March 3, 2018

Import from China – Exactly How we made 100K $ profit (CASE STUDY)

Do you want to learn (based on real-life examples) how to import from China or any other country?

Or you want to study how to start successful import-export business, based on real case study?

If so, then you discover soon, that there are few, real examples of successful import-export entrepreneurs. A lot of people who write about starting and growing the export-import business aren’t really experienced by themselves.

Many people online, like to teach and show how to start an export-import business. Lot of them haven’t been executing practically any export-import transactions. Some of them executed only small-scale transactions.

Well… this article is different. This is a case study of importing from China. We show you step by step, how one big-scale and very profitable export-import transaction had been executed. Between Europe and Asia from start to finish.

We show you exactly, how we made more than 100,000 US$ of pure profit with about 7 months trough importing from China.

In this article, we will show you how one, huge export import project has been taken place in our own export-import business journey in 2014-2015. So, this is a case study by one of successful import export entrepreneurs.

We will show you, how all has been taken place, step-by-step from start to end. You can see the different phases of the export-import project. You see, what problems we faced, how we solved the problems, what import-export risks we had and how we managed the risks.

Also, we talk about real $ numbers regarding this import-export project. We also explain, what we learned and what we would do differently. If we need to do a similar import export business again.

Hope, you find this article practical, educational and motivational. We hope this inspires you to take real action too. This importing from China case study shows you is the import-export business worthy to start or not. (Of course, it is worthy)!

Here is, what we are going to cover in this article:

1. How we found the buyer – the background story of this successful import-export business deal.
2. Setting preconditions for confirming this import-export business opportunity.
3. Selecting the right country for finding genuine suppliers
4. Finding punch of potential suppliers online and analyzing them
5. Visiting and analyzing suppliers in China and deciding the right supplier
6. import-export business Financial calculations. Profit, costs and making an offer to the buyer, signing a sales-purchase contract with the buyer and receiving first initial payment.
7. Final Negotiations with a supplier, contracting and starting this import-export business ( Making first payment to the supplier)
8. Executing this import-export business project, inspections, preparing for the sea freight.(Final payment to the supplier)
9. Goods arrive to the final destination (finishing the import-export business project)
10. Conclusions and what to learn from this case study

Let this case study of the successful export-import transaction, pushes you forward to start or grow your export-import business!

This is just one example, of what is possible in export-import business nowadays

Attention new entrepreneur! Learn, how you can make money in import export business nowadays, enroll our 100% FREE mini-course below:

This is a long article, so let’s start!

1.The background story & how we got into this export-import business opportunity?

It was 2014, one company from Europe, which was dealing with vegetable oil processing. They needed a new production Unit (production line). Their goal was to increase their production capacity.

The company had crude vegetable oil processing factory in Eastern Europe. They produce refined rapeseed oil and its by-products and animal feed.

At that time, they were looking for the good and reasonable-priced supplier from Europe or USA. They looked suppliers which could offer to them the kind of custom-made technical solution what they needed.

They got many offers from different companies in Europe and USA. All offers they got were too expensive for them. They spend months looking best possible supplier.

The lowest offer they got from Slovakia, was about 430 000 euros (roughly about 475,000 USD) + Installation, workers training costs. All the other offers they got, where more than half million of Euros.

NB! If you would like to get new business ideas or discover new import-export business opportunities, then check out our articles. Highly profitable import-export business ideas, import-export business opportunities for Indians.

How we reached to that company (buyer)?

The information came to us through the network. We have a wide network, we share business opportunities, leads, information. I remember one lunch with one of my entrepreneurial friends. we had a normal discussion. We talked about different topics and as usual, we started to talk about business as well.

He casually mentioned, that one company is planning to scale up its production capabilities in another country. He was hoping to become its new supplier of the Crude rapeseed oil. My friend has very good connections in Ukraine in rapeseed oil industry. He knows lots of crude oil producers there.

Also, he said that this company owner is still looking supplier/manufacturer for the new equipment, to upgrade the production capacity. My friend was waiting once that company’s new production unit has been set up, so he can start a business discussion about rapeseed oil supply to them.

So, this made me curious, as I am familiar with vegetable oil and its related products processing technologies and equipment. I had been outsourcing such things previously to other European companies as well.

I asked my partner to give me the name of the company and their contacts.

After I got the information about the company, I contacted them. I meet them, introduced myself, showed some references of mine. That manager saw, that I have great connections and experiences in a similar field. The manager also liked that I had lots of practical experiences in Asia and internationally.

Our biggest advantage was that we have been helping similar companies before with sourcing custom-made equipment from Asia.

The manager was interested in my offer.

I offered, that I would source the suitable manufacturer and help them to get the kind of equipment they need and manage everything for them. Project planning, manufacturing the equipment, inspection, importing from China, delivery, European customs, paper-work, installation, workers training etc.

Of course, I also offered, that I would save their money and would organize all with total costs, remarkably lower. Lower than their current best offer was (475,000 USD).

Basically offered a full solution: I would organize all from finding the right supplier to final installation and workers training at his site.

Finally, they also confessed that they don’t have experience with sourcing equipment. They also thought about importing from China, but they afraid that either they screw up something by themselves or they get scammed.

So, they were very happy, that someone experienced, can take that heavy-load away from their shoulder and they can do, what they do best – process rapeseed oil.

Note for new importers and exporters. In this case, we were lucky, that we found that buyer by chance. But this is not random, mostly you need to do serious work to find reliable buyers.

Shortly about the equipment what buyer needed

They needed the plant ( full solution) for treating/processing the low-quality crude rapeseed oil.As well other edible oils and crude glycerol. The glycerol is the by-product of biodiesel production. The company needed a plant with processing capacity 10-15 tons of raw material per day. All needed to be fully automatic ( 100% – controlled by a computer program).

Also, strict requirements for the technical solution has been stated. They gave to us detailed specifications of the quality of the raw materials. Secondly, they showed specifications of the finished ( processed) material. Also energy, reagents, water consumptions, efficiency – all where stated strictly. Even the factory area where the plant needed to be installed were determined and limited to its total square meters and heights.

Moreover, the full solution needed to be certified accordingly to the European Union requirements – this was the hardest requirement for me. I afraid at that time, that it is hard to find Manufacturer from Asia who could have all those certifications (later came clear, that this is no problem at all).

Below is a layout drawing of the technical solution from a Slovakian company.

NB, If you are not a techie, then just ignore that drawing and read on.

Even project promised to be complex, I decided to take that challenge.We took it because I had been importing similar equipment before and I like challenges. I was mostly scared of the complexity and scale of the project because I didn’t have experience with so big scale project before. I scared that I face problems, what I cant predict, I was also quite young.

2.Preconditions for confirming the import-export business opportunity

Before, we could officially sign the contracts for this export-import business project, serious pre-work needed to be concluded by us first.

This was all with our own costs and initial. Means, In case, we finally decide, after initial research, that we won’t continue with this project. Then all the costs made by us were our own duty and European company wasn’t agree to cover those.

So, here was our first risk– there was a possibility, that we waste time and money for research only for making sure, that we cant start that export-import project. There is no way to reduce that risk. Best we can do and what we also did was to plan the research properly, to be as cost-effective as possible.

So, there was no other way.We needed to make sure and prove, we can meet the required preconditions before real business can start.

Luckily, all went well and we validated real, profitable export-import business opportunity to import from China. Into this we are diving soon!

Required preconditions (before we could start the business)

So, what we needed to make sure and prove before we could start this project?

Our initial agreement was easy. Firstly, we needed to work on our own and conclude initial research and make sure the two most important things before we could sign official contracts. All this, to identify and validate the import-export business opportunity.

We agreed, that we will first look around in Asia and determine is this overall possible, that we could find such a manufacturer which could manufacture the kind of solution they needed. The solution needs to meet all the criterias what they showed us previously. The solution needed to be equal to the one, for which they got an offer of 475,000 USD.
Secondly, we needed to make sure, that the total cost regarding to equipment sourcing: include manufacturing, delivery, custom, installation, training etc) + our costs and my profit should be remarkably cheaper.Compared with the other option what he got from Europe. At least 20% lower was the target.

Also important to note, there was no need to source a “copy” of that European plant. Most important was, that we find a supplier which can design and manufacture an equal technical solution.The technological solution itself was allowed be different.

Only, after 2 previous conditions are meet, then we could continue this export-import business project and sign contracts and start real business.

After previous two are met, then we would prepare and present the best business offer(s) what we have outsourced, to the European Factory.

Then, we could analyze together the offers, negotiate and plan the whole project. Finally, sign official agreements and the export-import business could start!

In theory, it may seem easy, but in practice, it takes a lot of work, what we will show you next!

3.Deciding the right country for looking suppliers

At that time, I was already experienced doing business with Chinese and Asians. For the technology what our customer needed, China seemed the best Country from where to source reasonable-priced suppliers. Chinese technology in the edible oil industry is quite developed.

China is Soya and rice country, producing and processing a lot of Soya, rice and other edible oils for export. We also considered South Korea, Malaysia, Japan but we realized, that the price level there was near to Europe.

Regarding other ASEAN countries like Vietnam, Thailand, Indonesia, Philippines we thought that the technology there is not enough advanced. So we made the decision to continue with China and source the manufactures and import from there.

After we got all the information about what our buyer needed, then we started looking suppliers.

we used the same offer ( which Included all the technical charts and process diagrammes, technical specifications, dimensions) what our buyer got from Slovakia. Based on that offer, we started finding suppliers from China. We were looking manufactures which could manufacture us a similar solution.

Focusing on the right province in China to find best suppliers

After we decided to source supplier from China, the next step was to make sure from Which provinces we should source the supplier.

China is huge country and different provinces and areas have its own strategical industries. Example, Guandong province is famous for the electronics industry. Most of the Chinese electronics come from Shenzhen to western countries.

For heavy industry and edible oil processing, one of the strategical provinces is Henan province. It is so because Henan province has fields with high yields. it is one of the greatest agricultural provinces for decades. Henan is also the birthplace of Chinese civilization with over 3,000 years of recorded history. Big amount of Chinese vegetables, meat and also edible oils come from this province. So, this is logical, that edible oil industry must be dominant and strategically-developed there. We started to source suppliers/manufacturers from this province.

Below you can see, where the Henan Province is located in the China map.

Suggestion for everyone who wishes to import or export something or source something. Always, at first, conclude search to make sure the right area from where you are going to import something specific. For every product, there is right place from where to source it.

Same with exporting, make sure the right target market.

4.Finding & analyzing reliable suppliers online

For all, who wish to import from China. In China, there are two types of suppliers. Some are only focusing on the domestic market, their products meet only local standards. Even prices of those types of suppliers are low, those products are not suitable for export to Europe.They don’t have necessary licenses and certifications neither the quality doesn’t stand critics.

And, then, there are companies which are focusing on exporting to overseas markets. Those companies have usually needed certifications. Most importantly they are providing products which have high quality and higher technology level. Also, those companies are more familiar with western standards and requirements.

Additionally, those companies have people which have good English ability. Communication is very important with such complex project. It is crucial that you have a partner which you don’t have communication problems.

Anyone wishing to import from China and looking Chinese buyers and suppliers which are focusing on the overseas markets, there really isn’t a better tool than Alibaba. But you also need to know, how to use that tool properly. Alibaba is a complex tool and if you don’t know how to use it properly, then you won’t find good partners from there.

We have import-export training programs, where we also show you, how to use Alibaba properly, to get maximum out of it. Check out our import-export programs.

For people who are looking to find great suppliers and buyers, then we have an article about how to find buyers. There we also explain how to use Alibaba, to get maximum out of it.

We started sourcing suppliers from Alibaba

I used filters to find as good suppliers as possible. Typed the name (search phrase) of the equipment we were looking for, into the Alibaba search. Because we were looking the supplier not products jet, then we preselected “suppliers”

Below you can see an example of how we use the Alibaba. Using important filters and parameters in order to find reliable suppliers from Alibaba.

Below are most important filters we used and reasons, why.

Select right target markets. As we were from Europe and the equipment need to meet the European standards. Then it is smart to select supplier which are focusing on European markets. On the left, you can see the “top 3 markets”.
Pre-select only “suppliers”, as a search target. It is because there are lot fewer suppliers than products. And we are only looking suppliers now.
Select only “gold suppliers“. Gold suppliers are companies which had been paid the Alibaba membership fee regularly every year. This shows that companies are more serious and sincere. Also, we prefer companies what has at least 5 years of gold memberships.

Previous filters are mandatory in order to find reliable suppliers from Alibaba. Additionally, sometimes we also use filters like annual turnover, trade insurance, management certifications. If we were looking the manufacturer at 2014, we didn’t really use those filters.

We made the first a list of potential suppliers, whom we are going to contact. Most of them were from the Henan province. Firstly we had about 15 companies selected from Alibaba. Selected the companies to our list based on the following.

I preferred companies what had a long time gold supplier history.Also professional English websites, and pictures of CE certifications and other certifications.

Additionally, we googled every company. We googled company name regarding with words like “Scam” and “fraud”. If the company had been cheating someone in the past, then very definitely there exist search results related to the company.

Taking first offers from suppliers.

With this kind of import-export business projects, the first offer is never the final offer. It is more like getting to know the suppliers and their professionalism and reaction time.

After having the first list of potential suppliers from Alibaba, then we started talking with those companies. We prepared a very detailed letter.

where we explained what product we are looking for and what are the requirements need to be met. We also provided technical schemes and diagrams what our buyer got before.Of course, we removed all the information about the company which originally prepared it for our buyer.
We also asked, have they been manufacturing and exporting similar technical solutions to western countries before. If so could they give us their references, so we can contact their previous customers?
Asked them to send us copies of all the certifications what they have
We asked them to give us first estimated price offer for the solution.
Also we asked them to send us their presentation, where they describe their company history, revenues, company structure, managing system etc.

The first goals in this stage were to explain as detailed as possible what we need. It is very important to make sure that supplier understands what exactly we need.

Secondly, we wanted to make sure who of those companies has necessary capabilities. As well previous experiences with our-needed solutions before and has been exporting to Europe or USA before. Thirdly to get the first approximate prices offer, to get understanding of the price scales.

We send letters to all prospects, we had preselected 15 companies to whom we sent the letters.

Results after 1 week.

we got replies from 12 companies, we didn’t get any feedback about the price and references jet. From out of 12, about 4 companies seemed do not understand exactly what we are looking for. Also, they didn’t have experience with the solution what we were looking for. So, we didn’t continue with those anymore.

From out of 8 companies, who understand what we need, 4 had been manufacturing and exporting similar equipment to somewhere to westerns countries before, other 4 only exported to other Asian countries before.

So, now we reached the important stage. We had actually companies who may be suitable for our import-export project.

Now, we only continued with those 4. We asked them to send to us their references from western countries for similar projects. Requested also pictures and video about their company workshop.- We wanted to be sure they have advanced machines of their own to be able to manufacture our the needed solution.

All of 4 sent us the required information and 2 already quoted an estimated price for us. The prices the quoted to us were in range 150 000-460 000 USD! At this moment I got very excited, almost seemed, that I have found great import business opportunity! But it was too early to make a conclusion.

Now, we reached to the final stage of online validation of the suppliers. After that, next step was to visit suppliers physically, but before that, we wanted to include the last online-inspection:

Last steps, before visiting suppliers:

We contacted with their references and asked about their experiences with the companies who sold the equipment to them.
We let our Chinese friend to also search for those companies in Chinese and call to them, pretend to be a client who wants to order similar thing. He was making sure they have capability and experiences with such technology before, also ask about company history. Basically, he was making sure that all that stated directly to us, they also tell same to other Chinese.

After the last two steps, we had preselected 3 suppliers from Henan province and one in its neighbor province.
One out of 4 seemed to be unprofessional, reference client from Germany had very negative feedback about them, so we decided do not risk.

Other three seemed quite equal for us. All of them were big and long-established companies who seemed to be very professional. Their references had good feedback about those companies. We also liked, that those companies reacted quickly, if we asked a question, then reply came fast. Our local Chinese friend also confirmed that those companies seem to be reliable and there isn’t anything suspicious.

Here we finished online validation of the suppliers and this import-export business opportunity. We had spent about 1 month to find those 3 final suppliers. Nextly, we needed to fly to China to meet all of them and inspect them also by ourself, in real life and ask final quotations and make a final decision. We also informed our buyer, about the progress and that import-export project seemed to be very real!

Note For people who wish to import and source something from another country.It is smart to have local friends there, who help you to source and inspect the local companies. Also, this is a business opportunity for you, if you are from developing country. A lot of foreigners need help to find sourcing agents in developing countries.

Note. We have a free course, where we show you exactly, how to import from China as an import-export agent and sourcing agent. and how you can make money as an import-export agent or sourcing agent. You can enroll below.

Enroll our 100% FREE mini-course below:

5. Visiting & analyzing suppliers in China (final decision)

We agreed our meetings in China with 3 selected companies. We made a plan and schedule our actions in China about in which order we visit companies. To go to China, we needed an invitation letter from a Chinese company. after I had Visa, I was ready to go.

Below, we will show you what we discovered during physical visiting of the companies. We show what we learned and how we made the final decision for one company whom we decided to start a business.

Visiting and validating Chinese supplier no.1

*In order to respect the privacy of people and companies, we won’t show companies and people full names.

Firstly, we visited Yilong company in Henan. This company I liked most because they had really good attitude and they reacted always quickly. Also, they seemed to be very flexible and their estimated price what they quoted to us was lowest

So, I wanted to see their capacity, I wanted to understand, why they were able to offer such a low price.

Below you can see me ( with blue t-shirt) with my Chinese friend in a pink shirt, still posted on their Alibaba site. We made a photo with these company managers, older gentlemen, who were really nice to us and showed his company to me.

It was the second half of 2014 If we visited their workshop and had a discussion. During the visit, it came clear to me, that their main scope of supply is all kinds of pyrolysis equipment and distillation equipment. With edible oils and biofuels, they had fewer experiences with. But this all was not so crucial to me.

The main reason, why we didn’t continue with this company was the fact, that they outsourced most of the details and equipment. Means if we order from them, then they mostly only design the solution.The actual manufacturing of the details and equipment will take place in some other company.

This was too risky for us, as we aren’t able to control and inspect all the small companies who manufacture the components to them. We afraid the quality problems and also because there are a lot of companies related to the manufacturing, then we really cant be sure about the delivery times as well.

Only, if we would order pyrolysis-equipment, then they would be able to manufacture everything by themselves, but not with our solution.

Even, they are a sincere and flexible company which offered very good price for us, we still didn’t choose them, because of the quality and delivery risk. Also, because their offer was cheap, we suspected, that they not pay enough attention to quality and use very cheap sub-contractor manufacturers.

We still asked them to prepare the final price offer for us with the technical chart and description.

Note for new importers. You can see, how important it is to visit suppliers in real life, in online we never could see those kinds of risks!

Visiting and validating Chinese supplier no.2

At the end of 2014, we also visited another company in Henan province. This company was very different compared the previous one. This company was huge, with huge workshops. We were impressed with this company and its scale.

I visited their workshops and meet their people. All were very professional and that company had advanced manufacturing machines, example robot-welders. This company was able to manufacture everything by themselves, just some special equipment and apparatus were outsourced from partners.

The company was half state-owned enterprise which explains why this company was such big scale and advanced. This company was also 85 years old. After meeting that company and its managers and engineers, I was quite sure, that this is the right one.

On their site, you can see the scale of that company. On the right is the office building and also guesthouse for customers. on the left ( not seen on their website) was the worker’s commodity and straight ahead are 2 main production workshops.

The manager of this company was also university lector, written many study-books about vegetable oil processing technologies.

With the company, I didn’t see any risks, all were identical and real. So, we had a discussion with their people ( engineers team and managers). They confirmed, that they can manufacture us the equipment we need and all certifications we need, they can provide.

We asked them to make the drawing of the technical solution what they think is best for us. Offcourse they needed to follow all our technical criterias.

Secondly, we also asked them to prepare us detailed price offer with all terms.

Price offer should include at least following data:

Total price and payment terms
Detailed information about their technical solutions (product). From layout design to technical parameters
Quality standards and what certifications they can meet
Producing time and timeline.
Delivery terms
Warranty terms
Terms of Installation and after-sales support in Europe

Of course, there were much more things you need to know but previous was the core.

Note. For delivery terms, we mean Incoterm clauses. Incoterms are pre-defined International delivery and purchasing terms. The states clearly the responsibilities for the buyer and seller regarding with delivery, packing, customs, shipping, and insurance.

Everyone who wants to import from China or start an export-import business needs to be well aware of the Incoterms- this is crucial!

So, we were quite sure, that we had found the right company, but we had one more waiting for us.

Note for new importers. If you are going to import something from China, then it is good idea to find and work with state-owned enterprise. Then you can be sure, that this kind of companies are not going to scam you with money. They are reliable companies and they pay extra attention to the imago in other countries.

Visiting and validating Chinese supplier no.3

Third Company 250 km away from the second one, but we still deiced to visit them. Shortly, that company was something between first and the second one.

Like the second one, this company focused on all stages of edible oil processing. From Cereals processing to crude oil refining to high-quality cooking oil. Their technology was advanced and they were able to produce most of the things by themselves.

Below is a screenshot of their website, this shows well of their scope of supply.

But with this company, we faced one serious problem immediately when we meet them on the local railway station. In this company, only one sales manager spoke English. The sales manager was young Chinese girl.

Always, when we needed to ask something from an engineer, or managers, then the sales manager needed to translate our question to Chinese. And then she needed to translate from Chinese to English again.

With these kinds of projects, mutual understanding is very important. Imagine, if sales manager translates to the engineers differently. Misunderstandings are very dangerous in such projects. With other companies, we didn’t have such problem.

Also, their previous price offer was the highest for us, compared other two.

We still asked their final offer together with their technical solution chart, but we already made the decision to the company no.2.

Notes for fresh importers/exporters. If you are choosing the partner, make sure that you choose the partner, whom you won’t face communication problems.

Now, we had finished visiting the companies and was time to take some time to analyze the results and prepare for next step.

Conclusions after visiting all suppliers.

Results we got were followings.

Company no.1.

Price offer: 150, 000 USD FOB China port. For batch type processing technology.

Manufacturing time: 8 months, from signing the contract and receiving first initial payment.

Positive: FLexible company, with good attitude and client-centric. Lowest offer for our needed the equipment.

Negative: They outsource most of the manufacturing which causes following risks for us: 1).We can really ensure the quality.2) We cant ensure the manufacturing and delivery times.

Company no.2

Price offer: 232, 120 USD FOB China port. For continuous processing technology.

Manufacturing time: 3-6 months, from signing the contract and receiving first initial payment.

Positive: Reliable and big scale state-owned company with about 100 years of experiences in the field. has all needed capabilities for us. Able to manufacture all of the things by themselves. Also, the offered solution was with a similar design like the European company offered.

Negative: Company seemed to be little bureaucratic and that’s why it is possible that company is not very flexible (which was actually true)

Company no.3.

Price offer we got 325, 000 USD FOB China port. For batch type processing technology.

Manufacturing time: 6 months, from signing the contract and receiving first initial payment.

Positive: Reliable and with enough experiences in the field. Manufacture most of the equipment by themselves.

Negative: Company had a lack of people with sufficient English skills, which makes communication complicated, which is dangerous for our project. Their price offer was highest and too expensive, especially because the offered technology was batch-type. Batch type is always less efficient than continuous and the accident risks are higher. Because reactions are taking place with a high volume of oil and reagents on time.

For all the suppliers, the installation and workers training cost were not included in the offer.

NB! Remember, the cheapest offer what European company got before from Slovakia was 430 000 Eur (about 475, 000 USD) + Installation, training!

The final decision for deciding our supplier

After considering all the 3 companies, comparing their offers, capabilities and their offered solutions, we decided to continue with the company no.2.

That solution, offered by Chinese factory was at least same good as the Slovakian company offered. The technology was at least same advanced and it has an even little bit extra capacity. With company no.2. we saw the lowest risks and we really liked that this company was halfly state-owned this added extra reliability.

NB! State-owned companies in China are not so flexible than private ones, but they have no lack of resources. Those companies really pay attention to their reputation to foreigners. So, it was a secure choice for us.

Now was time to pack the suitcases and fly back to Europe, to meet with buyer again and present the offers.

At this moment, I had spent about 5000 USD for traveling, inspections, accommodations in China+1 months of time. So If our buyer decides, he doesn’t want to continue with our offer, then all this wasted time and money were spent without any result.

6. Calculations & making an offer to the buyer, contracting (confirmation)

Back in Europe, our buyer was very excited about our offers, as I had been keeping him informed about our progress. So, I presented the solutions to a European company. Firstly we didn’t talk anything about the prices jet. We showed different technical solutions what different companies quoted for us. As I am also familiar with such technologies, then I also pointed out my notes and thoughts.

They analyzed and considered the solutions. I sent much extra information to them about the solutions what we can provide.

Finally, as I also expected, they told, that the only suitable solution about what they are interested, is from supplier no.2. Now, all was depending about the price offer.

Below is a table describing, how I calculated the estimated price for my buyer. (Of course, we didn’t show that table to a customer).

As you see, if compare offers from China VS Slovakia, then there was one major difference. With the Slovakian offer, the delivery cost was already included in the price and there is no customs duty inside Europe. But with Chinese, we also needed to take the sea-freight, customs duties and local transport costs into account.

Customs duty was 2% of the total cost of the equipment delivered to European border. Means total cost is a sum of the equipment+sea freight.

For sea freight, I asked offer from our favorite shipping company, DSV.

Additionally, I estimated, based on our previous experiences, that installation costs and workers training would be about 15-30% higher, compared with the European offer. This is directly related to the different cultures and thinking ways between Chinese and Europeans.

We also estimated our own costs, based on our previous experiences in China. I know well, how much cost of living are in China. At that time we estimated 10,000 USD for 6 months for accommodations in China. Including local transport and other costs.

We estimated, that within 6 months, we will finish this project in China. After that equipment is ready for shipment on the China port of Qingdao ( Actually we finished all much faster).

So, we calculated all and made estimations and comparisons based on what we made the final decisions about the price we offer to the buyer.

Based on the calculations, our solution could save to our customer about 97,000 USD (about 20%)!

Additionally, we could take care whole sourcing process. Means they can focus on their business during the sourcing and earn more profit during that time.

And we could make 100,000 USD pure profit from this import-export business deal!

Note for fresh importers and exporters. Always make financial calculations for every import-export business project, Consider all costs (include customs duties, sea/air freights, customs formalities etc) and incomes.

Making final-offer to the buyer

So, we made the final offer to our buyer. As we take care everything, then payments need to come directly to us and we could pay to Chinese.

we offered 421, 000 USD to the buyer ( which include everything, from start to finish)

As our price was remarkably cheaper and the solution was same good as he previously got, then we had successfully confirmed and proved the 2 important pre-requisitions stated earlier in this article. There was no reason to reject our offer.

Actually, there was one additional important factor what allowed us to enter into this import-export business. This factor was TRUST. The buyer already trusted us and saw, that we are sincere and experienced enough. Lack of trust is one major cause why foreign buyers don’t want buy.

Finally, buyer negotiated a little bit payment terms and the first initial agreement what we made was 350 000 euros (about 385, 000 USD). Payments where agreed done all in T/T. Total sum was divided into 3 separate payments, each carried out in the different stage of the project.

This sum we received totally, at the moment when equipment successfully reached to European custom, before Installation could start.

For the rest, about 36, 000 USD we agreed, that for this final payment, we sign second, separate contract in the end phase of the project. As buyer did not believe, that installation cost can be so high, as we estimated (which later on came true, and installation cost where about 10 000 USD lower).

So, basically our import-export deal was confirmed and our pure profit: 421, 000 USD – 321,022 USD = about 100,000 USD!

Screenshot from selling the contract with European buyer as follows:

*Note, as we respect the privacy of our partners whom we had been signing the contracts.We hide the exact names of the companies and persons and other sensitive data.

After signing the contract, we send our first invoice to the buyer and received first payment, of 55,160 Euros. Now there was no way back!

7. Contracting with the supplier & starting an import-export business

So, the deal was confirmed by European buyer and contract signed and there was no way back now.

Now, I flew back to China for a final discussion about the import-export project and signing the contract with Chinese. The final step to start that import-export project for what we have been doing so much work already.

There was no more discussion about the technical solution because my buyer confirmed it already. The only thing we wanted to negotiate, was about the payment terms and maybe negotiate lower the price for us.

It quickly came clear, that supplier does not agree to lower the price, as they told they are using the highest quality components when manufacturing our equipment. Also, as our project was very small for them, then they didn’t agree with a discount for this first project.

As for us, the quality and good relations with the supplier were very important, that’s why we agreed on the price, we planned to work with this supplier again in the future.

Chinese are always very polite and generous with foreign clients. They even used our national flag on the meeting table, we were very surprised and moved.

Most important was, that we could negotiate the payments accordance with our buyer. Means if supplier sends an invoice to us, then we can also get money from the supplier. luckily, we reached consensus on this, Chinese supplier agreed to ask payments from us on the same stages and in similar amounts, as we got money from our buyer.

So, payments to Chinese supplier agreed to Carried out in three stages (parts).

Initial payment, after signing the contract. This payment started the process.

Second payment in the middle of manufacturing and last one in the end, before shipment and after I have made the inspection.

It was quite a harsh period when we had negotiations with a supplier. It was especially hard to get all agreed terms and quality requirements into the contract. We had a lot of arguing about the wordings, I used a lot of help from one International lawyer at that time. So the contract always moves back and forth between us and Chinese. I also needed to discuss with our buyer to make sure all is accepted by him as well.

We spent approximately 7 days arguing about the contract before we were ready to sign it.

But finally, the contract was signed!.

Lesson learned.In the next time, we would definitely make sure the payment terms and timelines before signing the contract with the buyer. In this case, we didn’t do it and we took a serious risk, but luckily Chinese supplier agreed with our timeline. If Chinese supplier not agreed with this, then we needed to use our own money to make payments on time.

Also, need to be very patient and rational, when have negotiations and contracting with Chinese. It is smart to always take the time to consider.

Below is a photo of the scanned page of the contract with a Chinese supplier.

So, basically, the import-export business project was about to start, all was confirmed. Now we needed to move the money.

I was direct importer and exporter, but I used 100% buyers money, so I was actually an export–import agent.

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All payments were TT, If you have 100% trust, then TT payments are not an issue!

But still, I had an enormous amount of risk what I took on my shoulders. Just Imagine when the Chinese factory would turn out to be a scammer and never produce to me the ordered plant after receiving first initial payment…

So, to lower that kind of risk, the only way is to find really good suppliers from China.

Note for fresh importers. You better spend more time on visiting the suppliers advance and ensure, they are good companies before you decide to make business with them.

8.First payment & Execution of the export-import project

So, we got the first payment from our buyer earlier and we now immediately paid the first initial payment to Chinese. Now project officially started and Chinese supplier started manufacturing the equipment for us! Importing from China started now officially.

So, the project was now running, I stayed in China whole that period, about 4 months I extended my business visa many times – this was too important, so I needed to stay close to the factory.

We lived most of the time on that factory private guesthouse. I had my own room there and get every day good Chinese food had lunches and regular meetings with the managers of the company.

I needed to stay there, so I could easily inspect how our project manufacturing is going.

The CEO of that company was not the normal Chinese person – he belongs to the Henan provincial government, he was the member of Chinese Communist Party.

He has such an enormous power and money to use – the kind of power what people from Europe, USA can’t even imagine.

Below you can see a picture of me, my Chinese friend and that manager. I was quite fat there.

This import-export deal opened new opportunities to me and opened many doors for me in the future in China. I also learned more, how Chinese people are thinking and how to communicate with them more efficiently. Chinese thinking way is very different compared western thinking way, they think way further than we do, also they approach differently.

Supervision, inspections during the production.

So, I was keeping my eye on that project, even I finally trusted that company I still had regular visits to their production unit to see, how our project was going.

Because equipment needed to put together in Europe in our buyer workshop, then all equipment manufactured as pieces which can later easily packed into sea containers for shipping to Europe. In Europe, equipment installed together detail by detail.

Most we needed to keep our eye or the welding quality and making sure, all the details included based on the manufacturing list.

Below are one of the most important devices.The processing reactors, pictures taken in our Chinese supplier workshop. Reactors were well manufactured.

Thigs were well manufactured, all automatical and electronic devices were imported from South Korea (by the Chinese supplier). Chinese supplier told us, that they don’t trust Chinese automatic control devices enough, so they use Samsung.

Final inspection, final payment to supplier and delivery to the shipping port.

All went like it was planned ( with some small issues). After the equipment was produced, then was time to check and inspect everything and take photos, so we can show pictures to the buyer.

We made the final inspection and confirmed, that all was correct and nothing was missing.

Now equipment was ready for packing and delivery and for passing other export customs procedures in China.

Was the time to carry out the final payment to the supplier, but before that, we needed to get payment from our buyer. After presenting the photos and results to our buyer, the buyer carried out the final payment.

After we received payment, we carried out the last payment to the Chinese supplier. Chinese supplier gives us all the documents of the goods, like a proforma invoice, technical certifications, packing list, Certification of origin issues by Chinese authorities. all those we needed to successfully pass all import-export procedures in European custom.

Chinese sent 3x 40HQ containers of equipment, apparatus, and accessories to the Qingdao port. Our shipper (freight forwarder) took over all the goods and documents.

Now we waited for information from our shipper about the departure date and estimated time of Arrival to the European port.

So, finally, after about 3 months, all was finished in China.

Our hard work was done here and we needed to fly back to Europe. to visit our buyer and give him instructions about preparing for the time when equipment arrives at his workshop, so installation can go smoothly.

Btw, we were ahead of the schedule, we estimated 6 months, but actually, the manufacturing in China took just little more than 3 months.

9.Goods arrive to the final destination, final Installation (Finish)

After about 50 days of sea-freight, the goods arrived at the destination port. Because we planned all well and we knew exactly what docs custom need and what the import duties are. So all went very fast in Custom.

After goods arrived in custom in Europe, then we had the right for the final payment. After presenting all docs to the buyer, the buyer made the final payment and we got the equipment from custom and delivery to the final destination started.

Basically, my job as an import-export agent was done at this moment. Goods were successfully imported from China, now we just needed to help our buyer with communication with Chinese. This was nothing compared what we faced before.

We made another contract now with the buyer. Because the 36,000USD was still pending. We made an easy contract, which basically says, that I will get the payment which is equal to the installation and workers training costs, which I needed pay to the Chinese Supplier.

After containers arrived at the final destination, then the final stage of this import-export business project (installation period), started it took about 3 months. After 3 months, all was set up and running.

Below some pictures of the installation period.

Installation work went well because all was previously planned well. Installation is not business subject, so we won’t handle thin here.

I asked the extra fee for the buyer, I helped communicate with Chinese. Two Chinese engineers and some workers came to Europe for Installation guidance and for final programming work.

After all was done and the factory was set up, It was a huge release for us., It was a really complicated project, but profit was also “sweet”. About 100,000 USD of pure profit for about 7 months (include research period in China) of work is not bad.

Actually, we made more than 100,000 USD, because manufacturing period went a lot faster than we estimated.

So all ended happily, European company was happy, they got plant what meets their demand. And he got that with low price – this kind of price he never gets from Europe or USA.

My friend, who gave to me that idea, he could now start to supply rapeseed oil to this factory, so he was also happy:)

I was happy because I got a valuable lesson, I made a big profit and I get new great connections and new opportunities!

Here you can see our case study also listed on the Chinese supplier website. We also suggest that company to everyone who wishes to import something similar from China or Asia.

10. Conclusion & what to learn from our export-import business case study

So, what you can learn and implement from our case study?

Most importantly, this kind of, project-based import-export business is still possible today!

The success of this kind of import-export business depends about 80% of the prework (chapters 1-7) and 20% of the execution (8-9).

It is not easy, it is much more complicated than regularly exporting or importing same products over and over again. Example toys or furniture to another country. But if you are patient, willing to do the prework and plan properly, then you can make such a big money, that it can change your life!

There are two types of goods what you can import or export.

Commodities– like candles, toys, furniture, species, agri products, oil and other raw materials. Those goods are not personalized and you are facing big competitions. Usually, with such products, you have lower profit margin because all other entrepreneurs are exporting or importing same goods.
Custom made goods (like this case study)– Like this custom made oil processing equipment what is only manufactured for our buyer. This equipment was perfectly suitable only for him and we had low competition. That’s why we were able to get premium profit from this import-export business deal.

So, how you can do something similar?

First of all, don’t start with so big project, you can start with much smaller import-export projects at first.

Below are some suggestions for you:

Try to find big companies in your country which need to buy equipment, plants, production lines, machines. ( expensive ones)
If they have offers already from USA, Europe, then try to find a better offer based on that existing offer. You need to source supplier from low cost, developing countries.
Study very well the equipment/solution, what your buyer needs!
Finding and selecting the supplier is crucial – you better analyze and consider suppliers well, before you choose one!
Contracting is extremely important- negotiate, discuss the contract with a supplier, try to get as good terms as possible, take your time don’t rush.
Good relations with supplier and buyer are also very important, especially with Asian supplier. Good relations with Chinese suppliers are sometimes more valuable than a good contract!
Plan whole costs and the profit for the import-export business project, like we did.
Have a reliable friend in the country from where you are going to import something, so a friend can help you.

I Hope you got much Inspiration and some valuable new knowledge!

If you also want to make successful and similar deals like we did in import–export, then start with educating yourself!

We have import-export business training courses (100% practical). There we show you step by step, how to start your own successful import-export business. We have also mentoring service, you can check our import-export training programs.