More and more people want to import goods from China, but language barriers, complicated international trade procedures, scams or inferior products hinder them.
There are many organizations that teach you how to import from China and charge hundreds of dollars as tuition fees. However, most of them are just old school textbook guides, not suitable for current small businesses or e-commerce importers.
You will learn how to import from China step by step in this most practical guide. Even without any international trade experience, you can easily learn all the knowledge of the entire import process from selecting profitable products to arranging shipments.
This guide is divided into 11 sections according to different import stages.
- Identify if you are qualified to import from China.
- Learn what products are good to import from China.
- Verify if products are profitable & allowed to import to your country.
- Find Chinese suppliers online via Alibaba, DHgate, Aliexpress, Google, etc.
- Find Chinese suppliers via trade shows, wholesale markets, industrial clusters.
- Evaluate supplier’s background to ensure it’s trustworthy.
- Get product quotes based on trade terms (FOB, CIF, DDP, etc.)
- Choose the best supplier via price, sample, communication, service.
- Confirm payment terms before place the order.
- Choose best shipping solution according to time & cost preference.
- Handle custom clearance, deliver products to doorstep.
Step 1. Determine your business model before import from China.
Almost every new or experienced businessman will choose to import products from China to obtain higher profit margins. But the first thing you should consider is how much budget you should prepare to import from China. However, the budget will vary depending on your business model.
Agency sales only costs $100
You can build a website on Shopify for $29.99 and then invest some money in social media advertising.
Mature e-commerce sellers have a budget of more than $2,000
As your business matures, it is best not to buy from an affiliate because the cost is too high. The real manufacturer is your best choice. Generally, Chinese suppliers will set a minimum purchase order of USD 1,000 for daily products. In the end, it will usually cost you $2,000, including shipping.
$1,000-$10,000 + new products
For those products that do not require molds, such as clothes or shoes, you only need to prepare $1000-$2000 to customize the product according to your needs. But for some products, such as stainless steel cups and slow rebound memory foam pillows, manufacturers need to make specific molds to produce items. You need a budget of $5,000 or even $10,000.
$10,000-$20,000 + traditional wholesale/retail business
As a traditional offline merchant, you are currently buying products from local suppliers. But you can try to buy products from China to get more competitive prices. In addition, you don’t have to worry about China’s high MOQ standards. Generally speaking, depending on your business model, you can easily satisfy it.
Step 2: Know which products are suitable for import from China.
After analyzing the import budget you need, the next step is to choose the right products to import from China. Good products can bring you considerable profits.
If you are a new venture, here are some suggestions for your reference:
Don’t import popular products
Popular products like Fidget Spinners usually spread quickly. If you want to make money quickly by selling such products, you need to have strong market insights to seize opportunities. In addition, a complete distribution system and strong promotion capabilities are also required. But new importers often lack such capabilities. Therefore, this is not a wise choice for new businessmen.
Do not import low-value products that are in high demand.
A4 paper is a typical representative of this type of product. Many importers believe that it must be profitable to import from China. but it is not the truth. Since the shipping costs for such products will be high, people usually choose to import more units to reduce shipping costs, which in turn will bring you a large amount of inventory.
Try unique ordinary everyday items
In most developed countries, ordinary daily-use products are usually dominated by large retailers, and people usually buy such products directly from them. Therefore, such products are not suitable for new businessmen’s choice. But if you still want to sell ordinary products, you can try to adjust the product design to make it unique.
Try niche products
A niche market means that there are fewer competitors selling the same products as you. People will be more willing to spend more money to buy them, therefore, you will make more money.
Take the memory foam travel pillow as an example. Several of our customers have annual revenues exceeding US$300,000. But since 2018, the ROI (return on investment) of the product is too low to be worth selling anymore.
Step 3. Verify whether the product is restricted and profitable.
No matter what kind of products you want to import, the important step is to do enough research on the product cost in advance.
It is important to know the approximate unit price of the product in advance. Product prices on Alibaba can be used as a reference standard for grasping the price range.
Freight is also an important part of the overall product cost. For international express, if your package weighs more than 20 kg, the shipping cost for 1 kg is about $ 6-$ 7. The shipping cost of 1 m³ is $ 200- $ 300, including all costs, but usually the minimum load is 2cbm.
Taking knee pillows as an example, 500-1000 are needed to fill 2 cubic meters. Obviously, it is not a good product suitable for small businesses to import.
In addition to the above, there are some other costs, such as sample cost and import tariffs. So when you want to import from China, you’d better conduct a comprehensive research on the entire cost. Then you decide whether it is profitable to import from China.
Step 4: Find Chinese suppliers online through Alibaba, DHgate, AliExpress, Google, etc.
After choosing a product, all you need to do is to find a supplier. Here are 3 online channels to search for suppliers.
B2B trade website
If your order is less than $100, Aliexpress is the right choice for you. There are a variety of products and suppliers for you to choose from. If your order is between $100-$1000, you can consider DHagte. If you have enough budget to develop your long-term business, Alibaba is more suitable for you. Made in China and Global Sources are both wholesale websites like Alibaba, you can also try.
Search directly on Google
Google is a good channel for import from China. Last few years. More and more Chinese factories and trading companies build their own websites on Google.
You can also search for Chinese suppliers on some social media, such as Linkedin, Facebook, Quora, etc. Many Chinese suppliers want to be widely followed, so they often share their news, products and services through these social platforms. You can contact them to learn more about their services and products, and then decide whether to cooperate with them.
Step 5: Look for Chinese suppliers through exhibitions, wholesale markets, and industrial clusters.
Looking for suppliers at the exhibition
There are many types of China trade fairs every year. The Canton Fair is the first time I recommend it to everyone. It has the most variety of products. You can learn more about China exhibitions.
Visit the Chinese wholesale market
There are many wholesale markets for different products in China. Yiwu International Trade Market is the first market I recommend. It is divided into 5 zones. Each district has its own specific products for sale. There are many other wholesale markets.
Visit the industrial cluster
Many importers hope to find direct manufacturers from China. Therefore, industrial clusters are the right place to go. Industrial clusters are areas where manufacturers that produce the same type of products are more likely to be located, so that they can more easily share a common supply chain and hire workers with relevant production experience.
Step 6. Evaluate the supplier’s background to ensure it is trustworthy.
With so many suppliers to choose from, you must really want to know how to choose a reliable supplier. A good partner is an important factor for business success. Let me tell you some important factors that you should not ignore
Since it is easy for a supplier to register a company in China, if the supplier focuses on a certain product area for a relatively long time, for example, 5 or 10 years or more, its business will remain stable to a large extent.
Check which countries the supplier has exported to. For example, when you want to sell products in Europe and America, you will find suppliers who can provide you with competitive prices. But you understand that their main customer clusters are in developing countries, which is obviously not a good choice for you.
Whether the supplier has the relevant product certificate is also an important factor. Especially for some specific products, such as electronic products and toys. Many customs have strict requirements for importing these products. And some e-commerce platforms will also make some requirements for allowing you to sell on them.
Step 7. Get product quotes based on incoterms
(FOB, CIF, DDP, etc.)
When you negotiate with suppliers, you will come across the term Incoterms. There are many different trade terms, which will affect the offer accordingly. I will list the 5 most commonly used in actual business.
Under this clause, the supplier will quote you the original product price. They are not responsible for any transportation costs. That is, the buyer arranges to pick up the goods from the supplier’s warehouse. Therefore, if you do not have your own freight forwarder or you are a novice, this is not recommended.
In addition to the price of the product, FOB also includes the shipping cost of the vessel that transports the goods to the seaport or airport you specify. After that, the supplier is exempt from all risks of the goods, that is, FOB quotation = original product cost + freight from the supplier’s warehouse to the agreed port in China + export processing fee.
The supplier is responsible for delivering the goods to the port in your country/region, and then you need to arrange for the delivery of your goods from the port to your address. As for insurance, if your product is damaged in transit, it won’t help. It will help only when the entire shipment is lost. That is, CIF quotation = original product cost + transportation cost from the supplier’s warehouse to the port of your country/region + insurance + export processing fee.
Step 8. Select the best supplier through price, samples, communication, and service.
After evaluating the supplier’s background, there are five other basic factors that will determine which supplier you will eventually work with.
Too low prices may accompany traps
Although price is a key aspect that you should consider when choosing a supplier, you may face the risk of buying inferior products. Maybe the production quality is not as good as other products, such as thinner materials and smaller actual product size.
Obtain samples to evaluate mass production quality
All suppliers promise that the quality of their products will be very good, and you can’t just trust them. You should ask for samples on hand to evaluate whether they can produce products according to your requirements, or whether their existing products are exactly what you want.
If you repeat your requirements over and over again, but your supplier still does not produce products in accordance with your requirements. You must spend a huge amount of effort arguing with them to copy the product or refund. Especially when you encounter a Chinese supplier who is not fluent in English. That will make you crazier.
Good communication should have two characteristics,
- Always understand your needs.
- Professional enough in his industry.
Compare delivery time
Delivery time refers to the time required to produce and prepare all products for shipment after you place an order. If you have multiple supplier options and their prices are similar, then it is best to choose the one with a shorter delivery time.
Consider transportation solutions and transportation costs
If you don’t have a trusted freight forwarder, and you prefer suppliers to help you handle logistics, then you have to compare not only product prices, but also logistics costs and solutions.
Step 9. Confirm the payment terms before placing the order.
Before reaching an agreement with your supplier, you should pay attention to many important details.
- proforma invoice
- Confidentiality agreement
- Delivery time and delivery time
- Solutions for defective products.
- Payment terms and methods
The most important one is payment. The correct payment deadline can help you maintain a continuous cash flow. Let’s take a look at international payments and terms.
4 Common payment methods
- wire transfer
- Western Union
- Letter of Credit (L/C)
4 Common payment terms
- 30% deposit before export, 70% balance.
- 30% deposit, 70% of the bill of lading balance.
- No deposit, full balance and bill of lading.
- O/A payment.
Chinese suppliers usually adopt such payment terms: a 30% deposit is paid before manufacturing, and a 70% balance is paid before shipment from China. But it differs for different suppliers and industries. For example, for steel products and other products with low profit but high value, in order to obtain more orders, the supplier can accept 30% deposit and 70% of the balance before arrival.
Step 10. Choose the best transportation solution based on time and cost preferences.
After the production is completed, the next important step of how to ship the product from China to you, there are 6 common shipping methods:
- Ocean freight
- air transport
- Rail freight loaded with containers
- E-commerce by sea/air and express
- Direct economic transportation (less than 2 kg)
Express delivery below 500 kg
If the volume is less than 500kg, you can choose express delivery, which is a service provided by major companies such as DHL, UPS, FedEx, and TNT. It only takes 3-7 days from China to the United States by express, and the speed is very fast. Shipping costs vary depending on the destination. Shipping costs from China to North America and Western Europe are usually US$6-7 per kilogram. Shipping to Asian countries is cheaper, while shipping to other regions is more expensive.
Air freight over 500 kg
In this case, you should choose air freight instead of express. You need to provide relevant compliance certificates during the customs clearance process in the destination country. Although slightly more complicated than express delivery, air freight will save more than express delivery. That’s because the calculated weight of air freight is about 20% less than that of air freight. For the same volume, the volume weight formula for air transportation is length×width×height, divided by 6000, while express is 5000. Therefore, if you are shipping a large-size but light-weight product, sending it by air will be about 34% cheaper.
Sea freight of more than 2 cubic meters
Shipping is a good choice for these cargo volumes. Shipping to areas near the west coast of the United States is about US$100-200/m3, shipping to areas near the east coast of the United States is about US$200-300/m3, and shipping to the center of the United States is more than US$300/m3. Generally speaking, the total freight of sea freight is about 85% lower than that of air freight. In international trade, with the increasing diversification of demand for transportation methods, in addition to the above three methods, there are three other commonly used transportation methods. Please check my complete guide for more detailed information.
Step 11. Go through customs clearance and deliver to your door.
The last important step is customs clearance. You should know what documents or certificates are needed in this process.
In the process of China’s export customs clearance, various products need the following documents:
- commercial invoice
- packing list
- Bill of lading
- Certificate of Origin
Of course, according to the different supervision requirements of the customs on products, additional certificates are required. But for the export process, you don’t have to worry too much. Usually, the supplier will help you solve the problem.
In the process of import customs clearance in your country, some standards or documents are also formulated in accordance with the requirements of your country’s customs. But as with the export process, five documents are required, including commercial invoices, contracts, packing lists, bills of lading, and certificates of origin. But some other certificates vary by country or product. You can consult a freight forwarder who can help you with logistics.
In addition to the certificate, you also need to pay customs duties. However, the standards vary by country or product. For example, importing pillows from China to the United States requires tariffs, MPF (commodity processing fees), and HMF (port maintenance fees).
You can consult the freight forwarder or your customs broker for the required documents and product tax rates.
To sum up
I hope you can benefit a lot from my guide. I will keep it updated. I am a leading manufacturer of memory foam products in China. If you have any questions about import from China, please feel free to contact us, we are always here.