Import household products from China

 

Today, China has become a great productive power, and importing from China has proven successful for many businessmen and import specialists, which makes importing from China a great opportunity for you, but it is a great challenge at the same time if you do not know all the big and small things related to importing from China. It is a process that involves many details, especially for beginners.

 

And if some considerations are not taken into account, it may cause big losses, due to long distance, high shipping costs and customs fees, as well as unexpected delays which often happen for many reasons, so let's start knowing all the details of how to import household items from China.

 

content list:

1. Learn about import laws in your country.
2. Choose the product to import.
   1. The advantages of importing household items
   2. China home appliances factories
3. Calculate shipping costs.
   1. Important Terms in International Trade (Incoterms 2022)
4. Find your supplier in China.
   1. Most Popular Places to Find Suppliers in China
5. How to deal with your supplier?
   1. Payment Terms
6. Shipping and logistics.
   1. Shipment methods for freight
   2. Shipping documents
   3. HS Code 2022  
7. Track your shipment.
8. How to receive the products from the supplier?
9. Don't make costly mistakes when importing from China.
10. Are you ready to import household items from China?
11. Conclusion

 

1- Learn about the import laws in your country

 

In the beginning, check if you have the right to import and obtain the necessary permits, and the laws in this regard differ from one country to another, but whatever your country, you must obtain all the necessary documents as an importer and register with the importers' registry in your town.

 

Then get acquainted with the customs procedures that you must clear upon import, and review the goods that the country allows to import. So that you can import from China and clear customs goods without any problems.

 

When choosing goods, make sure that they are not prohibited or restricted in your country, as countries interfere in international trade by controlling the import movement in three ways:

• Import ban.
• Restricting the volume of imported goods through so-called dumping duties.
• Monitoring the import of goods with licenses.

 

For example, there are many countries that ban the import of some products, such as:

• Animal skins.
• antiques.
• asbestos;
• Biological materials.
• Dangerous goods or combustible hazardous materials.
• Firearms or parts thereof.
• Items that can be used as weapons.
• Ivory.
• jewelry.
• military equipment.
• Perishable material.
• Metals and gemstones.

=== Pay attention ⚠

Be careful because China is the home of many counterfeit goods, and it is a very bad idea to import counterfeit products, as they may be confiscated at the border before entering your country if one of the countries that do not allow the import of counterfeit goods.

 

2- Choose the product to import

 

If you want to become a successful importer, you must select the goods you want to import well, and the main consideration here is to choose a product that you can sell, and the best here is to choose products that you know a lot about, and know that there is a good market for those products, while determining your profit margins.

 

And those are the Specifications you should consider about the product:

• The product should be distinctive so that it can be sold at a high price.
• Ensure that the product is one of the goods allowed to enter your country, in many countries it is not allowed to import some goods, and you can check the restrictions, regulations, and laws set by your country, as importing unsafe goods may lead to penalties and fines, and these goods may be detained or destroyed.
• Classify the goods and calculate the shipping cost.

 

And when choosing household items to import from China, some criteria must be taken into account:

 

• China's quality standards may differ from other countries, the famous principle there: "You get what you pay"
• China has different standards regarding intellectual property, and many counterfeit products are common.

 

The advantages of importing household items from China

 

1. China has lower manufacturing costs for household appliances than others: which means you can make a higher profit margin and earn more money than other countries.
2. The high quality of Chinese products: There is a false myth about the low quality of Chinese products, and in fact, often China manufactures products that are higher in quality than others made in European countries, but there is a popular principle there that you get what you pay, so don't look for cheap products.
3. Household appliances are characterized by the possibility of importing them in large quantities and the low shipping cost per piece, because Chinese factories are giant structures prepared to manufacture large groups of products, which makes the cost of one piece decrease, whether in terms of manufacturing or shipping.
4. You don't have to travel to China to get the products: all Chinese suppliers have English websites and sales catalogs and many of the staff speak English.
5. Importing from China is safer: it is the 32nd safest country to import.

China home appliances factories

In China, there are fully industrial cities specialized in the manufacture of household appliances. The most important of these cities are, for example:

• Foshan City.
• Chessy City.
• Quanzhou City.
• Jiangsu City.

 

Here, you should pay attention to a very important point, which is to buy from suppliers and manufacturers of major and reliable brands. Otherwise, you may face quality problems.

 

In order to choose the right factory to import from, you have to know the types of factories so that you can evaluate the quality of the goods they offer you.

 

== ATTENTION ⚠ TO INTERNATIONAL TRADE TERMS:

 

OEM Factory

OEM stands for Original Equipment Manufacturer which means that the factory or company manufactures products and sold them under other brands' logos, and in China, there are many factories that provide OEM service, which means that the products are made according to the designs and specifications of another company, so it is a manufacturer working for another company. OEM is usually considered a service.

 

ODM factory

ODM stands for original design manufacturer, which means that the manufacturer provides pre-production services, such as product concept development, design, engineering, and manufacturing of finished products, and the importer logo is used.

OBM factory

OBM stands for Original Brand Manufacturing, which means the manufacturer owns the brand and is fully responsible for product design, engineering, manufacturing, and marketing, OBM is the only choice for high-end products that require integration of design, engineering, and manufacturing activities.

 

The difference between OBM, ODM, and OEM

In each of the three systems, the factory manufactures the product, while the distribution of responsibilities varies between the factory and the buyer according to the following table:

 

3- Calculate shipping costs

There are many shipping systems that are used in international trade, and FOB is the most common, but whichever shipping system can be agreed upon, the importer should know:

• The price of the product from the supplier.
• Shipping fee from the shipping agent.
• Customs clearance fee, tax fee, and transportation until the products reach your warehouse.

 

== It is unfortunate that you can only get accurate costs after your shipment arrives, but you can use the specialized companies to estimate costs as accurately as possible.

 

== On the other hand, you should expect unexpected costs for changing circumstances that may occur during shipping in anticipation of other scenarios that you should make sure to take into account, and after your shipment arrives, you can compare it with the estimates you made previously to know the value of the increase and decrease to help you in the upcoming shipments.

Important Terms in International Trade (Incoterms 2022

 

4- Find your supplier in China

How to find suppliers in China?

 

• China is a safe country to import from, but you have to be careful and your task is to ensure the quality of the products and ensure the reputation of the supplier, so you should search for suppliers for the commodity you want to import, and once you select your supplier, ask him for weights, dimensions, and purchase duration, and you should pay attention to the following points:
  
  
• Ensure that the supplier agrees to shipment under the terms of FOB which means delivery on board, meaning that the seller must load the goods chosen by the buyer on board the ship, and the seller must clear all procedures for export. This greatly reduces shipping costs and gives you more control over the shipment.

=== For example, if you are going to import from China and your nearest supplier port is Shanghai then you will ask for shipment according to FOB Shanghai terms, if it is a trial or small shipment you can ask for shipment according to EXW terms.

 

• Keep in mind that ocean shipping is very slow and therefore requires long-term planning compared to other shipping methods, taking into account the time required to obtain the necessary documents, inland travel, customs clearance, and port handling.

=== In general, specialists recommend placing your order within at least 3 months before you feel the need for the goods.

Most Popular Places to Find Suppliers in China:

 

• Alibaba: Alibaba website is a directory of factories and suppliers in China, and even Chinese companies use it.
• Global sources: It is one of the most popular sites that you can search through.
• 1688.com: The basic Chinese version of Alibaba.
• Canton Fair: It is the largest trade fair in China and has been held for more than 50 years, and during the spread of Corona, any foreigner was prevented from attending due to the precautionary measures taken by China to prevent the spread of COVID-19.
• Yiwu: contains more than 200,000 suppliers.
• Trading companies and supplying companies: Some avoid them because of their high prices by 5-15%, but they are characterized by having high-quality standards with regard to the products they supply.
• Tracking competitors: Sometimes some people follow a method of searching for suppliers which are to follow their competitors and import from the same supplier that the competitor is importing from.
• Manufacturers (Products factories): The idea of ​​importing from factories is a good idea because you will get a lower price, of course, and the communication between the importer and the factory is direct, which ensures a higher degree of accuracy regarding specifications and delivery times.

But before buying online, make sure the supplier is reliable by purchasing products bearing the names of famous and well-known brands, and agreeing with the supplier on everything related to payment, receiving, and shipping.

 

Is it better to deal with a trading company or the factory directly?

 

• Factories have lower prices than those sold by trading firms.
• Factories are characterized by direct communication, which means more accuracy in terms of specifications and delivery times.
• But the quality specifications must be discussed in detail because some factories have lower quality controls.

 

This does not prevent the existence of advantages to buying from a commercial company, such as the possibility of purchasing smaller quantities of the product, and the diversity of products that you can import.

 

Don't do that while you are looking for a resource:

 

• Don't always look for the lowest price, there are many other criteria that may be affected as you hunt for the lowest prices in China, perhaps quality, quantity, or reputation.

=== But what you should look for is a reliable supplier with whom you can grow in a healthy way.

 

• Don't hide the details you need about the product you want to import from the supplier, as this may increase your chances of receiving a product you don't want, and the manufacturer may make a decision for you to save costs.

=== So check the raw materials and manufacturing process of each quotation so you can feel confident in the products you purchase, by checking product specifications with the supplier, including packaging, and on some goods, you can also request samples for inspection.

• Don't show mistrust towards the supplier you're dealing with, if you don't trust your supplier they won't honestly help you when a problem arises.

5. How to deal with your supplier?

 

Matters must be discussed with the supplier:

 

After choosing the supplier, you should discuss some things with him before moving forward with the completion of the transaction, such as:

 

Minimum Order Quantity (MOQ)

When placing an import order for a supplier, each supplier has a minimum order quantity, which is something you can negotiate with the supplier about especially if it's your first order

 

Often importers reduce the size of their first order as low as possible and then gradually increase the size of the order over the course of two or three orders.

 

When applying for import the import application must include the following items:

• order quantity.
• price.
• Shipping rules FOB, CFR, EXW
• The date the application is completed.

 

How to negotiate prices and lower the minimum?

 

First, you must obtain multiple quotes from three or more suppliers.

 

In China there is a golden rule that quality is directly related to price, meaning that the price is exceptionally low, and its quality is also exceptionally poor.

 

Attention⚠: Some suppliers may use ways to reduce prices, including:

• different shipping terms like EXW instead of FOB.
• The minimum order quantity is significantly higher.

 

Second, You have to determine the prices of your items. You can start negotiating prices, put in mind that prices are more fixed in China, and negotiation is also becoming more difficult, but you can try negotiating a price reduction of 5-10%, while you can negotiate on Minimum order Keep in mind that you are initially and therefore don't have a lot of paperwork to start negotiating, but international trading companies usually take care of long-term partnerships and you can really increase your order gradually after that.

 

Payment Terms

 

The method and means of payment must be agreed with the supplier, and there are many methods and means of payment that you must familiarize yourself with before agreeing with the supplier, and the following are the most popular methods and means of payment common in international trade.

 

Common payment methods in international trade

These methods are used in international trade in general and when importing household items specially:

 

First - Cash in advance

In this case, the importer pays the entire agreed amount to the importer's bank, which in turn pays to the bank of the exporting country, which is the method preferred by many suppliers, as it overcomes the importer defaulting on the supplier's dues.

 

One of the major drawbacks of this method for the importer is that many importers cannot afford to pay upfront, as it may affect their cash flow, and may be concerned about not getting their shipment.

 

For the supplier, one of the main disadvantages of this method is that he may receive fewer orders, and he may lose some customers, so it is better for him to follow a less strict system because the importer usually looks for suppliers with a more flexible payment system.

 

Second - Letter of Credit

It is one of the most important methods of payment in international commercial transactions, in which the importer opens a letter of credit through the bank, and it has more than one type: including revocable and irrevocable letters, in which the two banks carry out the procedures for receiving documents and the value of transactions.

 

This method achieves a great benefit for the importer who does not have to pay until receiving the ordered goods, and it is the most risk mitigating method for the supplier and exporter, but the most important drawbacks of this method are the costs of bank commissions and letters of credit, and it also includes procedures that take a long time and are difficult to manage due to the presence of other parties other than Importer and supplier.

 

Third  - (Cash Against Documentation / Documentary Collections)

It is the method by which the shipping documents are sent from the supplier to the supplier’s bank, and the supplier’s bank sends these documents to the importer’s bank, after which the importer pays the value of the goods in return for receiving the shipping documents from the import bank, which in turn sends the importer’s deposit to the supplier’s bank and then to Supplier Bank.

 

Fourth - Open Account / Cash Against Goods

It is a method whereby goods are shipped and delivered before payment, so it is a very attractive option for many importers, as it allows them to maintain cash flow, while many suppliers do not prefer it due to the risks they may face.

So suppliers use this method with importers who have a good reputation, or with whom they have a relationship based on trust, or it can be with goods of relatively low value to reduce risk.

 

Fifth - 70/30 payment terms

When you arrange payment terms with your supplier, the most common terms are 70/30 which means 30% payment when placing the order and 70% when it is finished, it is not recommended for the importer to accept a shipment that requires 100% deposit unless the order is small (less than 2000 dollars, for example.

 

Sixth - Alibaba trade assurance

It is one of the safe methods used by many in the event that you order goods worth less than $ 2000, a service provided by Alibaba that means that your order is insured so that you can get your products, your supplier usually accepts payment in this way, and this ensures that the supplier ships the required quantity As agreed, but make sure you choose the supplier well.

 

Seventh - Consignment

It is a method very similar to the open account, but the difference here lies in the date of payment. In the open account method, the importer pays the price of the goods to the supplier as soon as the shipment arrives, while here the importer pays the price of the goods after selling them to the final consumer.

Therefore, this method involves high risks for the supplier, and the supplier must ensure that he has adequate insurance coverage in case the importer, God forbid, does not pay for any reason.

 

Arrange the transportation of your goods from the supplier

 

To get a full picture of shipping costs, there are many costs associated with shipping goods including container fees, packaging, handling, and brokerage fees.

Once you get a shipping quote you can send your contact details to the supplier and stay in close contact with them to ensure your shipment is moved quickly and securely.

 

Attention ⚠

 

Keep in mind the delays that may occur due to the goods not being produced on time, the ship may not sail as scheduled, and the goods may be held in customs so be prepared and plan, and keep in mind that the goods will not be ready for shipment once production is finished in the factory.

=== Transporting the goods from the factory to the port may take one or two days, and they may remain in the port for one or two days until the customs declaration is completed.

Choosing a good freight forwarder, as shipping costs include both direct and indirect costs of transporting it from its point of origin to the market

=== Choosing a good shipping agent or a company that specializes in managing logistics may be a good option that saves you wastage and high costs.

 

6- Shipping and logistic services

Shipping and receiving your goods is one of the most stressful and challenging aspects of importing.

Shipment methods for freight

There are three ways to ship your products:

 

 

=== With FOB terms, the supplier pays all transportation costs from factory to port of shipment, while the EXW system will cost you more than FOB, because it includes all transportation costs within China to reach the port of shipment, usually more than 300-500 dollars, So it is always preferred to ship by FOB terms.

 

Shipping documents

 

Documents prepared by the importer

 

1. Commercial & industrial register: includes information about the import company and its license to carry out its activity.
2. Import license: this means that the importer is allowed to register to obtain import rights, and the competent authority is allowed to control imports.
3. Tax certificate: It is one of the most important documents necessary for customs clearance and is granted by the Ministry of Taxes to the importer to give him the authority to practice his commercial activity.
4. Customs license: It is a card issued by the Customs Authority, on which the tax number of the importer and his customs activity are indicated.
5. Authorization for a customs broker in case he is used to clearing the procedures.
6. A document from the bank proving the value of the transfer to the supplier, and is one of the most important documents for customs clearance in some countries.

Documents should the supplier prepare:

Letter of Instruction

It is a summary, that includes the shipment instructions. Such as items, weight, value, and handling requirements. The shipping letter acts as a limited legal power of attorney for your shipping agent in certain procedures involving carriers, ports, cargo insurance, and customs.

Bill of Lading

It is a document issued by the shipping company, which is a binding agreement between the supplier and the company, and it includes the origin, destination, date of shipment, number of pieces, weight, and details of sizes.

Packing List

While the commercial invoice focuses on the financial transaction, the packing invoice focuses on the number, measurement, and weight of units shipped, so that all parties can verify the goods throughout the shipping period, and is the original document by which to verify that there are no discrepancies with the commercial invoice and bill of lading, And the goods already received.

Commercial Invoice

It is one of the customs documents issued by the supplier to the importer. It is proof of sale between the seller and the buyer. It does not have a unified form, but in the end, it must include the following elements:

- The name & address of the buyer and seller.

- Detailed description of the goods.

- The country of the goods manufactured.

- Harmonized system code for the item being shipped (HS Code)

- The price of the goods.

- terms of sale.

 

The commercial invoice is one of the most important documents required for customs clearance, and any inaccurate information in it can lead to legal problems and long delays in shipments.

 

HS Code

 

The Harmonised coding system is a system that uses an international code to classify products. With the mention of the HS code for the product, you have described it without the need to mention his name.

 

We can liken the Harmonized Code in the international coding system to the national code printed on the personal cards of individuals, You can  understand HS code as follows:

HS Code 2022  

HS Code  2022 is the seventh version of Harmonised coding and has been accepted by all contracting parties to the Harmonized System Code, and is the basis for tariffs and all international trade statistics.

The 2022 HS Code includes new updates on some products and you can download HS Code 2022.

 

We can illustrate HS code as it includes 12 digits, the first 6 digits from the left are standardized numbers at the international level, and the other six digits are determined by each country, and you can identify them in your country through the ministry of trade website, and the following are links to HS code 2022 in some Arab countries as an example:

2022 HS Code in Saudi Arabia

2022 HS Code in the UAE.

2022 HS Code in Egypt.

 

Certificate of Origin

It is one of the most important shipping documents in international trade, and it is used to identify the country in which the goods originate, it is issued by the official organizations in the country, and it determines the fees applicable to the shipment.

7. Track your shipment

 

Shipping the goods internationally takes more time, and the consignee is often notified within 5 days before the goods arrive at the port, you have to prepare the documents before the goods enter the port.

The documents needed differ from one country to another. So make sure to prepare the required documents in Your country, consider these specifications in your documents:

• A clear invoice of the goods you are importing.
• The exact quantity for each item.
• Marks and numbers on each package.
• Show these signs and numbers on your invoice the same on your goods,  which in the packages.

8. How to receive from the supplier?

 

The phase of receiving the goods from the supplier in China is one of the most important stages. It is the stage in which the required goods are received from the supplier’s warehouse or factory in China, and then the quantities, weights, and shipping data are reviewed in full, and to ensure that all the data contained in the contract are followed.

 

This stage includes the process of examination and inspection to ensure the quality of the product, a process carried out by agencies and laboratories specialized in examination and inspection, the most important and famous is SGS, in order to ensure that the product conforms to international specifications and conforms to the specifications of the country to which you are importing. shipping process.

 

The goods are received at the place agreed upon in the factory or at the port, and you can receive the goods through one of the ways:

• Travel and pick up the goods yourself from the supplier.
• Receiving the goods through an agent in china or sending an agent from your company.
• Receipt of goods by contracting with a customs clearance company.

 

Here, arrangements must be made for customs clearance when the goods arrive, and if all goes well, you are entitled to receive your shipment.

 

Once the goods reach you, check the quality, packaging, instructions and labels on the package. It is best to send an email to your supplier to inform him that you have received the goods but you have not reviewed them yet, and you can tell him that you will contact him as soon as you finish reviewing it.

 

Don't make costly mistakes when importing from China

Before you consider importing wholesale products from China, there are some questions you should ask yourself before starting your business:

• Can my imports from China bring me a good profit margin?
• Are Chinese imports of the required quality in the market in which I work?
• Is it easy to deal with and communicate with suppliers?

 

All these questions can help you determine the goods you want to import, the specifications you want to have, and the suppliers from which your goods can be imported.

 

There are also some sub-questions, for example, are my goods marketable from the questions that fall under many other questions, such as:

 

• What makes importing that commodity unique in my market?
• What are the product's benefits and economic characteristics?
• Can my import from China last for a long time or not?
• Is the product I'm importing profitable?
• What is the profit margin per unit I import?
• What is the return on investment?
• What makes importing Product(s) successful in my market?

 

There are also a few matters you can consider such as the seasons and offers that some suppliers offer for Chinese New Year or Lunar New Year, which is one of the most important celebrations in China.

Are you ready to import household items from China?

== Here are these tips:

• Plan your goals well, you must be clear with yourself about what you want to achieve, perhaps you are looking for a supplier in China to find a cheaper source, or you are trying to import a product that your customers demand and want to import for them, in any case, try to fit what you import with your business plan the public.
• Identify a trusted supplier: Check and verify your supplier, make sure that the product he offers meets your quality standards, and try to establish a strong relationship with your supplier by building a long-term relationship based on mutual trust.
• Negotiate to get the best deal: You must understand your strengths and weaknesses, as well as your supplier's priorities to negotiate and get the best deal. In Chinese culture, business partners believe that you must build a relationship. If you succeed, you will pursue business transactions. The goal of developing those relationships is to build what the Chinese call " Guanxi" which means that business ties are based on mutual interest and benefit.
• Reduce risk by having a clear contract that specifies exactly the terms of payment and delivery. The use of internationally agreed incoterms helps reduce delivery risks and issues or misunderstandings. The contract must include the payments required, the currency in which payment will be made and the method of payment to be used Shipping details should also be specified, will you handle yourself or will you outsource.
• Make sure that you have the necessary permits from your country, the rates of fees that you have to pay, and the import policies, by searching for the import guide in your country. There are also value-added taxes and controls for some goods that you must study in order to work on them.
  
  

Conclusion

 

Chinese factories are still the most important factories in the world despite the growing tensions with Western countries. And despite attempts to show Chinese products as inferior, the reality is that the quality of Chinese products is great compared to competing products, and the golden rule in China is to pay for what you get.

 

So you still have a good opportunity to develop your business, and now you have a comprehensive guide to import household appliances from China helping you, so feel free to contact us if you need any help.

 

E-commerce has boomed in recent years, and it has become more and more popular after Covid-19, but the greater the opportunity comes with greater competition. The first step may require a lot of hard work, but implementing what you learn is the only way to succeed, and beware of getting caught up in the minute details.

 

=== take a small step every day on the road to achieving your dream, and don't be afraid to make mistakes, but learn how to overcome them next time, mistakes are part of entrepreneurship, learn from others and learn from your mistakes too.