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Questions on starting a business importing E-cigarettes

by Mike Bellamy

ERIC: Hello Mike. My Name is Eric I’m 19 years old from USA, I
recently made my way to Australia to begin my travels as well as open my eyes
to different markets of trade. I have been importing small orders to
supply a few local stores for the last few years and figured I would make my
way to Shenzhen in a few months to get a more in depth idea for importing
new products in a more cost effective way. I had recently watched your video
on small suppliers and was a little discouraged about being able to meet
with factories and purchase small orders directly from them. I would really
like to visit factories and buy small, on the spot, with cash and send them home
to my sales girl while I’m in SZ. After talking to a few manufacturers I
currently use they made it seem like I was welcome to visit their factories as
well as purchase directly. I would love your professional opinion on what
direction I should be heading in, to get the most out of my trip. I’m also
planning to attend the HK expo in April which looks like a good opportunity
to meet reliable manufacturers and learn more about direct international
trade. Talk to you soon thanks for your time.

MIKE:  Thanks for your email. BTW, which video did you watch? Please send me the
link, so I know which one you were watching. Also, what types of products
are you buying and what volumes? With that info, I will try my best to get
you pointed in right direction.

I would like to clarify a key point. Yes, I believe it is not in your best
interest to try to go “factory direct” if you are a small buyer. But you can
still go “China direct”. These are two different things.

For example, dealing with wholesalers or even retailers on the ground in China may allow you to get decent price and quality, IF you are careful.

I think it can’t hurt to check out a trade show, but to manage your
expectations, most trade show exhibitors are factories and if your order
size is too small, they may not be interested. So if you have limited time,
you may want to focus on wholesalers and wholesale districts. But you are in
shark infested waters with both of them (example:
http://chinasourcinginfo.org/2011/08/22/genuine… ) so
be careful!

I made a video explaining strategies for “factory direct” vs. “China direct”
for small buyers. It should be online shortly.

In the meantime, here is a blog post about a typical wholesale market (Yiwu)
http://chinasourcinginfo.org/2011/06/04/lessons…

ERIC: Thank you for the quick response. Here is the link to the video.

http://chinasourcinginfo.org/2012/07/02/how-to-source-from-china-part-3/

Mike:  That video covers 80% of what will be in the new video, so you’ve got the key points already. But if you register for the RSS feed at CSIC, you’ll get a notice when the new video is added. Thanks for watching.

ERIC: At the moment I mostly bring in smoking accessories and electronic cigarettes purchasing anywhere between 10 and 200 at a time depending on the product. I typically purchase smaller items that are very simplistic with little room for a product to be defective. I had not looked into China direct and I think this would be a great area to focus my travels on being new to the game. Yiwu seems to be a key place when it comes to these markets. What is your opinion on making my way to Yiwu for the time being? It seems to be an extremely popular place for smaller buyers based on the research I’ve done.

MIKE: Do a key word search under “Yiwu” at www.ChinaSourcingInfo.org and you’ll get some videos and blog post about doing business in Yiwu and at the wholesale level in China.

ERIC: The biggest expense on most of my products seems to be shipping. In some cases it can cost me just as much to ship a product as it costs me to purchase it. Do you have any good resources regarding shipping? Whether it’s air or sea freight I believe my margins for profit will be higher once I bring my shipping cost down as well as send higher volumes of product home.

MIKE:  There is no getting around shipping, but you can certainly save money by finding the right partner to arrange the logistics. Here are two blog posts to explain the process: Making use of 3PL Service ProvidersQualifying 3rd Party Logistics (3PLs)

ERIC:  I look forward to checking out your ”factory direct vs. China direct” video, All of your resources have been a lot of help. I appreciate you taking time out of your busy schedule to get me on the right track as it has been much help and saved me a lot of wasted time.


Question answered by Mike Bellamy, an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center. Mike is also the author of "The Essential Reference Guide to China Sourcing" and founder of PassageMaker Sourcing Solutions.

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