Importing From China – Advantages and Pitfalls

The main advantage for anyone planning to import from China is that pricing is extremely competitive and you are likely to achieve far greater profit margins than would be the case if you were dealing with a USA supplier. However, negotiating prices with any potential suppliers is not something you will have to undertake yourself, as any import or export agent worth their salt will take care of this for you. If you want to import from China but are new to the business of direct importing, it is generally advisable to start cautiously with a limited range of goods, as order quantities are generally higher than those from suppliers based in the USA. In fact, some Chinese companies will not consider shipping quantities smaller than a container load. However, the majority of Far Eastern operations will ship out lesser quantities and this means that your order will be consolidated with other orders for the same destination.

It is important to remember that if you intend to import from China, first learn how to import from China, the logistics can be somewhat complex, especially when compared to doing business with a USA based supplier. One thing to bear in mind is the lead time – not only the time taken between ordering and despatch, but also the time taken between despatch of the order and its arrival in the USA. Lead time is affected by quantity, specifically when dealing directly with a manufacturer, rather than through an export agent. This is because manufacturers make to order; in other words, they do not carry stocks of finished goods. They also work on the premise of “first come, first served”, as they will have an order book and previous orders will have to be finished before they can start work on fulfilling your order. If you plan to import from China for Christmas or some other seasonal event, it is essential to allow as much time as possible for production. Imagine the disaster of receiving your order for ten thousand artificial Christmas trees in mid-January!

Importing from China and the Far East can be a very lucrative business, as long as you do your research and use a reputable import/export agent. Importing “blind” over the Internet can be asking for trouble, especially if a cash advance is called for. Also watch out for hijacked email accounts, using free email addresses. Payment by letter of credit is standard when it comes to importing from China and so cash demanded in advance (unless this is in payment of samples) should automatically set alarm bells ringing. A letter of credit is not perfect; for example, an exporter could fill up boxes with paper and you might not realise the goods are not there until after your bank has honoured the letter of credit. However, most scammers do not go to such lengths to hoodwink suppliers in this way, as the paper trail left by this method could be traced by the authorities. Trade fairs or personal recommendations are generally the safest way to establish contacts and validate the credentials of a supplier.

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