The separate import process can be complicated. Doing so in a country that speaks a completely different language and has completely different rules and regulations can be even more overwhelming.
China is the largest exporter in the world, whether you are a new importer from China or an experienced importer, you need to pay close attention to certain details that may affect your imports. Below is a list of the top 5 mistakes made when importing from China.
1. Don't know the way of doing business in China
You cannot do business without proper communication. This applies to any merchant from any country trying to make a business deal. China is a vast country with many different cultures, customs and languages. There are at least eight different language groups, not to mention hundreds of dialects. The official language is Mandarin, but that's not to say you need to be fluent in Mandarin to do business with a Chinese businessman (although this will help a lot in your case). However, if you want to build a long-term relationship with a Chinese businessman, going beyond basic introductory phrases can be very handy.
Also keep in mind Chinese culture and the way of doing business. What may seem polite to you may be rude to the Chinese, and vice versa, and you definitely don't want to lose the deal with an easily avoidable misunderstanding.
2. Not investigating applicable rules and regulations
Knowing the trade rules for the products you import is part of any import or export process. But when importing from China, it is best to take extra precautions. It is not uncommon for Chinese suppliers to produce goods that do not meet international standards. In fact, it has been reported that only 5% of Chinese suppliers in some industries actually meet the guidelines implemented by the EU.
Depending on your import destination, we recommend that you properly investigate not only the importing country's import laws, but also the regulations that apply to the product. This way, you know exactly what to look for when choosing a supplier in China to ensure that the products you import meet the correct standards. This helps prevent customs clearance and delay issues. Your country's chamber of commerce and customs office is a good resource for product guide information.
3. Selecting the wrong Incoterm
Incoterms are a clear set of conditions that both importers and exporters are obliged to comply with in any international transaction. This prevents misunderstanding and confusion about costs, risks, management and responsibilities. When importing from China, it is highly recommended to pay close attention to the pros and cons of the Incoterm you choose.
The three more common Incoterms used for importing from China are FOB, CIF and EXW Incoterm. However, each of them has advantages and disadvantages that can play a significant role in your total import cost. CIF Incoterm seems to be the better option because of its low cost and relatively less responsibilities. But this can backfire because with limited control, you'll most likely have to kowtow to all supplier decisions, which can end up costing you significantly. In general, we recommend choosing FOB Incoterm as this gives you more control over the entire import process and its costs.
4. Choose unreliable suppliers
As an importer, you are responsible for the products you import. This means that you are responsible for customs if anything goes wrong with your imports, and you are liable if your products cause harm to any consumers. That said, it is very important to choose a reliable supplier from China.
Before entering into an agreement with a supplier, make sure you have done proper research on their production process. This means knowing where it gets its material and even talking to other importers who import the same product or deal with the aforementioned suppliers. You may also want to visit the production site in person for extra assurance. Consider bringing in an expert who understands the production process of your imported product, so he can advise you on potential problems that may arise.
5. Not planning ahead
Time is an important consideration for any import you make from China. Any one of the above mistakes alone can cause a lot of delays and disruptions in your logistics chain, let alone two or more of them. With these in mind, always start planning your imports from China and allow extra time.
Ideally, you should book your cargo at least a few weeks before your vessel sails. This gives you extra time for your origin agents and suppliers to prepare all the required documentation in a timely manner, prepare for shipment, and allow a buffer of time should something go wrong. For the best shipping times and minimize hiccups, always check with your freight forwarder for the best ocean freight rates.
