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Import From China Tip #12 – Another Good Product To Import From China

I passed this store and it reminded me that electric bikes are a great product to import (even to this day). I reveal heaps of other hot products to import at my live events and training – be sure to register for the next one!

Talk soon!
Peter

 

Import Export – Why You Should Import Goods Made In China!

 

Quick Tip: What Products Should You Import From China?

I just made this quick video revealing a hot product to import right now – keep in mind that you can accessorize practically anything! With different styles, colors, shapes and designs. Have a think what is HOT right now that YOU can accessorize?

Talk Soon,

Your friend,
Peter

 

Import Export Tip #32 – Storing Your Goods In Warehouses

The last thing you want to do is store your goods in your mums basement – that’s no way to grow an importing empire! Watch the video and enjoy!

Your friend
Peter

 

Basic Importing to Australia and NZ

Basic Importing to Australia and NZImporting to Australia

Importing to Australia, generally, does not require a license.  You do need special licenses, however, for some products.  You can learn more about Australia’s prohibited goods, by visiting http://www.customs.gov.au/site/page4369.asp.

Categorizing Goods

Categorizing your goods is important to insure the right duties and tariffs will be imposed.  If you’re not sure how your goods will be classified, you can rely on the Customs providing a tariff advice service.  To do so, you need to apply for a tariff concession on imported goods.  You want to be sure they do not have a competitive advantage with goods of Australian manufactures.  To apply for a tariff concession, all you need to do is take all your supporting documentation.

Even though you apply for a tariff concession, you still have the sole responsibility of making sure your goods are categorized properly.  Even though you’re broker, freight forwarder, or service provider is preparing your customs documentation, you are still responsible for it.  Before you submit them to Customs, be sure to verify all the documentation.  You’ll also want to be sure you keep copies of the documents for your own records.

Arrival of Goods

When your goods arrive, Customs will either relinquish the inspection or check your goods.  Commercial documentation may not be necessary, but you still should keep all Customs documentation for a period of five years.  Notify your broker of freight forwarder of any errors.  Make a note of surplus goods, promotional materials and samples.   If you’ve ever had one, you have to submit an Australian Business Number (ABN).   This allows importers to obtain input tax credits.  Goods and services tax (GST) is payable on most goods imported into Australia.

Another form of tax is the GST–Goods and Services Tax.  This is payable by businesses, organizations, and private individuals whether they are registered for GST or not. If you are a GST-registered business or organization and you import goods as part of your activities, however, you may be able to claim a GST credit for any GST you pay.  You do this by participating in the deferred GST scheme.  The GST deferral scheme allows you to defer the payment of GST on taxable importations until the first activity statement you lodge after the goods are imported.  Certain eligibility requirements need to be met in order to participate in this scheme.

Duties and Tariffs Cost

When determining the costs of duties and tariffs, it is necessary to rely on the classification code of the goods, appraisal, and country where the goods came from.   Appraisal of goods is a complicated process, therefore, it is good advice to consult a customs broker.  You can also contact the Customs Information and Support Centre on 1300 363 263, or email them at information@customs.gov.au.

Importing to NZ

In importing goods to NZ, the following steps are necessary:

  • Create concise entries
  • Disburse all customs charges
  • Retain all commercial documentation for seven years and be able to present them if Customs requires them
  • Meet all legislative requirements

Categorization of Goods

As in Australia, categorizing goods imported to NZ is important and complicated, and it may be best to use a Custom broker.  You are responsible for categorizing properly.   Whether you use a broker or finish the process yourself, you will need to provide certain information.  This includes:

  • Purchase invoice
  • Cost of Manufacturing, Freight, and Insurance
  • A Product sample
  • Copies of Catalogues or brochures
  • Evidence of origin
  • Receipts for Proof of payment

In addition, for some items, you will also need the following:

  • A Bill of Lading or An Airway Bill
  • Invoices
  • Packing lists
  • Insurance certificates

It will also be necessary for importers to contact shipping companies, airlines, or freight forwarders to know their requirements, operating hours, and location of goods.

Help for Classification of Goods

If you are a “Newbie” to the import business, you don’t need to worry.  Training programs are available through Customs.  For information about these programs, send an email to cbaff@clear.net.nz.

If you’ve been in the business for some time, you may be able to finish the entry yourself.  You do this through electronic means with the use of the CusWeb software.  Again, remember that you are always accountable for the truthfulness of these documents.  Make sure you are able to verify every detail.

Finding a Customs Broker?

If you choose to use a Customs broker and freight forwarder, you can find them the New Zealand business directories.  If you want a list of affiliated CBAFF Customs brokers, you can visit www.cbaff.org.nz.

Costs of Tariffs and Duties

The tariffs and duties of your goods are determined through categorization, country of origin, and the trade agreements some countries.  Duty is expressed as a percentage rate.  It is calculated on the Customs value of the goods.

GST in NZ

GST is the Goods and Services Tax.  A 12.5% GST is imposed on roughly all products imported to NZ.  You can pay the GST using the following amounts:

  • Customs value of the goods
  • Any import duty, anti-dumping and countervailing duties, ALAC or HERA levies payable
  • Freight and insurance costs of transporting your goods to New Zealand.

Import Entry Tax

Every commercial import entry or declaration for goods with a duty and GST liability of $50 or more is imposed with an Import Entry Transaction Fee of $25.38 (GST inclusive).

Mode of Payment

Payment methods vary.  There are three options to choose from.  They are: 

  • Cash
  • Deferred payments (only importers with deferred accounts avail)
  • Broker deferred (only availed upon the request of agents with broker deferred accounts)

 

Import From China – Quick Start Guide

I doubt anyone in the Australia, or even in the world for that matter, doesn’t have at least one item in their home that has the “made in China” label on it. Importing from China can be a complicated task to start, but there are a few steps that can make it a lot easier for you.

1. Select the Product You Want to Import
Not every product suits every person. To be successful, you want to select the right product. Everyone wants profit, but there is more to selecting the product than just selecting the least expensive item available, or the one that allows for the highest mark-up. When considering your product, here are a few things you should consider:

  • Always choose a product you love. It’s easier to stay motivated if you are passionate about something. When others see your passion for something, they want it more (this also makes it easier to sell the products too!
  • Consider the cost for shipping. If you select something you can ship in large quantities, it will save you money. Always consider your product size and how much you can fit into one shipment. If its large, bulky, expensive to ship with small profit margins you may want to change your product .. on the other hand if it’s small and can be transported by air and has high ticket price and high margin (maybe a small tech gadget) then you may be onto a winner. That’s not to say that anything bulky wont make money.
  • Originality is important. You don’t want to produce something others may mass produce. You want something others will want/need, and have to come to you to get. If its in Woolworths, Coles or Aldi then reconsider your product as these big companies will have the market share over this product (unless you market the product with a new feature and you market/advertise it differently!)

2. Write Down Those that Can Provide You with Your Product
Suppliers can be found by looking online for trade directories or professional sourcing companies. There are several good places you can look to find them:

  • http://www.made-in-china.com. This is a directory of Chinese suppliers who provide buyers with company information, product listings, contact details, company culture information and even factory photo tours.
  • http://www.chinayellowpages.org. This is an outsourcing directory which contains listings of products with website URL’s and contact details.
  • http://www.china.cn. This is an outsourcing directory which has thousands of Chinese products, buyers who provide it, and contact information for each buyer. In addition, this website also offers buying and selling leads, tradeshow information, and trading resources for buyers and sellers.

There are so many places to find suppliers – alibaba.com, Global Sources, HKTDC and many more. After doing some searching you’ll discover that every many and his dog will claim to own a factory in China – which is why you tread carefully and attend one of my events to know how to save yourself hours and weed out scammers and ‘middle men trading companies’.

3. Make Contact with Each Supplier You List
When you’ve completed your list of exporters, you need to contact them and ask questions in order to prepare a “short list.” This is a list you narrow down after talking with them. It will help you select the supplier who is best for your needs. Be sure to include things like:

  • References—A supplier should be able to give you a list of client references if they are a reputable supplier. When they give you references or testimonials, it is imperative that you check them. There are fraudulent business listed online, and you want to make sure you aren’t dealing with one.
  • Licensing Information—All reputable business will be properly licensed and in compliance with all trade laws. Make sure any company you is to avoid any future legal problems. Ask if they have an export license!
  • Manufacturing and staffing—You will need information regarding the exporter’s relationship to the manufacturer. Ask if they manufacture the products themselves, and if not, do they get paid by the manufacturer or only work for you. This only applies if you’re dealing with a sourcing agent.
  • Location and Name of Factory that will be Producing Your Product—Ask the supplier to give you the name and address of the factory where the product is manufactured. You’ll want to make sure they are a reputable supplier and that the factory exists! (we show you more on this at our seminars)
  • Experience of the Factory for Producing your Particular Product—There is more to consider than just cost when choosing a supplier. Quality is also important. The manufacturer’s experience producing your type of product is often an indication of the quality of work they do. So ask if they have produced your item or a similar item before as there is also a good chance of saving you costs on moulds (if your item requires a mould).
  • Product Samples—If you are not manufacturing your own product, you’ll want to see samples, so you’ll know the product meets your standards and requirements. The supplier you select should be able to show you samples of the product. You want to make sure you get exactly what you are paying for. When you receive it be sure to STRESS test it for durability, heat, moisture etc

4. Negotiations with Selected Suppler
Chinese customs and culture are the basis for how they negotiate a contract. They don’t negotiate the same as the Western world, so certain tactics are required. To be prepared for Chinese contract negotiations, remember the following things:

  • Relationships—Each business deal creates a new relationship with the person you are doing business with. In China, they aren’t negotiating with a business, but with a person. Chinese exporters will take things slowly until to get to know you better.
  • Moral Influence not Legal Practice—Chinese think of the actual contract as a formality. The relationship and moral integrity seal the deal. It is more than just a legal practice. Forget about how quickly you want the contract signed. You definitely do want a signed contract, but good negotiations rely on the relationship.
  • The Chinese feel in the relationship both you and they are morally obligated to perform, even without a signed contract.
  • Hierarchy—The simple mistake of calling a high-ranking executive by their first name or shaking a low-executives hand first can affect your interpersonal relationship and the willingness of the Chinese executive to negotiate with you. Pay close attention to how executives address each other and follow their lead.

5. Find Resellers for Your Product
This process can take a lot of time. It can also be difficult at times. Doing this process, however, can decrease the time you spend and increase your chances of success. These simple tips will help:

  • Contact the decision maker for each potential reseller by telephone. Take the time to introduce both you and your company to them. Check to see if they are interested in receiving information by e-mail. This will help you to verify their email address.
  • Send an e-mail that is brief. Attach something professionally designed to describe your company and your product.
  • A few days after the email contact, you’ll want to follow up with a phone call. Request a meeting with the supplier. Be prepared to both sell your product in order to get a signed contract. Then, you can begin ordering product.
  • You can sell your goods online with your own web store (we show you how at our bootcamps for under $250)
  • Brick and mortar business (not recommended for newbie’s)
  • Selling via eBay is a good option to attract brand awareness and sell old models and last season stock – however there are so many BETTER ways than this.
  • Become a wholesaler! This is an awesome and fast way to sell a lot of product to only a few customers! (we show you how at our events)
  • Coupon sites like spreets groupon and scoopon and all the other sites ending with “on” (there seems to be one popping up every hour!) these sites get TONS of traffic.
  • Many more ways! I cover how to sell your goods in much more details at the bootcamps.

6. Begin the Ordering Process
Shipping arrangements vary from supplier to supplier. Each one will have a basic shipping agreement and a minimum order amount. There are several common types of shipping from China to the Australia.

  • EMS–Express Mail Service—This is a worldwide shipping service that works with the United States Postal Service to deliver goods from other countries to the United States.
  • DHL– International DHL—This is a global shipping company which provides shipping services commonly used for shipping from China to the AUSTRALIA.
  • FOB–Free On Board—This is used for freight shipping, with a port of loading. This means that the seller has to pay both transportation costs of the goods to the indicated port of loading or shipment and the loading costs. The buyer must pay the costs of transport, insurance, unloading, and transportation from the port of arrival. The buyer takes ownership of the goods as soon as they leave the port of shipping.

7. Customs, Border Protection, and Duties
A service port of entry near you can help you with this. Simply ask for the CBP import specialists for your port of import. They can give you specific product requirements, duty rates, filing entries, preparing and filing all required paperwork. We have good customs agents and shipping agents we can connect you with who have done work for many of our clients, at our live events we connect you with them.

8. Pick-Up and Transport
You will need to have your shipment picked up at the port of entry. It will then have to be shipped to your warehouse or to local resellers. A commercial cargo company should be contacted and all arrangements made prior to shipment. You can find one in your local yellow pages or online, shipping agents and logistic companies handle this for you – learn more at this at our events.
The import/export business to China is not an easy one for beginners to learn. You’re dealing with another culture on the other side of the world. If you follow the above steps, however, you can learn how to do it and turn your questions like, “China, how?” into “China, Wow!”

 

Negotiating With Chinese

Negotiating With ChineseThe Chinese way of life is very different from that of Western countries. A different lifestyle also has an effect on negotiations. You need to consider Chinese customs when negotiating with them. No matter what you hear, there are no experts on how to do business there. There are truly no experts on Chinese negotiations. If you want to enter the world of import/export to China, there is a book, “When No Means Yes,” that you may want to consider reading.

It may give you a better understanding of what it’s like to negotiate with the Chinese.To the Chinese, culture is extremely important. For the Chinese, culture is both a way of life and the foundation used in all business negotiations. Study the Chinese culture in whatever method works best for you. Read, watch videos, or even go to China if you need to, but learning it will greatly help you in negotiations.

Here are a few tips about Chinese culture that will help you in import/export negotiations:

  • Appear Clever—If you want to appear clever to the Chinese, learn a few Chinese idioms, and always listen more than you talk. One of the worst things you can do to hinder a negotiation is to go into a negotiation in China being an “American.” Some practices that are acceptable to you may be offensive to the Chinese. It is best to find a Chinese person you trust, and let them handle the Chinese during the negotiation.
  • Gift Giving—Giving a small gift is customary when you go to a Chinese negotiation. It will help to show that you know a little about Chinese culture. It doesn’t need to be an extravagant gift. Something small, but special from your hometown or the surrounding area is perfect, especially if it isn’t easily found somewhere else. This helps you to start to build a relationship, which is important in Chinese business. Once the relationship is established, gifts of wine or expensive whisky are expected for the “big” guys.
  • Build a Relationship First—Once you’ve enjoyed Chinese hospitality in a negotiation, wait. Don’t make an immediate commitment. Relationships are imperative to the Chinese, and they take time to build. You may want your product in a hurry, and you may get it in a hurry, but don’t negotiate it quickly. In fact, you can expect to be there a LONG time. Chinese negotiations are never short.
  • Expect the “Tag Team” Approach—During a negotiation, always expect the “tag team” approach. The first team will entertain you and make sure you’re happy, well fed, and sometimes even a bit drunk. Everyone wants to nap a bit when they’re full. When you want to hibernate like a bear, the second team comes in. They come in all fresh and ready for the real negotiations to begin. You’re not in the best conditions to negotiate properly.
  • Invite Them Outside Their Hometown—In order to win in a negotiation, once you’ve established a relationship, you should invite them outside of their hometown. This means you’ll have to host them, but if you get them away from their comfort zone to a neutral area, you can have your own “tag team.” This will give you better luck with your team.

The world of Chinese negotiation is definitely not like negotiating in the Western world. It will take some getting used to. Negotiation is necessary, however, if you want to be in the import/export business with China. If you pay attention to the above information, however, you should do just fine.

 

Drop Shipping Advantages and Disadvantages

Drop Shipping Advantages and DisadvantagesWhen sourcing products, using a wholesale drop shipper is a commonly-used form. You don’t have storage fees, and you pay for only the goods you sell. “Long-tail” is a new marketing buzz word. It means the “long-tail” targeting the far corners of niche markets. Go after areas that are normally untapped. Then, sell a lot of low-demand products. Research has shown that when combined, sales of low-demand products actually exceed those of high-demand single products. Drop shipping allows you to use this strategy. To effectively select a drop shipper, however, you must be aware of how the process works.

DROP SHIPPING—HOW IT WORKS Drop shipping can be profitable for the new import/export dealer if you understand the ropes. Here are the steps to take to insure using a drop shipper is a success.

  • Research and find a supplier which provides drop shipping services and adequately meets your needs. Make a short list, then thoroughly examine each supplier on your short list to make sure they are a legal business.
  • Contact the supplier by email regarding what you want to sell.
  • Create an account or pay for each item as you sell them, whichever the drop shippers you select requires.
  • After set up, you just grab the drop shipper’s posted photos and product descriptions of the items you plan to sell.
  • List the items on eBay or your own business website.
  • Access your supplier’s site when you make a sale and receive payment.
  • Click on the products and proceed to the checkout process.
  • Input buyer’s details.
  • The supplier will pack and ship the products for you.

Drop shipping can help small businesses to be successful. It has both advantages and disadvantages: ADVANTAGES

  • SAVE TIME—The drop shippers handle and manage the stocks for you. This leaves you time to work on other aspects of your business.
  • NO STORAGE FEES—With drop shipping, you don’t have to store stocks on site, so there are no storage fees.
  • PAY FOR WHAT YOU SELL—You only have to pay for the stock you sell, and aren’t stuck with products that don’t.
  • NO MINIMUM ORDER REQUIREMENT—No minimum order requirement means start-up costs will be low.
  • CHOICES—First-time and experienced sellers both think drop shipping is excellent because it allows you to offer a greater number of choices.

DISADVANTAGES

  • STOCK SHORTAGES—You may experience an unexpected shortage of stocks. This will leave you to face unsatisfied customers on your own.
  • NO INVENTORY CONTROL—You don’t have any control over the inventory, therefore, you might not be able to meet your customer needs the way you want to.
  • YOU ARE RESPONSIBLE—If things go wrong, you alone hold the responsibility.

You must realize that drop shippers are not perfect. Things may happen that you have no control over. Still, all-in-all, drop shipping is a good way for new sellers to get their start.

 

Choosing What To Import From China

Choosing What To Import From ChinaSometimes, when you want to begin importing/exporting from China, you know what you want to import, but other times, you’re not sure. If you know, that’s great, but if not, there are ways to figure out what works best for you and will bring you the greatest profit. THINGS TO LOOK FOR

  • Look for a gap in the market.
  • Find an extra value you could offer to differentiate your product or service from the current offerings.
  • Research potential products before you make your final decision. You want to be able to sell the product out when it arrives.China is usually thought to be “the world’s factory,” so plenty of products are available choose from. A few things you want may want to consider are:
    • Steel Products
    • Housing Products
    • Furnishings
    • Equipment
    • Textiles
    • Plastic Products
    • Chemicals
    • Other non related products
  • Don’t simply restrict yourself to what you can buy “off-the-shelf.” There are excellent manufacturers in China, and they can customize just about anything to your specifications.
  • To keep it simple and low risk to start your business, go with only one product category which can be obtained from a single supplier in China. It can be complex and complicated when you buy different products from more than one supplier in the same container. If you’re a new entrepreneur, this can increase your risk of failure.

THINGS YOU NEED TO DO FIRST

  • Check with your potential customers. Ask what they want and how much they’re prepared to pay for it.
  • Check manufacturing companies to see if the capability to manufacture your product exists in China.
  • Develop a sales, marketing, and distribution strategy.
  • Identify your product and have a business plan.

PRODUCTS YOU SHOULD AVOID Some products are better than others when deciding which to import from China. Some are difficult and should probably be avoided by newcomers. These items include:

  • High value products which require a great deal of capital to buy a small amount of stock
  • Those which show a consistency of going go down in price. This could mean your stock will become worth less than you paid for it.
  • That materials which are quickly superseded
  • Items competitive to resell
  • Low margin items

Remember that the products you import must comply with your country’s standards and regulations. If you’re looking for a brand-name product, be sure to check for an existing exclusive distribution agreement. If one exists, you can’t distribute the product.

With a little work and time, you can become an importer. You can learn how to deal with the Chinese, what products to purchase. Take caution when making your initial investment and you increase your chance of success.

 

Licensing, Business and Product Approvals

Licensing, Business and Product ApprovalsAdministrative licensing covers a number of issues.  These include:  Business operation, product approval, investment review, and related issues. These issues challenge companies on a daily basis.  They can slow investment and expansion.  Sometimes, companies have difficulties in obtaining required licenses for doing business.  They can wait months for business license approvals even though regulations require decisions in a matter of weeks.  Regulator disagreements often result in confusion and delay when applying for permits.   If regulations or approval procedures are unclear, they can cause companies to believe that the licensing system may be biased against them. 

If you want to get a license from the China Certification and Accreditation Administration, there are several steps you need to take:

  1. Make the application to one of the CNCA-accredited certification bodies. When making the application, you must use the standard form or do it online with a Declaration of Conformity to Chinese standards. You MUST submit the application in Chinese.
  2. You must do sample testing at an accredited CNCA test laboratories.  The lab will usually be assigned by the certification body to which the application was submitted.  The manufacturer cannot normally choose which lab performs the CCC testing unless a strong argument is presented to justify choosing a specific lab other than the assigned one.

    The sample testing includes both safety and EMC testing. For safety testing, China will accept a CB Test Report with China deviations. If the CB report does not cover China deviations, additional safety testing must be performed in accordance with Chinese standards.

  3.  Engineers will be assigned by the certification body to perform factory inspections.  The factory inspection will usually lasts two days.  A technical engineer and a quality assurance engineer are assigned by the certification body to inspect the facility.   There are ten aspects that have to be inspected, including:
    • Documents and records
    • Purchasing and receiving inspection
    • Process control and inspection
    • Routine tests and verification tests
    • Inspection and test equipment
    • Control of nonconforming products
    • Internal audit
    • Changes to certified product
    • Packing, handling, and storage

    The official publication of CCC Implementation Rules gives the definition for each category of products.  You must include the following documents with the application for a CCC Mark:   

    • If the factory has been inspected for the same product types, include the application for factory inspection or factory inspection report.  
    • If you have them, include the business licenses of the manufacturer, factories, and local distributors.
    • Brief introduction of the manufacturer and factories
    • Product description, user manual, and any other related material should be included.
    • Chinese labeling
    • List of critical components
    • Manufacturer’s Declaration of Conformity
    • Electrical diagrams, block diagrams, circuit diagrams, and assembly diagrams.
    • Include any CB report and CB certificate.
    • If applicable, submit the Power of attorney.

Don’t worry, it’s actually easier than it looks.  It is mostly just time consuming.  It is easy to find people who can help you with the process online.  It is necessary, of course, to research to see they are legitimate.  You do need to spend a lot of time, but investing the time it takes to obtain the proper license, business and product approval can well be worth it.

 

 
 
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