For many companies across the globe, whether small or big, China is the preferred third-party manufacturing destination. From hairpins to electronics, as a buyer, you can import practically anything from China. In fact, this country is perhaps the largest manufacturing economy and exporter of goods in the world. In 2019, China had a manufacturing output of $3,896.35 billion, making up for 27.17% of its GDP.
However, importing goods from China is easier said than done, especially if you are doing it for the first time. As a first-time buyer, you may find the process daunting and complicated at times. But, armed with the right information and knowledge, you should be able to successfully import goods from China.
Here are five tips that’ll help you to start buying goods from China without any hassle.
1. Know the Specific Rules and Regulations
One of the first things you will need to do is to learn as much as possible about the relevant rules and regulations. Different products may have to undergo specific tests, require special permissions for export from China, import in your country, and international regulations, among others.
For example, if you are importing the goods into the European Union, depending on the type of product, you may have to adhere to stricter quality controls and regulations. Cosmetic products, for instance, may have to undergo various quality tests before they are allowed to be imported in your country.
This also means that you will need to find a manufacturer capable of adhering to the given product quality standards and has the required qualifications. Make sure to do in-depth research on the product you want to import from China, starting with your country’s customs department.
2. Make Sure the Product Isn’t on Prohibited List
While some products may be perfectly legal in China, importing them to your country might be illegal. As a buyer or an importer, you are solely responsible for bringing the product into your country.
As a result, if you import a product that is on the prohibited products list, you and your business will have to face serious legal consequences. So, make sure the product you intend to import from China is not on your country’s prohibited goods list.
Also, importing goods that do not meet the regulations or quality and hygiene standards can also have impending legal consequences. You may have to pay huge fines or the authorities may even pull the plug on your business permanently. Be sure to take all these factors into account before you start importing.
3. Always Work with Reliable Suppliers
As the quality and adherence to your country’s and international regulations are extremely crucial when buying goods from China, you must work with a reliable supplier. Usually, most buyers want to work with the cheapest supplier they can find.
However, cheaper costs often result in poor quality products. In some cases, a bad supplier may even provide you with false quality certifications. As a result, customs may hold your goods or even restrict them from getting into the country forever. The financial loss and added logistical costs, in this case, could bankrupt your business.
To avoid this, you need to look for a reliable and experienced supplier in your niche. One way to ensure that is to hire a competent and experienced sourcing agent, especially if you are importing goods from China for the first time. Alternatively, you can shortlist a few suppliers yourself and check them out thoroughly before zeroing in on a final name.
4. Ensure to Write a Watertight Contract
Once you have finalized a supplier, you will need to focus on creating and signing a watertight contract. The sales contract should have all product specifications. Make sure not to leave anything out, not even a seemingly trivial detail. Remember, if it is not in the contract, you can’t ask the supplier to deliver it.
Layout your payment terms and conditions very carefully and in detail. In most cases, buyers have to pay 20%-30% of the total order cost as a down payment and the remainder after the products have passed the quality tests and shipped. Depending on your order size and the type of product, however, you can change these payment terms.
Along with product specifications, you also need to mention the quality control and testing standards in detail. Make sure to mention all design details including color, appearance, size and shape, structure, and raw materials, among others. The more details, the better. You can also rope in a reliable and experienced third-party product inspection company for on-site testing.
The fourth important element of your sales contract is the delivery schedule and shipping (or packaging) details. You should spell out packaging details carefully, especially if your product requires specialized packaging. Also, create a delivery schedule based on the time required to approve samples, quality inspections, on-site and in-lab testing, and shipping.
5. Consider the General Rate Increase (GRI)
The primary benefit of importing goods from China is the lower manufacturing cost. However, whatever profit you made in manufacturing could be lost if you have to pay a higher cost for shipping the products. That’s why you have to consider the General Rate Increase or GRI.
GRI is the average increase in the base freight tariffs across different international trade routes. It is usually based on the change in demand and supply. GRI affects all businesses, whether you are an exporter or importer. Your shipping costs may as much as double due to GRI.
The best possible way to lower your shipping costs is to take the potential GRI into account and plan your shipments accordingly. For example, you can set your cargo collection date before the next GRI is announced. You can also compare the shipping costs of different carriers to get the best deal.
As you can see, importing goods from China can be a daunting task, especially for a first-time buyer. Hopefully, with thorough research on export-import rules, a water-tight contract, suitable GRI considerations, and working with a reliable supplier can make the task easier for you. Sounds like a lot of work?
Of course, an experienced third-party sourcing company like Jonble can do this legwork for you. Feel free to talk to our experienced and skilled team members or send in your detailed query, and we will get back to you in no time.