not miss the necessary information. After criteria are set, you should conclude a list of the potential products you wish to import from China.

To compare potential products, e-commerce websites are good resources, like Taobao, Jindong etc. But Chinese e-commerce websites are almost all with Chinese characters, which will be difficult for you to find product information if you don’t know the Chinese language. You should thoroughly use the translation tool to understand.

We would suggest comparing and learning products in Alibaba or Aliexpress which are purely created for overseas importers. There you no need to know mandarin, as all is revealed in English there.

If you compare products in Aliexpress example, then usually, products with high sales volume ( number of the transaction) and with many good reviews and high ranks, these are favorable products, reliable for you to dig in.

In our export blog, we have written more in details about how to select the right products for your export-import business. You can read the full article below:

Related reading: How to choose the right products for the export-import business

Step 2: Find the source of supply

After obtaining the list of products and deciding the one(s) you want to import from China, the next step is to find a reliable supplier to buy those products from.

You should have at least two suppliers at the same time to ensure stability for your company. In case one supplier cannot provide goods in time, you still have another alternative source. Your business will not be interrupted.

You need to find reputable partners who can take responsibility for work and cooperate long term, so your business will go well and can save a lot of cost and time. After-sales support is also important for your business and clients.

If importing from China you need to communicate with Chinese people. We advise finding a person with good communication skills who has experience with Asian people. Someone who can communicate well in Chinese or English to contact and negotiate with the suppliers, this helps you get the best possible prices.

How to contact Chinese suppliers

We advise to search and reach out to the suppliers in Alibaba. If you select the suppliers whom to contact, then we advise contacting ones which are many years gold suppliers in Alibaba, are providing trade assurance and are verified.

It is important to contact with many potential suppliers, compare and analyze them. You need to have suppliers which meet at least the following criteria:

• The supplier has long term experience with your products and is professional ( technically and commercially)
• A supplier must give you a price, which gives you a sufficient profit margin.
• The supplier can provide after-sales support, warranty.
• The supplier has all the needed certificates needed in your country, for importing.
• Supplier is already exporting to your country and can show you some references.
• The supplier can give you reasonable payment terms, Alibaba trade assurance, and other instruments to give you extra security.

Based on our own experiences we have written an in-depth article about how we selected, analyzed, compared different Chinese suppliers and finally imported from China. Read it here: Importing from China ( Case Study)

Step 3: Payments to Chinese supplier and secure your products

After you have chosen a supplier, then there are 2 most important questions entrepreneurs will face. How to secure the payments and ensure the goods ordered will be good quality?

How to secure the payments to the Chinese suppliers

It is normal, that if you import from China and order the goods, you shall pay at least 20% advance to the Chinese supplier and the balance before delivery. I this case you need to know how to handle the payments most secure for you. Below are some options/tips you can use, to secure your payments.

• For small orders, pay the advance payment via Paypal or via Aliexpress. This allows you to ask for your money back if the supplier fails to provide the goods or the goods are not the quality you expected. You can see a screenshot below about how the Aliexpress payment insurance works and what is its main purpose

• Always sign the sales-purchase contract before any payments. The contract shall include the stamps by Chinese supplier and shall be signed each page by the Chinese company authorized representative ( CEO or owner). Additionally, we advise asking the Chinese side to add passport or ID card copy of the signee in the contract
• If the advance payment is in bigger amount ( over 10 000 USD), we advise considering the LC payment, which releases the money to the Chinese supplier when the progress is sufficient.
• For balance payment, LC payment is a good option. LC shall be agreed so, that the supplier will get the money when the crucial documents had been provided to your bank: Documents like Final inspection report which confirms the goods meet the qualitative and quantitive requirements, packing list, bill of landing original.
• Before making the final payments, we suggest to personally go and visit the supplier and check the goods to meet the demand.

How to ensure the product is good quality and ready on time

There are many ways to secure product quality and delivery on time.

At first, what you need to do is find out how the company works with your order. Means you shall get the order processing schedule from the supplier.

Ask your Chinese supplier to provide you a working schedule of your order. And you as an importer shall keep on your eye of the schedule and important milestones. Ask regularly an updated from your supplier about the status and progress of your order.

Companies with sincere intentions, you will be able to update your order details.

As a second, if your order is relatively big and complex, personal visits or sending the SGS inspector to check your order would be good choice.

Lastly, in the phase of signing the ordering contract, your as an importer, shall put the clause and terms into the contract regarding the penalties of later delivery. This clause can be something like follows below.

Late delivery and penalty
Should the Seller fail to make delivery on time as stated In this offer, for reason other than force majeure, the buyer shall agree to postpone the delivery on condition that the seller agrees to pay a penalty which shall be deducted by the paying bank from payment. – The rate of penalty is charged at 1% of shipment value per day for the first week. – 2% shipment value per day for the following weeks. – However, the total of the penalty shall not exceed 15% of the total value of the goods involved in the delivery. – In case the seller has signed PO but cannot ship the goods on the due date, the seller has to pay a penalty of 20% of the total value of the purchase order.

For this chapter, we advise reading further: biggest risk in export-import business and how to manage these.

Step 4:  Prepare documents required to import from China

If you import a large number of Chinese goods into your country, certain documents are required to clear the custom in your country.

The preparation of documents on time is the most important for the stage of customs clearance. Preparation early and accurate documents will contribute to 95% of the customs declaration speed as well as customs clearance costs.

When you want to import a quota shipment, you first need to get the following information:

• Information of the goods to enter, such as the full name of goods, packing specifications, weight, number of blocks …
• Conditions of purchase and sale among parties are EXW, FOB or CIF …
• Documents required for goods to be imported ( ask from your custom)
• The import procedures related to customs, quality control department at your country custom.
• What taxes are required to pay for this shipment? Are goods to be imported in the list of goods eligible for preferential treatment according to the state policy?

For different kinds of products, the import requirements, required documents, procedures can be different. But in general, if you want to import from China, prepare the following documents:

Documents needed for import include:

1.  Purchase contract. (prepared by importer mostly)
2.  Invoice. (prepared by the seller)
3.  List and details of the goods (packing list). (prepared by the seller)
4. Shipping cost invoice or bill ( issued by the shipping company)
5.  Bill of lading. (issued by the shipping company)
6.  Coupon, if any. ( by the seller)
7.  Notice of arrival. ( by shipping company)
8. Certificate of origin. ( Seller will apply for the goods he sells)
9.  Other relevant documents (if any). ( seller, buyer or other parties involved)

Some of the previous set of documents will be prepared by the Chinese seller and sent to the buyer. It is wise to ask the seller to send drafts for review before sending the original to your country custom.

Proforma invoice is one of the most important documents for your custom!
For all dutiable shipments, an invoice (provided by the supplier) will be required by custom. Proforma invoice must include:

1.  Number and date of issue
2.  Full name and address of seller and receiver, including contact details
3.  Description of goods in plain language and sufficient detail
4.  VAT numbers for seller and Receiver if applicable
5.  Harmonized System Code (“HS Code”)
6.  The total value of goods
7.  Currency
8.  Country of origin (of goods)
9.  Payment terms (value for customs only for example)
10.  Delivery terms
11.  Signed and stamped (if applicable)

You should be careful in checking the validity, and completeness of the documents. If something is not valid or missing, can cause you trouble and costs, lost time in your custom.

Our experience with the procedure shows that being cautious in this step will help you make import procedures much more convenient.

Before importing from China, read our detailed article below.
Related reading: Import and export procedures and documentation.

Step 5: Search for shipping methods – What is the cheapest way to ship from China?

Shipping by containers via Sea:

This is one of the most popular forms of freight from China. The advantage of this form is the flexibility, low costs, convenience, transport of large and bulky goods. The only disadvantage of sea transport is the slow delivery time

Not only small companies but also large businesses also use this form primarily because the price paid for sea freight shipments is relatively cheap, unrestricted about the types of goods, including liquid.

Shippers can hire container truck (full container containers – FCL) or small trucks (with LCL retail shipments), and send them to the delivery pick up an address that the shipping agency will provide (shipping company or forwarding company). After goods picked up ( loaded in truck, container, cases) The goods will be transported to the custom warehouse to complete customs procedures at the warehouse. Then the goods are ready to export, will be loaded on the shipboard.

Many people are afraid of stowing many steps, and want to find freight forwarding companies to get all the services from one place: shipping, customs, transport … If you don’t have the experience, or really want to focus your time on your business, hiring a service will help you a lot.

Shipping by air cargo:

In the way of importing goods from China, shipping by air has many advantages. It is suitable for transporting high-end items such as perfume, cosmetics, smart electronic devices or products that cannot be kept as long as fruits and fresh food.

Cargo transport by plane gives the fastest, safest results, however, the highest cost. So air transport is an option when the time matters or the volume/weight not so large.

In addition, the procedures for air transport are relatively cumbersome, complex customs, high requirements of origin of goods …

Courier companies with their own aircraft will transport their own goods, while the rest will hire airlines.

*** How to rent a cargo ship (Only for very large delivery)

1. Importers meet the charterer and make requests for cargo transportation
2. Ship offering broker: Based on the request of the importer to select and select suitable shipping lines to offer to the shippers.
3. Brokers negotiate charter terms with ship owners including shipping conditions, handling charges, costs, ship location, time.
4. The broker notifies the importer to prepare for the signing of the charter party
5. Signing a charter party
6. The importer takes the goods to the port to load on the ship
7. Shipowners or ship agents issue bills of lading. This bill of lading is called a bill of lading under a charter party.

Final notes for choosing and organizing the shipping from China

No matter you choose the air delivery or sea freight. You shall compare different possible service providers offers and conditions. The prices and conditions can vary a lot. Also, don’t forget to ensure your delivery. Insurance fee is small, but it can save you if something goes wrong during the transport.

Step 6: Customs declaration

In this stage, your goods already successfully landed in your country or end destination. This is one of the last steps to finish the importing of the goods from China. Soon, you are free to resell your imported products!

A brief guide on how to proceed with the custom

1. Prepare the goods document to your custom or custom agent
2. Prepare digital signature, register with General Department of Customs
3. Registration for specialized inspection (if any)
4. Fill the declaration and transmission of customs.
5. Pay the required import duties and taxes
6. Get the goods our from a customs warehouse in your country

Most important and critical is the correct filling of the Custom import declaration! We kindly advise using an experienced custom agent for this.

Customs declaration requires the declarants to be both experienced and responsible to act on behalf of enterprises to carry out legal procedures for customs offices and tax authorities. Customs declarants must ensure compliance with the customs declaration process, prepare standard documents and minimize costs, reduce customs clearance time, avoid storage and storage.

Step 7: Pay import duties, taxes and get your goods for free use

After import taxes and duties had been paid, you are legally free to take your goods out from custom and start reselling!

After custom procedures finished and customs accepted your import declaration and other documents, there is the last step to be done before you are free to get your goods out from the custom. Pay the declared import duties and taxes.

In this stage, your custom agent or the customs itself will provide you the details to where and how much to pay the import taxes and duties. After paid, you are free to take your goods out from the custom supervision. Now you can start selling your imported goods!

Previous was our 7-step guide, how to import any goods from China or other countries. Nextly, we will show you some different ways, how one can import goods from China.

Common ways to import goods for starters

In your opinion, how many ways do we get Chinese goods?

There are 3 ways to import your goods! However, each way will have its advantages and disadvantages. You need to read the followings carefully and then compare what you need, what you are missing or what you need to meet. Based on that, you can choose the most suitable form for you. Now we will go into every detail!

1.Direct import from China

This means you need to personally go and visit the supplier. This way is also what we suggest and our previous guide about how to import from China is mainly based on a direct importing model.

This way will have the following advantages and disadvantages:

Advantages:

– Can buy goods at the factory at the original price. Buy unlimited quantities, unlimited models and categories. There are a lot of unique, strange, designed goods for you to choose from.

-You can combine many activities when traveling to China and visiting the supplier. As an example you can visit beautiful scenery, do shopping, taste Chinese food and do other things in this large country.

– Can create personal connections at the first time meeting. Become familiar with the supplier so next time you can order the goods yourself without going there.

Disadvantages:

Travel cost, transportation and translator costs (in case you don’t know the language) plus the value of your own time. Therefore, you need to estimate enough amount of money for this.

2.Import online by Alibaba/ Taobao

Some of China’s famous online-sales websites are 1688, Tmall, Taobao, Aliexpress, Alibaba. You can just use one account of an Alibaba group website which allows you to buy from many different websites.

If you are selecting the supplier from Tmall, Taobao, Alibaba sites you should choose the reputable shop. You can choose based on the number of reviews and feedback of customers who have previously purchased in the shop.

Below we will look at some of the most famous Alibaba group e-commerce sites.

Taobao.com

Is a famous Chinese domestic sales website of Alibaba Group, Taobao.com has a huge source of goods, with a variety of types, designs, sizes, quality with different price levels and many suppliers level for you to choose. The prices of the products on Taobao are very cheap compared to the other online markets.

1688.com

This is an e-commerce site specialized in selling goods to Chinese inland people. To import goods from there, you should ask friends in China to help purchase the goods.

Compared to the goods on Taobao.com, products on 1688 are sold at extremely low prices. Especially the fashion goods which are beautifully designed and also good quality. Additionally, this website is very strictly managed, so a buyer will be safe shopping there.

Tmall.com

This website is specializing in high-end Chinese domestic goods but higher price than Taobao and 1688. The majority of goods on Tmall.com are branded goods, have been closely censored and have proven origin and clear origin.

Actually, Tmall is the best choice for them, who wants to export to China.

Alibaba.com

No doubt the Alibaba is most famous for importers. Alibaba is especially built and designed for foreign importers. Wide choice of verified suppliers, all possible industries covered, trade assurance, Alibaba own inspection service available, safe payments trough Alibaba can protect the importers. Plus other valuable services. This platform is the most important resource for the one who wants to import any goods from China.

Difficulties with online platforms

• You need to have an account of the online sales website, need an Aliplay payment account ( for Alibaba no need) and need a specific address in China so that the shops can transfer orders there.
• Procedures and processes for buying goods are complex, it requires too many things for people who first time buy goods, it can make them overwhelmed and confused.
• If you do not know how to choose the source of goods or a trustworthy supplier, you will easily be mistakenly bought the wrong goods or from an unreliable supplier.

Note: previous 3 points are mostly true for the Chinese local platforms ( Taobao, Tmall,1688, JD). Alibaba, on the other hand, is designed easy to use for foreigners.

3.Import by intermediary

Through intermediate import services, you will be supported to find cheap Chinese goods at Chinese factories. You can negotiate for the least risky payment method.

Intermediaries will assist in finding goods, ordering goods and shipping to your place

Intermediaries also provide expert guidance for businesses in the production process.

This method is less and less common now, as intermediaries will rise the product cost for the importer. The biggest problem of this method is the high, end-value of imported goods.

At the end of this chapter, we advise reading our guide: How to start export-import from home

Best products to import from China

For a business to be profitable it depends, how well it meets the customers shopping demands. Below is a shortlist of popular products categories to import from China, with good profit potential in 2019/2020 and beyond.

Electronic goods

Electronic goods in the world have a large source of customers but it is always in lack of supply.

Products such as computers, mobile phones, televisions, computers, refrigerators, cameras, and small electronic components are all manufactured with great precision in China.

China’s electronics industry is developing very fast and the prices are cheap.

Guangzhou fashion goods

Shoes, clothes, bags, hair clips, belts, earrings, bracelets … from China are very popular among women.

Cheap prices, wide source of supply, constantly updated models are the characteristics that make Chinese fashion goods become the best-selling. Therefore, do not ignore them in your business plan.

Note: You should choose the size and the measurements carefully because Asian measurements are smaller than Europeans.

Interior goods

Items such as furniture, cabinet beds, bookshelves etc produced from pressed wood, Chinese hard plastic is popular in Asia and West.

Although transportation costs are higher by their large size, more capital required than consumer goods, interior goods are still easy to import from China, cheap and profitable.

Industrial machinery and equipment

Chinese made high tech machines, equipment and apparatus had been developed a lot during the last decade. Now the Chinese made industrial machines technical level and reliability don’t stay much behind the Germans. But the price level can be 2-3x lower than a similar machine made in Germany.

To give you even more ideas which products to import, read: Import-export business ideas.

Import from China to India

Importing goods from China to India follows the same 7 steps we have described in the first part of this article. So if you want to import goods from China into India, then you can just follow the 7 steps above.

But still, every country has some specifics only unique to it. When importing from China to India, then be aware of the following:

India is one of the largest Importer from China. Bilateral trade between India and China boomed to $71.45 billion in 2016-17 from $1.83 billion in 1999-2000, though most of this is skewed to Chinese exports

If you wish to import from China to India then Importer Exporter Code is also a necessity No matter while importing or exporting goods from China to India or vice versa.

Import certification, procedures, and formalities to import goods to India is almost the same in all countries worldwide. 

Related reading: Best export-import business opportunities for Indians.

Conclusion

The process of importing goods from China is much simpler than you think. Steps like looking for the right products, right suppliers, ordering, shipping, customs clearance, and receiving goods. Anyone can do.

But for optimization, it is not easy. And optimization is key to maximize the profits. As they say: “the devil is in the details” and with importing goods from China it is perfectly true.

There are many other details which can’t be described or teached in this article.

We in exportimportpractical.com have created many online export-import training programs and course to help you become successful in importing from China.

You can register in our export-import online course to study and get direct guidance by our successful and active entrepreneurs in this business.