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Beginner's guide to importing from China

The bottom line

As a small business owner, it all comes down to the bottom line. Depending where you are on the path to entrepreneurial success, that bottom line probably means your own personal bank account.

So when it's time for that next step in your business plan—importing goods from China—you want to make sure that the first-timer learning curve is as shallow as possible. The fewer "learn from experience" mistakes you make, the more dollars you'll have to buoy your burgeoning business.

Where to start?

Right here.


Beginner's Guide to Importing from China

How to start importing from China

 

Step 1: Determine your product

This will be the easiest part of the whole importation process for the sole reason that you already know what you want.

To import a product from China, though, you really need to know what you want. That means you need to know the exact number of your product and create extremely detailed specifications.

 

Beginner's Guide to Importing from China
Sample tech spec from maritime-suppliers.com

 

Your tech specs, be it for hydraulic lifts or teddy bears, should always at least include:

  • Terminology, definitions and abbreviations
  • Test methods
  • Material requirements
  • Testing requirements
  • Drawings or illustrations
  • Quality control requirements
  • Workmanship
  • Certifications
  • Copyright information

These specifications will determine how your product is manufactured overseas—make sure they are complete and leave no question unanswered.

 

Step two: Find a Chinese manufacturer

This will probably be the most difficult part of the whole process, especially to a newcomer, for three reasons.

  1. China is huge. And there are a lot of manufacturing agencies to choose from.
  2. Getting a guarantee on performance, costs, and efficiency over the phone or internet makes you feel squirrely. The idea of losing money on things out of your control terrifies you.
  3. With hugely cheaper costs come less management; less management means less regulations. Not knowing exactly what the manufacturing process is like makes your nervous.

Oh—and you don't speak any of the Chinese dialects. That's #4.

 

Research

There are several services that will help guide you to your meant-to-be manufacturer, from something as simple as a Google search like "Chinese manufacturer + women's shoes" to drawing from Global Sources' comprehensive directory of verified Chinese suppliers.

 

What to look for:

  • A manufacturer who fulfills your expectations—big corporation vs. small family-owned factory, for example, or a 3rd party supplier with in-house product development capabilities.
  • A factory with a good reputation
  • One that seems to operate in your budget

 

Other things that might be important to you:

  • Does the manufacturer have a website in English?
  • Is there a clear way to contact the manufacturer?

 

Contact

If you find your top potential Chinese manufacturers through a directory like Global Sources, often their representatives will help you get in touch with the factories to start the proposal and negotiation processes.

If you're working rogue, you get to contact your potential manufacturer the old-fashioned way: by picking up a phone or by sending an email.

 

What to include in initial contact:

  • An introduction describing you and your company
  • Your proposed manufacturing plan, including your specifications and quantity

 

Wait

The responses to your manufacturing queries will start rolling in. See what they say.

If you still like what you read, request a product sample from each manufacturer, along with his/her pricing and payment terms.

 

Decide

REJECT any manufacturers that require full payment up front or before you are 100% satisfied with your order.

NARROW DOWN the rest of your candidates based on quality of their sample, as well as a budget and payment plan that works well for you.

RESEARCH what companies have said about your top picks. Ask for testimonials and follow up on them. See what other business owners are saying online. Ask the manufacturer their business history, the trade shows they've attended, and other companies they manufacture for. Follow up on as many of these responses as possible.

SELECT the manufacturer you want to work with.

 

Step three: Organize your end

The physical movement of your product from China to your hands takes coordination and a lot of know-how. Start early.

Helpful Import/Export Resources

Importing to the United States: a 200-page guide for commercial importers, covering everything from entry process to assessment of duty to special requirements.

Basic Importing and Exporting: the CBP's trade website focused on tips, information, legal advice and requirements for the new importer/exporter.
  1. Contact your local international trade association and customs office. This is as simple as running a search "your city + international trade association" and "your city + customs office."

    Research and familiarize yourself with the United States Customs and Border Protection (CPB) policies and procedures before you start importing your product.
  2. Choose your port of entry.

  3. Beginner's Guide to Importing from China

  4. Contact your port and speak with a CBP import specialist in your product. They will be able to provide classification advice, requirements specific to your import, duty rates, and answer your questions about entry filing.
    1. Determine if other government agencies (USDA, FDA, DOT, ATF, etc) require any documentation, licenses or paperwork
    2. Fill out that paperwork
  5. If interested, employ the services of a customs broker available through your port of entry. They are experts in all things importing and will be able to walk you through it step by step.
    1. If granted the power of attorney, your customs broker can also act on your behalf when your goods arrive in the county

 

Things you need to know before you contact a port:

  • Your manufacturer
  • Materials in your product
  • Intended use for your product
  • Pricing/payment plan between you and your manufacturer

 

Step three (the other part): Build a relationship with your manufacturer

There are plenty of horror stories from small business owners who started importing from China: the end product was totally different from the sample, hidden costs, massive delays, unethical labor, something lost in translation.

Working with a new Chinese manufacturer is never a guarantee, but the process will be more successful if you work toward a long-term, lasting marriage rather than a one-night-stand inspired relationship. Strive to be a stable, reliable partner to your manufacturer.

 

How to be a bad buyer:

  • Constantly try to bargain for a better deal
  • Struggle with consistent payments
  • Buy only in very low volumes
  • Be overly strict and demanding, or too vague or too accommodating

 

Step four: Place your trial order

Your trial order is the first big step in your buyer/manufacturer marriage. If all goes well, your relationship will remain steadfast and honest throughout its duration.

Your trial purchase order should be as specific as possible, including:

  • Detailed description of products
  • Product requirements
  • Packaging requirements
  • Trade terms
  • All needed shipping documents

 

Step five: Visit China

That's right: pack up and go on a work-vacation to China. The best way to ensure that you are working with a supplier you like and that your final product is exactly what you are looking for is to go there yourself.

This can be intimidating—especially if you've never worked with a foreign manufacturer—but the experience has the huge potential of being interesting, informative and even fun.

Seeing the manufacturing facility will confirm:

  • That the factory is complying with Chinese Labor Laws
  • That your technical standards and quality management requirements are being met
  • That the production is taking place entirely under one roof, and not being subcontracted out to other factories
  • That you like and trust your contact and his or her staff

 

Beginner's Guide to Importing from China
By Robert Scoble [CC-BY-2.0 (www.creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

 

Note: Many veterans in the import industry suggest that a physical presence in your manufacturing facility for each production run is best practice.

 

If visiting China is not an option

The inspection industry is booming in China because, let's face it, the average small business owner might not be able to afford multiple transcontinental trips in a year.

Choosing the appropriate inspector will be a similar process to finding your manufacturer: research, negotiations, and concise communication of expectations.

Helpful Chinese Inspection Resources

Use this list of certified Chinese inspection services to find the right one for your business.

Your inspector should also pass a similar set of criteria as your manufacturer:

  • Strong reputation
  • Reliable references and testimonials
  • Commitment to you and your product

The inspector or team of inspectors will visit the manufacturing facility a few days before your product is supposed to be shipped and confirm that your goods are what you agreed upon.

You can see why it is generally more successful if you are the one doing the inspecting, not a service.

 

Step six: Welcome your shipment

If you did step three well, everything should be in place for your goods to arrive. Coordinate with your customs broker, if you have one.

 

Step seven: Pay your manufacturer

If you're satisfied with your product, complete the rest of your payment plan per your contract with your manufacturer.

Satisfied with the service and the end result? Continue to build up your manufacturer/buyer marriage with repeat orders in the future.





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