Importing From China Guides

Why import from China?

Top 10 products to import from China in 2021

• Electrical machinery, equipment: US$604.5 billion (24.8% of total imports)
• Mineral fuels including oil: $357.7 billion (14.7%)
• Ores, slag, ash: $254.6 billion (10.4%)
• Machinery including computers: $210.9 billion (8.6%)
• Optical, technical, medical apparatus: $99.7 billion (4.1%)
• Vehicles: $80.1 billion (3.3%)
• Plastics, plastic articles: $75.7 billion (3.1%)
• Gems, precious metals: $71 billion (2.9%)
• Copper: $58.9 billion (2.4%)
• Organic chemicals: $54.9 billion (2.3%)

Those are not the only products that China exports. There are more that unfortunately, we won’t be mentioning today. You can, however, find them online to have a better understanding of the best products to import from China. You also should know what destinations you should import your made-in-China products. Read on to find out more about this.

Cheap Labor And Low Manufacturing Costs

As per Statista, the per-hour manufacturing labor costs in China were $6.50 in 2020. By comparison, the average manufacturing labor cost in the US was around $25 per hour – almost four times higher than in China. Moreover, US labor costs are projected to reach $28.51 per hour in 2024, meaning that manufacturing in the US will only get more expensive.

Easy To Import Into Other countries

Since China is the world's largest factory, mature freight networks has been built in different areas, which makes China import much easier and more convenient.

You don’t need to visit Chinese factories to place bulk orders.

You can arrange for shipments, pay import duties, and clear your shipment through customs from the comfort of your home.

High Efficiency

Low labor costs and a large population mean that China can always find staff who are willing to work, even on short notice. Chinese factories can handle large production runs that require manual labor at inexpensive prices.

You can also rebrand Chinese products under your brand name through private labeling. Most brands on Amazon use Chinese factories for private labeling and customizations.

Importing from China requires some paperwork, licenses or some documentation.

This Chinese documentation will depend on the products you are importing from china and in what scale. For instance, if you are importing food, drugs or medical devices, you may need to get a product-specific license. Otherwise, it will be pretty hard for you to import these kinds of goods from china. If you want to set up a company in china to facilitate these processes you will need further licenses.

In addition to the product-specific license, you will have to apply for a business license. This is what will indicate the government’s authorization for you to set up an import company in china.

If in the case of setting up a company, you will also need to apply for an export license if importing from china.

Ministry of Commerce
This is in addition to the other two licenses we’ve mentioned above. The procedure for applying an import from china license is as follows;

File your foreign trade operator filing at the Ministry of Commerce People’s Republic of China

Register with the Chinese Customs Authority

Register with the Chinese Inspection and Quarantine Bureau

Register with the e-port

Make a foreign exchange registration with the local state administration of foreign exchange

Before you obtain a license to import from China, there are specific prerequisites that you need to meet. Besides, you all so need to provide all the necessary paperwork to import from china. Obtaining this licenses is not inherently a demanding task especially if you have all the pertinent documentation and knowledge.

First, Select Products importing from China

Sourcing Chinese goods to sell in your retail store gives you access to a wider range of products at significantly lower costs. This can help grow your business and improve your margins—but it’s important to select your offerings wisely. If you’re developing a new concept or aren’t sure what to sell, read our guide to the best products to import from China.

If you’re running an existing operation or building out a developed business plan, you may already know the category of goods you’re seeking to import. But it’s still vital to make sure your products align with the guidelines below before attempting to bring them into your country.

From a profitability standpoint, the products you choose to import should have:

Consistent and sufficient demand
Profit margins of at least 30%–50%
Reliability
Low maintenance requirements in transit, warehousing, and/or storage (i.e., no need for climate control or special handling needs)
No laws prohibiting them for sale in your state or country

Second, Find Chinese Wholesale Suppliers

Once you know which products you’re sourcing (or have an idea of the qualifications they need to meet), you’ll need to find a trade partner to supply them.

The majority of Chinese suppliers you’ll encounter are either factories or trading companies

The difference between these two models matters most for importers seeking a custom product and those looking to buy a range of goods for their inventory.

Aside from those details, the process of importing items from your Chinese supplier will be very similar, regardless of their business model. So if the offer is right, don’t get too hung up on whether the supplier is a factory or trading company.

Third, Where to Source Chinese Suppliers

1. Supplier Directories & Wholesale Marketplaces

Supplier directories are platforms that host information on thousands of factories, trading companies, and other vendors.

Alibaba and AliExpress—which are both owned by The Alibaba Group—are the most notable supplier and product directories for importers and dropshippers alike.

Global Sources is a large trade show exhibition based in Hong Kong and has expanded to provide a vast online supplier directory that’s available year-round.

DHgate is similar to AliExpress in that it serves as a wholesale marketplace more so than a supplier directory. This means it’s product-centric, making it a good choice for beginners and casual importers.

You can also try other directories platforms, and the ones mentioned above are most popular.

2. Trade Fairs.

Attending trade shows can help you find reliable information on possible suppliers and manufacturers. In China, for instance, the ‘Canton‘ fair is the most popular trade show where you can find the information you need. The Canton fair often holds every twice a year.

Other trade fairs in China include:

Global Sources Trade Show
East China Import and Export Commodity Fair (ECF)
Yiwu Trade Fair
Beijing International Auto Show
CPhI China

3. Supplier Network

If you already work with a reliable Chinese vendor but seek another product they don’t supply, try using them as a resource. It’s standard for suppliers to have tight networks and happily refer clients (they often make a 5%–10% finder’s fee).

Forth, Purchase Products

Ordering Samples and Making Your First Order
When you're getting ready to place your first order, there's two things you need to know about: samples and Minimum Order Quantities.

Samples when Importing From China
Once you find a supplier for your product, most people want to order a sample first from that supplier. A sample gives you an idea of the overall quality of the product from that supplier and is normally the last step before you proceed to a bigger order. Your supplier will likely charge you a sample fee as well as the cost of air shipping that product to you (which can be anywhere from $50+)

Minimum Order Quantities (MOQ) When Importing from China
When you're placing an order, almost every supplier will have a Minimum Order Quantity or MOQ. An MOQ is just the minimum amount of a product you need to order from that supplier. Normally it's around $2500 to $5000 worth of product, sometimes lower. This is one thing you can really negotiate with your supplier on, especially on your first order.

Even if you think you're going to sell a billion dollars worth of product in the first week, I suggest making your first order size as low as possible. You want to gradually build up the order size with your supplier over the course of two or three orders.

When you place your order, submit an actual Purchase Order (aka an invoice) that consists of the following things:

Order quantity
Price
Shipping terms, i.e FOB, CFR, EXW (More on this later)
Date the order will be completed

Negotiate Rock Bottom Prices and Low MOQs

Once you determine what a normal cost is for your items you can try to negotiate pricing. However, prices in China are becoming more and more fixed and negotiation is becoming more difficult. A 5-10% discount off of quoted prices can often be significant.

Payment Terms and Making Payments
When you are arranging payment terms with your supplier, the most common terms you will come across will be 30/70. That means you pay 30% when the order is placed and 70% upon completion. You can negotiate the payment methods when you communicate with your suppliers.

What do China freight forwarders do?

A freight forwarder is an individual or company that specializes in the shipment and coordination of goods from one country to another via a single carrier or multiple carriers. This could be by air, sea, rail, or rail. Freight forwarders work on the promise of shipping your goods cost-effectively and in good condition. They offer a range of services, including:

Negotiating freight rates
Booking cargo space on carriers
Preparing shipping documents
Overseeing the packing, labeling, and transportation of cargo
Arranging cargo insurance and doing any follow-up, such as filing insurance claims
Making storage and warehousing arrangements
Collaborating with foreign customs agents to ensure compliance with customs regulations
Offering expert advice on the best possible routes and costs, customs regulations, country-specific trade laws, political situations, and so on.

How to find a good China freight forwarder?

Finding a freight forwarder in china is easy, but sometimes it can be tricky. The common ways to find freight forwarders in China are as follows.

Google Search
This is the most common way to find freight forwarders in China. Searching on Google is always a great way to find almost anything in the modern-day, and it applies to finding freight forwarders. You can search with the right keyword to land up in the websites of freight forwarders, or you can get the guideposts like this to find the freight forwarder.

Trade Shows
Every year in China, you can see many organized trade shows. If you visit such trade shows, you can contact the top freight forwarders, manufacturers, sourcing agents, etc. These trade shows will help you in knowing the freight forwarders in a better way.

Yellow Pages
Yellow pages contain the name, address, and contact details of all the major businesses; hence it is also a reliable and good way to find the freight forwarder for your import business.

Sourcing Agent
The best way to find freight forwarding services is through sourcing agents. The sourcing agents will help you in the end-to-end import business, from identifying the source to delivering the goods to your doorstep.

Also, check our guide for how to choose best China freight forwarder.

It often requires upfront cash to buy goods, costs to ship and transport the goods. It also requires storage and delivery to the final destination once goods arrive at the destination port. This chapter, therefore, aims at providing some insights on some of the costs of importing from China.

The Main Importing Costs from China
As you can already tell or may already know, importing from China involves a myriad of costs. These costs arise from the supplier’s warehouse in China to the delivery of goods at their final destination.
These costs include are but not limited to;

Cost of the Products from a Chinese Supplier
It also includes the cost of:

Packaging, Loading, and Transporting, the goods to the port of departure.
Local transportation (from supplier’s base to loading port) is not that expensive. A 20 GP FCL container costs at most USD 500 to move, depending on the distance of the supplier to loading port. In most cases where you purchase goods on FOB terms, the supplier in China will take care of this cost.

Cost of Shipping
Often referred to as “freight cost”, this is the cost you incur to move goods from loading port to the destination port. Frankly, this is the most complex part of it all as it’s more inclined towards the local charges, paid at the destination port. The cost for shipping, largely depends on the distance from the origin to the destination as well as the mode of transportation used. In this case, importing from China to the USA by sea will cost less than importing from China to the Philippines. Similarly, shipping by air to the same destinations will also cost more than it would if you ship by sea.

Tax and Duty for Goods Imported from China
In every country, most imports are subject to tax and duties. Take for example, other countries like the USA, goods from China are subject to anti-dumping measures. In this case, importers may be required to pay high additional duties for products to be allowed entry into the country.

The tax and duty rates vary accordingly. Some countries impose high taxes for imports while some remain reasonable. Some have tax exemptions for specific imports. In this case, it is essential to familiarize yourself with the tax and duties regulations in your country before importing.
F U.S. President Donald Trump signs executive order imposing tariffs

Storage and Distribution Costs at Destination
If you don’t have a warehouse of your own, you may need to use a hired one to store your goods from China. This is only if you are not distributing the goods immediately. In this case, you will have to pay for storage costs as none of it is free.

Distribution charges may also arise in case you are using hired trucks/distributors. Generally, there is a whole lot that goes into the final cost of importing from China. And, as I’ve told you, the cost of importing from China is not limited to these aspects alone.

Warehouse

You may incur other costs too like;

Possible cost for import licenses
Customs bond costs especially for US importers
Insurance costs
Factors Affecting the Cost of Importing from China
The cost of importing from China is subject to some factors. Moreover, importing requirements tend to be specific to an importer. From the kind of products, type and mode of shipping, destination, etc. all these vary with individual importers. Because of this, therefore, the cost of importing from China differs significantly from one customer to the next.

Note however that certain major factors influence the overall cost of importing goods from China.

Below given are a few such factors;

Means of Transportation
The means of transport you choose for your imports from China contributes largely in deciding the overall cost of importation In this respect, note that transporting imports can not only be done by moving them across the ocean, air, or rail. Inland transportation, which involves moving goods from port to final destination also makes part of the importing cost.

Most reputed shipping companies offer mainly two types of transport methods. These are shipping from door to door or from port to port.
Here, you have the option of choosing whichever service best suits your shipping needs and budget.

Mode of Shipping
The shipment mode is another factor that affects the cost of importing from China. As I told you before, there are many modes of shipping from China. You can ship FCL if you have enough goods to fill up a container or LCL if not. You can choose reefer shipping for temperature sensitive cargo or OOG shipping for oversized and irregularly shaped items. If you are shipping wheeled cargo, Roro is the best mode of shipping to use.

If you are into the dropship business, drop shipping would be best. All these shipping modes are provided as services by most companies in China. So naturally, some shipments cost more than others. For instance, shipping FCL will cost you more than it would if you ship LCL. Likewise, the kind of goods as in the case of reefer shipping and OOG shipping will also cost you more. Besides, you may have to pay additional costs for insurance when shipping such fragile and expensive items.

Distance from Origin to Destination
The shipping distance from China will also largely influence your cost of importing from China. The overall travel distance and the difficulties can affect the cost of importation.

Sea route from China to USA
In this regard, therefore, it is advisable that you thoroughly research the destination you intend to import to. This will help you understand what costs you may incur and in what range.

Customs and Taxes
Customs and taxes account in the overall cost of importation. Every country, note, has its own customs regulations. So, in essence, the cost of this will depend on the destination to which you are importing to from China. Remember, that taxes and duties are charges that must be paid before goods can be allowed entry into the importation country. To ease the stress that comes with this, it is best to book a customs brokerage service. Although this will add to your overall importing expense, it is worth it as it will free you from a lot of stress and problems with customs. To get some savings, it is wise that you choose a shipping company with experience in shipping to your destination.

Other Factors
In addition to the factors mentioned above, the following elements also influence the total cost of importing from China.

The time of shipping
the demand and supply at the time of shipping
congestion charges at the destination port
currency adjustment factors
fluctuation in fuel prices
It is, therefore, necessary that you know what options you have when importing from China to help in mitigating these costs.