The Ultimate Step-By-Step Roadmap to make importing goods from China hassle-free.
What you must know to make educated and informed decisions before importing goods from China
Why are we publishing this information?
Importing from China can be a very daunting task for newbies, especially if you do not have the right tools or the right partners. It is our goal here to equip you with enough knowledge, with a step-by-step guide describing what you should do when importing goods from China.
At the end of this article, you will surely be able to make a more educated and informed decision about your procurement project from China.
Please keep in mind that the more knowledgeable you are about China, the easier you will navigate your way around all headaches and difficulties that come with doing business with China.
Please do not hesitate to contact us by email: cedric@nexusgroupepc.com or by WhatsApp: +86 15221019907 for further inquiry or if you need quality, professional, reliable, and trustworthy international agents in China to assist you with your procurement from China.
How to efficiently import from China and make the process smooth?
As a buyer and reseller, importing goods from China can be an extremely lucrative enterprise. For instance, more than 100,000 companies have imported goods from China to the US in 2016.
Nowadays, many businesses have been successful in shifting their sourcing strategies towards importing goods from China. However, importing goods from China is never an easy undertaking, especially for new importers. The process of importing goods from China can be hindered by language barriers, cultural differences, costs, and it can sometimes be very complex and confusing.
The following will provide you with the more comprehensive, accurate, and specific answers to that question, and gives you the confidence to get started with highly actionable information, tips, and advice.
So let’s dive right in and read on!
1. Identify your import rights.
It is crucial as a first step to know whether or not you have the right to import goods in your country. However, this is not always a necessary step if the quantity of goods you are importing is small and is used for personal use only or the value is not big.
In addition, import regulations often apply to goods imported for commercial – business or resale – purposes. Therefore, only the customs authority can decide about what qualifies as personal use. Some footwear that is identical or several very similar suits will have might not qualify as items for personal use.
In the event you are importing goods from China in large volume, you need to check if you have the imports rights. In this case, the requirements about imports permits may be different from one country to another, let’s look at some instances:
- As a US citizen, depending on whether you want to import as an individual or a business you need the following:
As an individual, you need your Social Security Number; As a business, you need your company Internal Revenue Service Number (IRS EIN). For more information about importing goods from China to the US, please check both our article on the topic and this resource.
- If you are in Europe, you will need to register as an economic operator and get an EORI number.
- If you are in Japan, you need to declare all the goods your intent to import to the Director-General of Customs. They will examine the goods involved and if they are in line with the goods allowed to be imported into the territory, they will issue you an import permit.
- If you are in Canada, you will need to obtain a Business Number issued by the Canada Revenue Agency (CRA) first.
- If you are in Australia, as a company or an individual, you do not need an import permit to imports goods into the country. There is no required import license for importers.
2. Identify the goods you want to import.
There are a lot of parameters to reckon with to identify the right goods to import from China. Our guide about importing goods from China can definitely give you a head start on how to go about it.
Besides, we will provide you with additional information that could be helpful too in selecting the right product for you and your business.
The ideal good to import is small and light. This enables you to save money on importing, storing, and then shipping to your customers further down the line. You also need to think about the quality of the goods you want to import. Especially if you are thinking of making it your own brand. You must keep in mind that a business is defined by the quality of its brand and that you make money by selling products so your products must stand up, it has to be something to be proud about selling.
So, you need to do your research, you would better gather as much information as possible before importing goods from China.
Some of the ways to gather information about your products include traveling abroad to go do the groundwork on your own, pursuing products online, to attend trade shows.
You need to have an approximation of the cost of the product to have an idea of the profit selling you will make. This can be done by checking the price of your product on websites like Alibaba or AliExpress.
However, keep in mind that prices on those websites are not always correct and you can only get the right price after sending an accurate inquiry to the seller or you can also use the services of a reliable procurement agent in China.
You should also get some information about the product composition and some samples as well. This information will help you to determine the (HS Code) of the products later to have an idea about how much tax duty you will pay on your products. Please check our article about tax duty in the US for more information about the HS Code and the customs clearance process.
3. Make sure your goods comply with your country’s safety and health standards.
You need to make sure that your products comply with safety standards, that they are not subjected to high customs duties, or carrier restrictions, as some countries have restrictions on products such as Iron, Tabaco, alcohol, guns, etc…
Here are a few tips:
Check the Technical Compliance and the Chemical Regulations in your country. In the US for instance, you can
- Look into the regulations of agencies like CPSC, ASTM, and UL.
- Think about how your product might be dangerous to a consumer, even with improper use.
- Check whether the product design is compliant by purchasing an ASTM standard file that lists technical requirements.
- Add a clause to your purchase contract that your product must comply with certain standards before signing the contract with your Chinese supplier.
Ensure the Labels on your products comply with US labeling requirements in advance.
We suggest you create your label in .ai or .eps format and send it to your supplier before he starts the production.
Getting some test reports can also come in handy when the time comes. You can purchase CPC, GCC, and other agency test report templates online.
You can also seek to get proof of compliance by submitting samples of your product for testing to a CPSC accredited compliance testing company.
Below is a list of some products you should avoid:
- Tobacco-Related Products
- Alcoholic Beverages
- Trademarks and Trade Names
- Livestock and Animals
- Meat, Poultry and Egg Products
- Plants and Plant Products
- Insects
- Seeds
- Flammable Fabrics
- Multi-Purpose Lighters
- Foods, Drugs, Cosmetics, And Medical Devices
- Gold and Silver
- Animal Fur
- Motor Vehicles and Boats
- Branded products
Importing goods that violate restrictions will cost you money in fines and penalties. Such goods would be detained and destroyed.
4. Calculate the costs for importing goods from China early on
The first step is to determine the 10-digit tariff classification number for each of your goods. These numbers along with the Certificate of Origin are used to determine the rate of duty you must pay when importing goods from China.
Be careful with the Incoterms you agree with your supplier. Before you place the order with the supplier, try to compute what will be the total cost of importing goods from China. For instance, if your incoterm is FOB, it means that to get the total cost of importing goods from China you need to add up:
the product price from the supplier + the shipping charges from the freight forwarder + the customs clearance fees, tax duty, and the transportation from the delivery point to your own warehouse.
You must get an idea of this cost as early as possible, even if you are missing some information, you need to estimate your costs as accurately as possible. Knowing the cost early can be an invaluable measurement of whether your goods are worth importing. This will also make you avoid overcharging clients when your imports come costing because you didn’t know the costs from the onset.
5. Find a supplier in China
Once you have selected the product you want to import from China, you need to find a reliable supplier.
Many importers nowadays rely on Alibaba or AliExpress, but the truth is not all suppliers on those platforms own a factory, in fact, they are more likely to be wholesalers or trading companies. Please check our article about how to distinguish manufacturers from trading companies.
A good thing to do before placing the order with your supplier is to always draft a formal legal contract or a purchase agreement, manufacturing contract, purchase contract, sales contract, or supplier agreement which may be valid for several years.
If you do not know how to go about this, please seek the devices of a lawyer specializing in China business laws.
To evaluate and confirm the price, you will need a Pi or Proforma Invoice.
After you have selected your supplier, ask him to provide you with this document which should encompass the harmonized system number, the description & value per item, a picture of each item, the weight and cubic meter of each item, the transportation cost from the supplier warehouse to your freight forwarder If you have one in China, the payment terms and delivery time, the guarantee, the packaging information, the supplier bank information, the quotation validity period, the term of purchase, etc….
Please be aware that a Proforma Invoice is not a legal contract, it is not a purchase order nor doesn’t legally bind your supplier.
It is also good to consider the following points:
- 1. FOB terms are the best purchasing term for you if you have a freight forwarder in China that can handle your shipment to your port of designation otherwise it is best to let the supplier handle everything from China to your port of destination. Here it is best to get the supplier to agree to CIF terms. However, for small quantities like or units, the supplier might not agree to provide a FOB quotation but you can provide him with the address of your freight forwarder in China and he will check the related transportation fees from his warehouse to your freight forwarder.
- Give it plenty of time when importing goods from China. For large volumes of goods, the cheapest shipping mean is by the ocean and it is indeed quite slow. Besides, the time required to get the goods, including placing orders, documentation, transportation from China to your location, customs clearance, and port or terminal handling for a container of goods can take up to 3 months.
When you planning to import goods from China, you should keep in mind that you are dealing with a huge market where you can get many different prices for the same article as well as you are dealing with a different culture. Therefore, you should:
- Avoid always looking for the lowest price:
- Lowest price is always accompanying by high risk, maybe quality, quantity, or reputation.
- Clarify your product details: Not being clear about what you want will result in the factory making the decision for you based on cost-saving.
- Double check with the supplier that he understands and that he has confirmed every specification of your target product, including the packaging. Ask him for some samples to double-check the quality.
- Do not show distrust towards your supplier: You need to ensure that your supplier supports you in every step of the transaction. Showing distrust towards him will not encourage him to look after your production in the factory and to sincerely help you when trouble happens.
6. Prepare your shipment
Once you have confirmed the PI, made the payment and the supplier has started your production, now you need to look for a freight forwarder and get a freight quote. We suggest you look for one or three of them to ensure that you’re getting the best deal even if you already have one that you trust.
Also, consider getting Cargo Insurance to make sure that your goods are covered if any damage arises.
They are usually super cheap compared to the costs involved if your shipment is lost or damaged at some point along the way when importing goods from China. Ask the freight forwarder to send you a copy of the Cargo Insurance, in case you need to make a claim you will need it.
Some insights about Incoterms:
According to ICC, The Incoterms® rules are the world’s essential terms of trade for the sale of goods. Whether you are filing a purchase order, packaging and labeling a shipment for freight transport, or preparing a certificate of origin at a port, the Incoterms® rules are there to guide you. The Incoterms® rules provide specific guidance to individuals participating in the import and export of global trade daily.
These trade terms must be agreed in writing between the supplier and buyer.
Below are the common ones you will encounter when you start importing goods from China:
- Ex Works (EXW): means you arrange the pickup of your goods at the factory and you take full responsibility (arranging and paying) and liability following up with problems). It will be definitely helpful to agree and add in the Make sure to add purchase agreement that the supplier must help to load the truck.
- Free To Carrier (FCA): Here the supplier delivers your goods to an agreed point of delivery and you take responsibility and liability once the shipment is handed over to the carrier, typically near the port.
- Free On Board (FOB): The supplier arranges the delivery of your goods to your freight forwarder and transfers your full responsibility and liability once the containers are loaded on board. You might have to pay the local charges between delivery to the carrier and loading on the vessel.
6. Check the status of your cargo
Normally, you should get an arrival notice within 5 days or less of port arrival, by the destination agent listed on the B/L.
Once your shipment reaches your country, you need to file entry documents. Doing this might be very complex and time-consuming for you if you are not familiar with the process, you might consider hiring the services of professionals brokers( for example USA Customs Clearance, powered by AFC International), to get things done quicker.
The entry documents include:
- A bill of lading is a list of all the items to be imported.
- An official invoice that lists the country of origin, purchase price, and tariff classification of the goods imported.
- A packing list that details the imported goods.
- An arrival notice was provided by the freight agent.
Consider doing the following to speed up the clearance process of your:
- Systematically invoice your goods,
- Show the exact quantity of each item of goods in each box, bale, case, or another package;
- Put marks and numbers on each package;
- Show those marks or numbers on your invoice opposite the itemization of goods contained in the package that bears those marks and numbers.
Please check our post about customs clearance for clearer and more detailed information.
6. Obtain your shipment
If everything goes well with the customs clearance, you can pick up your goods.
Once you have picked up your goods, you can send an email to your supplier that you have received the goods but you haven’t checked them yet. Take some time to check the quantity, the quality, possible damages, packaging, instructions, and labels and if everything is as per your purchasing contract, you can confirm with them.
Get Help with Importing goods From China
Importing from China may seem daunting, but it can be very easy and hassle-free if you have the right tools and you are working with the right partners.
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