If you want to import goods from China to the Philippines, then this article is for you.
Here, I am going to introduce you to the basics of this venture.
It will help know what it is you are getting into.
So let’s dive right in.
How to Ship your Goods from China to the Philippines?
When importing from China to the Philippines, you can:
1. Let your supplier handle it
2. Do it yourself
3. Hire a China freight forwarder to do it
Do I need import license for importing from China to Philippines?
No general import permit for importing products from China.
But you might need a permit to import from a federal agency certain goods from China.
Where to Source the Best Products in China?
Here is where you might find the right products for you
· Online Sourcing Websites
· Trade Shows
· Online Searches
· Sourcing with a Sourcing Agent in China
Which Popular Products to Sell in the Philippines?
The Philippines has an extensive market for made-in-china products.
If you want to import safely and sell hassle-free you can consider the following products:
Furniture items like office desks, dining sets, beds, cabinets, etc.
Machinery and plant equipment
Tricycles, motorcycles, and bicycles
Steel products
Ceramic items
Electricals and electronic equipment
Construction materials
Vehicles
Plastic and plastic products
Paper
Pharmaceuticals and medical equipment
These are not the only ones. Of course, there are many other products that you can import from China.
You just need to do your research, identify your niche and then work on it.
Let’s move on.
Where to Source the Best Products in China
Sourcing products from China can seem daunting, but in a real sense, it isn’t.
You just need to do due diligence in finding the right supplier to deliver the products that you need.
Here is where you might find the right products for you
· Online Sourcing Websites
Online sourcing websites are large online directories where manufacturers list their available products.
These sites include Alibaba.com, made-in-china.com, globalsources.com, etc.
They are incredible resources to browse and see the selection and type of products available.
Here, you can get a general idea of what is available and general pricing information.
Besides, most suppliers list their MOQs here as well.
The best part:
You can chat and contact suppliers/manufacturers directly on these sites.
· Trade Shows
Visiting trade shows is an excellent way to see the product selection available in China as well as meet potential suppliers.
Here, you can walk the floor and have an up-close view of all the products in different industries.
You get to meet the sellers in person and talk business with them immediately.
When you meet potential sellers in trade shows, I recommend that you talk to them there and then and later do a factory visit.
This is so that you can be sure of the sellers’ capability to deliver the kind of products that you need.
The biggest trade show in China is the Canton fair which takes places twice a year in spring and autumn.
There is also the Hong Kong mega show which takes place annually.
· Online Searches
You can locate suppliers in China by performing a targeted search on your favourite search engine.
To avoid the thousands of results that comes with general searches, use specific keywords.
The best way to do this is to type in your ‘product +supplier, factory or manufacturer + china.’
If you find this overwhelming, you can try using China sourcing agents.
Allow me to explain this in the next section.
· Sourcing with a Sourcing Agent in China
If you don’t have much experience dealing directly with suppliers in China, a sourcing agent maybe ideal.
An experienced sourcing agent will help you find the right products in China and oversee their quality.
He/she will generally take care of most of the sourcing process.
All you need to do is provide specifications and instructions on how the product should look/feel like.
Ideally, using a sourcing agent is the best and most reliable way to source from China without having to travel there.
With this, you will less likely encounter scammers or fraudsters trying to rip you off your hard earned money.
The bottom line:
There are multiple places and ways to source products from China.
What’s important however is finding the right supplier for the product – one who is reliable and you can trust.
Tip: Always strive to have a long-term business partnership with Chinese suppliers. This way, you will get the best deals.
Well then, let’s go into more profound facts.
Product Quality Inspection: How to Assure Quality Imports from China
Taking due diligence when sourcing from China is quintessential.
Well, fine!
I know you can do everything online from your location in the Philippines. Even in Alibaba shipping to Philippines, quality is something you cannot overlook.
But then in 2018, online transactions come with a lot of risks like scams and in this case, getting poor quality products, etc.
If your interest is to establish a long-term relationship with your supplier, you need to perform adequate diligence.
For this, you can physically travel to China to visit the factory/warehouse of your potential suppliers – to ensure that everything is in order.
Or, you can get an experienced third party inspector to represent your best interests on the ground in China.
Either way, you need to ensure the quality of your imports from China.
You have to start by verifying the legitimacy, reliability, and suitability of your supplier.
And then, ascertain product quality by doing factory inspections at every step of the manufacturing process
This is the only way to ensure that only the products meeting your requirements are loaded for shipping.
How to Ship your Goods from China to the Philippines
When importing from China to the Philippines, you can:
- Let your supplier handle it
- Do it yourself
- Hire a China freight forwarder to do it
The first option is quite common among first-time importers as it is simple and cheaper (as most think at first).
The second option is handling the shipping yourself which can save you money but not time.
Here, you will have to book the shipping space yourself from the shipping company.
You will also have to manage all customs processes both in China and your country.
Well, handling the shipment yourself can be stressful especially if you are not familiar with the process.
It is also time-consuming.
Now, the third option which I mostly recommend is hiring a shipping agent in China to handle the shipment.
It is convenient as you will be dealing with professionals in the import business.
Tj chinafreight has shipping service every week from China to Manila, whether if you have import license or not, we can handle your shipment and ship your goods to your home or warehouse.
Below is Tj chinafreight rate:
Tj chinafreight warehouse in China to Door in Manila(include ocean freight, destination charge for LCL, duty, vat, customs clearance in Manila), USD200 – 300/CBM Over 3CBM based on your goods detail, free delivery service in Manila.
Shipping Methods
On how to ship the products from China to the Philippines, there are three ways to do it.
- International express shipping using courier services like FedEx, UPS, DHL, China post, and SF express.
- Air freight; this is shipping by air using airplanes, and it is best for shipping samples and smaller orders. It can, however, be costly.
- Ocean freightwhich is shipping by the sea which is best for larger orders and bulky items.
Here there are many options.
- You can book FCL or LCL shipping depending on the quantity of your cargo.
- You can also book Reefer, Roro or OOG shipping also depending on the kind of product you are shipping.
Apart from these, you can generally drop ship the products directly from your supplier to your customers.
You can also choose a door to door delivery service.
Here, your freight forwarder will help pick the goods from your supplier and deliver them right at your doorstep.
Generally, the best method of shipping goods from China to the Philippines will depend on your delivery timeline and budget.
In both cases, you need to use a shipping method that is suitable for your supply chain needs.
Of importance is to work with a reliable china freight forwarder as this will help you get a better shipping deal.
Incoterms You Can Use to Ship from China
Incoterms are three-letter codes that describe the responsibility of an international seller to an international buyer.
Simply put, they are sort of an outline of what the sellers’ liabilities and responsibilities are in the import transaction.
Now, there are lots of incoterms that you can use to ship from China.
Some of these are;
· EXW;
It stands for ex-works and often, a named place follows it, i.e., EXW manila.
This incoterm doesn’t put much on the seller regarding responsibility.
All they need to do is to avail goods at the named place, and that’s all.
Usually, this is their warehouse in a named city/town in China.
· FOB;
It stands for ‘free on board,’ and it is a pretty common incoterm when shipping from China.
Shipping FOB means that the seller is liable and responsible for the shipment until they departure from loading port.
Once the shipping vessel leaves the loading port, all risks and responsibility transfers to the buyer.
· CIF;
Cost insurance freight shipping is also common in the ship from China business.
CIF costs are often inclusive of insurance and other expenses from the supplier’s warehouse, up to the destination port.
The buyer, in this case, you, only assumes liability of goods from the destination port thereon.
· DAP;
This incoterm stands for ‘delivered at the place.’
Like EXW, it is often followed by a named place or destination where goods are to be delivered.
In DAP shipping, the seller is entirely responsible for delivering goods from factory in China to final destination in the Philippines.
· DAT;
Itthis stands for ‘delivered at terminal.’
In this case, they have to transport the goods from the supplier’s factory in China to a specified airport/seaport terminal in the Philippines.
Here, the seller is responsible for all costs including loading, shipping, and unloading at the destination port.
This cost also includes the local port charges both in China and the Philippines.
Unlike DAP, however, this incoterm does not include delivery cost from the terminal to the final destination.
*You can find more information on incoterms at the International Chamber of Commerce website.
So which is the best incoterm to use?
Well, before I answer that, there is something I would like you to understand:
This is that you should not make the mistake of thinking that shipping EXW is cheaper.
Well, it’s not (at least in my opinion) and, thinking that it is cheaper is a mistake that most first time importers make.
To the best of my knowledge, the best incoterm to use when shipping from China is one that takes your shipment as far as possible.
This is the one that will help reduce risks and costs for you.
In this case, EXW and FOB are not applicable as shipment does not leave China.
Nevertheless, if this is not your first time importing from China, you should work with FOB, EXW or CIF terms.
Also, if you are familiar with China import processes, the above incoterms can work for you.
The above terms will give you more control over your shipment and thus control of the cost over shipping.
So choose what works best for you.
Import Taxes and Duties in the Philippines
Importing goods from China to the Philippines is easier this 2018.
This is all thanks to the ASEAN trade and good agreements that exempts almost 99% of goods from tariffs.
Shipments whose worth is below USD200 (P10, 000) are also exempted from importation tariff in the Philippines.
Now, I want you to note that your import duty in the Philippines will be calculated using the customs value of your shipment.
Note: The customs value is the value of shipment estimated by customs officers.
Therefore, if your goods exceed USD200, you will have to pay a specific duty set at 0%-65% depending on their value.
So let’s say that your imports into the Philippines totals USD1, 000 and the applicable duty rate are set at 5%.
Your payable duty charge, in this case, will be;
5% x 1,000
= USD 50
Apart from the import tariff, there are also other taxes that you may have to pay depending on the type of goods.
The VAT tax is also known sales tax in the Philippines.
This tax is set at a standard 12% irrespective of the value of the shipment.
So on the declared value of USD 1000 the payable tax will be;
12% x (value of goods + duty charge)
= 12(USD1000 + USD50)
= 12(USD1050)
Sales tax = USD126
In this case therefore, the total import duty and taxes for a shipment valued at USD1000 will be;
= USD (126 + 50)
= USD 176.
Please note:
- The declared value is crucial in the calculation of import duties and taxes.
Nonetheless, you cannot declare a large volume of goods under USD200 just to get rid of the duties and taxes.
Philippines customs often ask for the commercial invoice to confirm the value of the good.
So lying, in this case, can land you in big trouble.
- As for the tariff, different goods categories have different tariff rates.
It is therefore hard to know the applicable tariff rate without knowing the type of good and the HS code.
The harmonized system code is what customs use to locate the applicable tariff for a particular category of goods.
- Other taxes apply to certain kinds of products.
For example, alcohol, tobacco, perfumes, jewelry, petroleum products, etc. are subject to excise tax in the Philippines.
Wrap up
Importing goods from China to the Philippines can either be relatively easy or difficult.
If you are equipped with a full understanding of the process, it will be an enjoyable experience.
Otherwise, it will be stressful.
That said, I hope all the information I’ve given above will be helpful.
Use it as a guide to help get you started and take action towards finding and importing products from China this 2018.
If you have any questions on shipping from China to Philippines, welcome to contact Tj chinafreight anytime.
