Q: Can you give an idea of your company's import volumes?

A: We imported US$7-10 million of goods in 2006.

Q: How would you describe your approach to importing from China?

A: For most shoes we work through our agent, for others we work with a trading company. I have been to most of the factories producing our footwear. We mainly deal with our agent who lives in China currently but has also lived on and off in the United States. We also deal with trading companies who represent the factories on our behalf much like an agent but we do not pay them an agent’s fee. Their profit is built into their price quote.

Q: When you find a new supplier -- for example, at a trade show -- how do you evaluate their reliability and trustworthiness?

A: We request samples and pricing first. If that looks good we may give them a small test order. We like to actually try and build a relationship by doing business in a small way before we expand any larger with this new supplier. We also check out their web site and try to get as much information about them as possible.

Q: Compared to sourcing domestically, what aspects of the buying process require the most additional attention when directly importing from China?

A: Making sure the product meets the correct specifications since we do a large safety shoe and boot program and have very rigid requirements for this type of footwear in Canada. Also, making sure the design aspects are correct and that the samples are made properly. On large orders we ask the factory to apply our customer’s barcodes or carton content labels to the boxes or master carton. This saves us a lot of time since it keeps the handling of the goods to a minimum. We also specify what we would like printed on the cartons.

Q: Have you run into any "hidden" issues that importers should look out for?

A: Yes, the importance of knowing and understanding the currency market. Suppliers in China will constantly use this reality when negotiating prices, and it can really make the difference in whether you are making money or losing money on an order. I can’t stress enough the importance of how currency fluctuations affect the bottom line. This issue seems to be more of an issue now that the U.S. dollar is losing ground against most world currencies.

Q: What are some effective ways you use to build rapport with your China suppliers?

A: Visiting suppliers is always a very good idea. Face-to-face contact is the best way to really move a program forward. What you lose through the language barriers you gain through body language. Spending time with suppliers getting to know them, their factories, and their way of doing business I feel is most important. Much of this is lost with today’s online way of communicating. Don’t get me wrong -- communicating via computers is essential, but nothing compares to the personal touch.

Q: How do you ensure the goods meet your quality standards?

A: My agent or trading company inspects the factory, materials, production and packaging right up to when the container is loaded.

Q: For new importers, would you recommend they initially work through an agent or trading company (for example, in Hong Kong) or buy directly from China suppliers?

A: I would suggest they work through an agent who they are paying a commission to inspect the goods before they leave and to inspect the factory that is making the goods. You really need someone who you can trust that speaks the language and will visit the factories to inspect production as it is happening. This is the most cost effective way to accomplish this. I have never dealt with a trading company from Hong Kong; all the trading companies I have dealt with have been from mainland China to date. A trading company would be a great place to start if you do not have an agent, providing you move slowly like I mentioned above.

Q: What goes into determining the cost of your goods?

A: I take the [quoted price] multiply it by the exchange rate to convert the number into my country's currency. Then I multiply this number by the duty rate for that particular item and add the shipping and brokerage cost. I then add the commissions and/or royalties at the end to get my final landed cost.

Q: How do you make payment and does your payment method differ for new suppliers and your established suppliers?

A: No, for our standard-sized orders, I usually open an L/C (letter of credit) for the suppliers, they most often prefer this way of payment. If the orders are small I will probably pay by wire transfer. An L/C is the preferred way of payment since it adds a level of protection to all the parties. Some suppliers do require a deposit to purchase materials and the balance by L/C. This is also common. And I would recommend buyers always demand a production sample or samples prior to shipping.

Q: Once the goods arrive in Canada, how do you handle customs clearance and domestic shipping or logistics?

A: Our freight forwarding company has offices in China and Canada and handles all the logistics of picking up our goods and moving them for us. They book the space on the ship, and closely monitor the shipment until it arrives in the port. They also try to make sure the goods make rail quickly once the ship arrives in port and that our goods are picked up once they arrive at the railyard so we don't have to pay storage at the railyard. We also use a customs broker who clears the goods before the ship arrives so we don't have to pay storage waiting for the goods to clear. They pay all the import taxes and duties and bill us for these charges and their services.

Q: How do you handle returns with your suppliers? And is there a difference between new and established suppliers?

A: Because of our QC people in China, we do not get many returns but it does happen occasionally. What we do when this happens is we send samples of the defect with an explanation to our agent and our agent negotiates a settlement for us. Usually we request free shoes with our next order or a discount on our next order. The factories are usually pretty good at handling claims if they are a fair, reputable factory and interested in doing business again. As long as you are fair with your request an amicable settlement can be negotiated.

Q: How do you safeguard your intellectual property, especially with new suppliers?

A: Again it comes down to the agent you are paying commission to find this out. Usually the factories that make certain items are in a certain areas of the country for example: sneakers are mostly made in the Jinjiang area [in Fujian province], safety boots mostly Dongguan [Guangdong province] or Tianjin. Now this is not to say other areas are not making these commodities but what you find is that this is the case more often than not. Therefore, if you have an agent that knows the country and travels to the factories quite regularly, they most likely will notice if your products are being copied, but it does happen. Often you will find products in the market that are not original. It would then be up to the intellectual property owner to trace its origins once they are on the market and being offered to the public. I also deal with many US-licensed products and import and distribute these products in Canada under license. It would then be up to the master licensee to make sure their intellectual property is protected at the factory level; however I do survey my marketplace continually for this kind of thing.

Q: Looking back at when you first started importing from China, is there anything where now think, “I really wish someone had told me that”?

A: Absolutely. When I first started importing, online portals did not exist and neither did the Internet. All we could do was meet prospective suppliers at trade shows and it was very limited in terms of making new contacts. There were fewer direct flights to China, fewer international-standard hotels, and the language barrier made things difficult. Quantities on products were higher which made it very difficult, relatively speaking, for small or medium-sized companies to source from China. Now, with online sourcing, travel and communication barriers no longer existing, plus the minimum pairage requirements being low, it has opened the doors for everyone to source products from China, not just the established importers. However, change is good as long as you are creative and have a good solid game plan. I wish someone had told me that sourcing overseas would become as common as it is today. Had I known, I would have entered the sourcing business back when I started.

Q: Any other important tips for those who are just getting started importing from China?

A: Always start slowly with a new supplier, evaluate their products and samples and the speed at which they answer you. Check out their website and if they are a member of an online portal such as Global Sources Online. I found a very good supplier through Global Sources who at one time saved my business when another supplier of mine fell through leaving a huge hole in one of my programs. Having used Global Sources and finding this supplier, I am still around today to talk about it, still doing a good healthy business with this supplier, and I am extremely satisfied with the quality of the products and level of service I am receiving. Due to the simplification of importing from China in this day and age, an established imported must find new, creative an innovative ways to add value to their customers' business if they have any hope of staying in business. This is the name of the game if you want to survive in today’s global marketplace.

Search Verified Suppliers on Global Sources Popular Searches:  China Perfume, China Packaging Machine, China VOIP, China Textile Machinery Global Sources - Comprehensive search results and verified suppliers

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Readers have left 8 comments.

 1. Untitled
Guest User, Unregistered

i don't know why i can't post comments

 Posted 2007-12-07 11:16:59

 2. Thank you
Smart China Sourcing, Unregistered

Thanks for visiting. Given that you successfully posted this message, it's not clear what problems you were experiencing. However, if you have difficulty again, please feel free to send an e-mail to: smartchinasourcing(at)globalsources.com.

 Posted 2007-12-07 22:21:14

 3. Untitled
Guest User, Unregistered

Risk is a challenge over the Internet, but you seem to think China is safe for business true?

 Posted 2008-01-23 15:08:12

 4. Untitled
Guest User, Unregistered

the article is informative and helpful to new importers like me.

 Posted 2008-01-24 04:48:29

 5. Untitled
Guest User, Unregistered

Good artcicle.Thank you!

 Posted 2008-02-22 19:47:14

 6. One Question
Guest User, Unregistered

Q:Could anyone tell me what China imports?i.e.(Buys from other countries)Wood,clothing etc.I'd like to know the major imports.

Please help,thank you

 Posted 2008-03-26 12:10:29

 7. Sys Admin
Mohamed S. S, Unregistered

That a good ideas for the starting, thank you.

 Posted 2008-04-11 20:21:03

 8. VP Creative Development
Lauren Adams, Unregistered

Being based in the US,how do you suggest we find a good agent in China?

 Posted 2008-08-29 12:05:10

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