I have spent some considerable amount of time doing research in importing products from overseas.  Fortunetly I have also followed through and actually imported a significant amount of product for my sites.  I can honestly say that each vendor is a work in progress and an actual journey of learning how each factory works and the strengths and weaknesses of each company.  With some companies, understanding the culture is a huge advantage.  At times I do things backwards, I get the actual experience and then find a decent book that helps me out after the fact.

This book I can highly recommend since it pretty much mirrors my experiences with a particular company in China.  I would even go as far as to say that it is a must read.  If you are considering importing products to sell online, this would be a very inexpensive addition that can save you a lot of aggravation in the long run.  In case you are wondering, it is not a dull dry boring business read either.  The story (and lessons) have characters and give valuable insight into doing business overseas today.

Another good read

If you inventory products for your ecommerce site finding a good solution for shipping and storing your products can always be challenging.  Most warehouse the items yourself and spend lots of time “touching” your products.  So what is “touching” and how does it cost you money?

The typical scenario

You bring in goods from overseas and they get off a boat and are trucked to your location.  You (the receiver) unload and move them into a warehouse.  Generally you will spend some time inspecting your inventory and organizing it so that you can pick your items and ship in an effective manner.  Sometimes if the packaging is not complete, you many find yourself repacking or re boxing items for final shipping.  So here is how the “touching” is applied

• Unloading it off the truck, you have to do this
• Into the warehouse
• Organizing in the warehouse
• Possible repacking
• Final pick for shipment to the customer who ordered it

This is five times that the item is touched, moved, processed or handled.  If you are smart, you most likely have an employee do this work, which means you pay the employee and manage the process.  Not counted here is the managing of the items coming from port and getting to your ware house that is a separate discussion.  The warehouse cost is also not included in the cost at this particular point.

About 8 years ago I was looking for a way to supplement my income.  I worked for the airlines, which most people think is a good job.  However contrary to popular belief, even if you are in the cockpit, you are expendable and subject for dismissal at the moment fuel prices rise, but that is another story.

So there I am, no work and mouths to feed.  I had been selling children’s tables and chairs on Ebay for a while and it was going very well.  By the way, very good market here, the most powerful demographic online today (hint, foot stomp, wink)  But, the problem was, I could not make them fast enough in my basement to sell enough to live on. Somewhere along the way I needed a router table to make a better top and chair sides, so I built one.  I eyeballed that thing and thought I might be able to sell it better.  So I made a bunch and sales pick up.

I really needed some inserts for the table and was not able to find any.  I found a great website called “Global Sources” and found a company in India that did the Acrylic work I was looking for.  I stumbled onto this and wonder how I made it happen.  I ordered the parts, and had them shipped  to my nearest port of entry.  I will now give you highlights of all the dumb mistakes I made so the story keeps moving.

• Acted as my own freight forwarder, knew nothing about customs
• Screwed up customs form
• Had to drive to port three different times
• My goods had to be warehoused while I figured out how to get them out, I paid huge warehousing fees
• Went to load my goods into my pickup and warehouse strictly forbids loading your own goods
• Finally got items into truck and drove away not realizing that customs does not put things back the way they found them, lid to crate blew off half way home on the highway somewhere in Maryland. (if you were behind me, uh, sorry)

Despite my stupid mistakes I decide to bring more in a year later.  Do you think I used a freight forwarder this time?  Nope, I wanted to save some money.

• I did a slightly better job with customs
• I still had to pay some warehouse fees to some guy name Lou
• The port in Philadelphia is very scary, bring large friends
• I ended up paying the same price to bring something in, as I could have for retail
• Don’t try to skimp and save money, bring in a lot of goods and do it right, lesson learned

Ok now I am up to bat about 2 years later.  I have a website and want to expand my product line, so I contact another Chinese company and make arrangements.  This time I hire a freight forwarder.  You basically give them the order details and tell them to notify you when it gets here. (yeah, pretty easy)

• I ordered 10 pallets worth (called LCL, which is less than container load)
• I have to wait till truck comes which takes longer
• When truck driver comes, truck driver does not want to wait while you unload your stuff. Truck driver gives you evil eye if you don’t have forklift and muscle. (pallet jack too)
• LCL loads are prone to damage since more hands touch your stuff, I had many destroyed boxes by careless forklift drivers.
• I am learning, so this is better but I paid too much to the freight forwarder.

Now I am acting like the executive I think I would like to be.  I consider ordering a full container since I want to have less damage and get more product for my money.  I still work with same company but I have to hammer on them for quality control, lots of mistakes coming out of Chinese factory.   I order the container, but get little response from my manufacture overseas.  Why you ask?  Well it’s Chinese New Year, and basically everyone takes the month off, good luck.  Eventually I get going and give my order to the freight forwarder.

• Order comes, but the container is sealed with some kind of bolt not even Hercules can break (bring a hacksaw or grinder, just in case)
• I hire college kids with stronger backs and less sense than me. (they need money)
• I rent a forklift and pallet jack and even a friend who can drive a forklift
• We unload in less than 2 hours to my happiness.
• Everyone goes home and I am happy.
• Then the freight forwarding bill comes with surprises, a rate increase and fees not mentioned. Yep, time to find a new company.

The next order is a container from my same manufacturer and 10 pallets from a new company for two separate shipments.  This time I do more research,(I am big on research now) and hire a sourcing specialist.  I tell him my woes of poor quality, long delays and high prices.  He connects me with the right people who know what they are doing.  My sourcing agent actually goes to China, and goes straight to my manufacturer and hammers out new agreements.  He saves me money, time and grief.  I spend  less money, but he takes a small fee and so it’s like spending the same money without grief.  I now have our goods shipped to a fulfillment center, after the container hits port.

• I don’t worry
• I don’t lift boxes
• I don’t think about customs
• I don’t have to give money to a guy named Lou

Yes it is funny when I think about it now, but it is a life lesson.  The bottom line, don’t step over a dollar to pick up a dime.  Sourcing products from overseas can really bite you and cost you some serious dollars if you are not careful.  Learn about Chinese culture and how to build up relationships with factories overseas, this will help you in the long run, but that is another article.

Another example of using Global Sources. This is an excellent overview that shows how legitimate this company is. We personally have used this website to source one of our Ecommerce sites with great success. It is all about building relationships with overseas manufacturers one at a time, just as you would locally.

Some Key points to remember and note

• This is a trusted source since 1971
• They give the right information in the right format
• Global Sources understands buyers and Suppliers
• There is a ton of information
• And the major value of that information is the content they provide and the ideas that it can spawn.

If you are interested in learning about importing products from china, this is part one of a series of videos that we have pre viewed to help you.

This video is more or less a preview of a 2 1/2 long lecture on using a company that we have featured called Global sources. There are several takeaways from the video even though the speaker is somewhat dry and does not know how to work the crowd.

• Look at the crowd in the room, this shows validity and interest.
• They are gearing it towards “importing 101″ which is what you are looking for
• Although they do not give much information, we will follow it up with material that relates.
• by viewing the video, it may trigger an idea or thought you would not have normally had.

I set out one day to find out how certain sellers were able to sell some items on Ebay so cheap. I thought, “Where are these guys getting this stuff?” The answer is overseas. Even then, it took me 6 months to figure out where they were getting some tools and how I could get them too. I learned a lot of valuable facts along the way. A lot of them I learned the hard way so I will try to enlighten you along the way.
First off, a tremendous amount of items are made overseas. Some people get their jaws tight about buying something made in a foreign land. I say get over it. This is business, and labor costs are cheaper overseas. I find that quality varies and have developed a good technique to find out about it. I think China in particular gets a bum rap. I find the people there so accommodating to work with and very genuine. There are few things that you need to know to find out if it’s worthwhile for you to import items. Yes things are cheaper but not always worthwhile.

To me, importing products is the future. You would be amazed at the items that are imported today. Importing and exporting are huge parts of the economy. Taking advantage of world markets makes you a better business person. A good example of this would be in China. China rules the juvenile furniture market. If you’re going to try and compete with them you will certainly fail. You can always import your furniture for cheaper from China. I do not import my children’s sets from China for one reason and one reason only. I cannot store the quantities that I need to buy to make it worthwhile. I can buy chairs for example, but they come assembled and take up considerable room. Now I don’t want to keep 800 chairs at one time, so for now I don’t use them.

Another thing to keep in mind is to determine what kind of materials they use. Chinese woods are slightly different than lumber here in the USA. Also keep in mind that most of the world operates on the metric system. You will often get shipping measurements and item measurements that are all metric and it can be a little confusing. Put this link into your favorites. I use it all the time. www.wihatools.com/conversion.htm

There are two ways to go about finding imported items.

The first way is to find them yourself.

This involves a lot of legwork but is totally attainable. Basically you need to contact companies one at a time and express interest in their product. Developing these relationships takes time and a lot of email. All good business relationships are developed one at a time. Try with search engine searches for you’re item of interest and go from there. I suggest keeping a search log to stay organized. (I have included one in the forms section.) I find that communication with Asian companies is hit or miss. About 50% of them respond to your inquiry. When they do respond
they are usually gushing with enthusiasm to do business with you. I find a lot of heart in their responses and find them brutally honest people. I love waking up to see response like “…. looking forward to being your best friend in China.” There is something about people like that, business like that is hard to find here in the States.

Make sure you remember there is a time difference if you want to contact them. They are starting to utilize email very heavily but most still like fax machines a lot. They almost always want your fax number. I feel stupid if I don’t have one, somehow less professional. There are also a number of import export clubs that you can join or at least look into. I would buy every book I could get my hands on to better equip myself in the art of international trade.

Here is another website that I recommend reading and then going back on a regular basis: www.i-b-t.net . It is loaded with a ton of information about importing and has particular articles of training.

How do you pay?

A lot of confusion is cast upon future importers on how to pay for your goods. Most Asian companies do not take credit cards. Most operate on what they call letters of credit. The above website has a good lesson on it. Basically a letter of credit is like a purchase order that spells out all the details of the deal. The easiest way I have found of paying Asian companies is to just wire them the money. I usually work out a deal to wire a deposit and wire the rest when they are ready to ship. You can do it from your bank, its called an international wire transfer. It usually costs about $35 to $40 depending on your bank. You have to have your business account set up with a bank that can do international wires. Look for that when choosing a bank.

The second is using a source broker.

A source broker is a company that already has relationships with certain international or foreign companies. Some have separate offices already set up in particular countries of choice. Most of their web pages explain their areas of specialty. I have a certain individual who I like to use for tools and wooden items in China. www.professionalsources.com

Professional sourcing companies can make your life easier. They do all the research, they make the arrangements and they can get better prices, especially if they have an office in that country.

They also can help you manufacture items in different countries if you have a good idea and want to get something made abroad. Keep in mind they do not work for a fee. A lot of times they will incorporate their fee into your order or send you a separate bill. They are experts and I think they are well worth the money. They can do all the detail work and make sure your shipment makes it to correct port without you having to stress over the details or make mistakes concerning international banking.

I highly recommend this route. Put international sourcing into your search engine and it will return a host of information for you to devour. If you’re looking for a particular item and can’t find it, a source broker becomes very handy. Usually they will find your item and then either charge you for the name or contact the company for you. Each company has their own method of business.

Mine will either let you contact the company personally or represent you through the whole ordering process.

Purchasing

Here is where we start, five items to consider.

1. Purchase price
2. Duty or tariff on item (customs)
3. Dock fee
4. Transportation company
5. Relocation

1. First of all, the purchase price of the item is what it costs. Believe it or not, they are not the same for all everyone. Let’s say I want to buy a plastic widget from Vietnam. I contact the company, develop a business rapport, review the product, ask a ton of questions and get a quote. Almost always you have to buy the item in large quantity. If you’re smart, you will purchase by the container load. (20 to 40 feet).

Warning: This next sentence is highly controversial and subject to individual opinion! Proceed with caution.

When I buy from China or Vietnam it makes my brother laugh. First of all I get what we call Caucasian prices. That means I am a small company in the USA and I am Caucasian, not Chinese or Vietnamese. If I were the respective nationality I would get a better price. My brother employs a Vietnamese person who does his buying for him. He puts him on a plane and sends him to Vietnam and whom do you think gets the better price? Not me, but that is ok. Still there is money to be made given some thought. (I told you this was controversial.)

2. Secondly you have to pay a duty on the item before customs will release your shipment to you. Hey it’s the law and you’re at their mercy. Look up www.uscustoms.com for some guidance. You need to figure the duty price into the purchase price in order to determine what it will really cost you.

3. Dock Fees. You have to pay someone to take your shipment off the ship. It does not magically happen and someone is there to take advantage of that situation. They provide a service and you need to figure it into the cost of doing business. How much? It varies per size of your shipment. Plan on spending some extra money. Also bring a check with your company name on it. Shipping companies have this aversion to personal checks and cringe at the thought of cash (you figure that out).

4. Transportation fees. When your box or container gets off the ship it has to go somewhere. You can’t pick it up at most shipyards. Enter the shipping company. A company comes and whisks your goods away to their warehouse for you to pickup. Hey guess what? It’s not free. In fact I found this to be the most expensive part of the process. You’re at their mercy and they usually are not the friendliest of people. Depending on what part of the country you’re in, they are not usually in the best areas either. I surround myself with large trucker driver type friends when picking up shipments. They charge a handling fee to move your freight onto your truck. Usually your items will be shipped on a pallet and they will forklift them onto your truck. I will break down a list of a sample shipment I made. Make sure you ask them what the handling charge is before you pick up the shipment so you’re not surprised. Again make sure you use a company check, eyebrows will rise if you try to pay in cash or that dreaded personal check. I
suggest you try to get to know someone to make things smoother in the future (you figure that out).

Very important: You are not allowed to open your box, crates, containers, or pallets in the warehouse. I once thought I could remove the
contents of MY crate and load it into my van then take the crate apart and take it with me. They have all the angles figured out. They will not let you and if you insist they will charge you a big fee. Again it’s kind of a tough man’s world.

5. Relocation. If you have a large shipment, you have to have a way to get it home or to your business. You can rent a large Uhaul to fit some shipments but you may need a semi truck. You can rent a trucking company to pick up a large shipment but you need to get quotes on that since prices vary. I like the idea of paying friends to drive an Uhaul and pick up the stuff. If you have a friend who is a truck driver, that’s even better. I would rather pay my friends than pay someone else, but that is my personal preference. Also if your working out of your home, consider where you will store all your newly acquired goods. Personal storage is a cheap alternative to cluttering the garage.

Freight Forwarders

I would have to say if you’re thinking about doing any kind of importing its best to find freight forwarder. A freight forwarder is a company that handles all the shipping costs for you. When you find a foreign product you like and negotiate the price, you hand it to the freight company. They arrange the shipping and the pickup. Better yet, they pick up from the dock and bypass the whole warehouse thing (if you order by the container only). They are well worth the money when it comes to not having a headache. If you’re not near a port they are invaluable. Try and pick a company that has an office in your town. You can get a cheaper rate since they drive through you town already.

The beauty of the freight forwarder is that they also handle customs for you. This takes another step out of the way for you. I used to handle customs myself. The wheels of the government turn very slowly and it’s no different for the customs department.

Everyone is wary, since so many illegal things come into the country misrepresented. Be honest and let anyone look at your items if requested. Word to the wise; if customs opens your crate, or pallet, make sure they have properly reattached lids, shrink wrap or nails. I had a custom agent inspect a crate of parts and not nail the lid back on. I saw the crate but did not check the lid. Guess what came flying off my open trailer?

A small shipment dilemma

I once ordered two band saws from china. One to test out to see if I liked the quality and one to sell. This is I did to test the market. Here is how it worked out.

Purchase price$106 each, $212 total
Shipping $95 (manufacture)
Dock $50
Duty $18
Warehouse $115
Relocation $20

Total $510

That’s about $255 per saw. I can buy a new one retail for $300. Is it worth it? For two saws, I would have to say no. For 100 saws I would say yes. This does not mean that the warehouse fee is proportional to the number of units you have. However I would have probably paid the same $115 for 50 saws, which brings down your purchase price. Also I could bypass the
warehouse fee if I used a freight forwarder but would have to add their fee as well. This is a somewhat negative example. The goal of it is to make sure you take all the elements into account and do good math.

Sources

How do you know what to buy overseas or what to buy here in the USA? Well I always start with the item. If its American made and the manufacturer will let me become a distributor, then chances are I will buy it through them. If the prices for parts of an item (see router table example) are so high here in the States, I may look overseas. The real savings is in buying goods that are labor intensive to make and buying in quantity. Even designing parts or items overseas can be profitable. Keep in mind you just
can’t go on down to the manufacturer and see how your production of widgets is going. Plan on doing a lot of emailing. Most foreign companies like drawings as well as samples. I try to make something out of wood as a sample to send to them as well as include drawings or digital photos.

Another good way to find out if a product you’re interested in will work for you is to buy a sample. Most foreign companies will ship you by air (expensive and at your expense) a sample to peruse. If the sample meets your expectation, you can order more. Shipping larger items by air is very expensive and might not work for you. I recommend opening a DHL Shipping account. Having your DHL account number handy when arranging shipping, it makes you look professional (www.DHL.com). With DHL you have to talk to a person to set up an account, you cannot do it online (as of this printing).

Here is a list of valuable web sites to look at when planning on importing. I also recommend the book Export Import by Zolde. It happens to be available at www.amazon.com for $13.29 (as of this printing) this has far more resources than I could ever want to go into.

1. www.asiansources.com
2. www.madeinchina.com
3. www.azteccontainer.com
4. www.containershipping.com

When you order something, plan on your money being tied up for about three months. Generally you will want to have your items shipped by sea because it’s cheaper. It also takes about 30 days to get here. Most companies also have a lead-time in which they need to process your order. Some are between 30 and 45 days depending on the item. If you’re having something designed, it could take longer. If the item is one of their regular products it can be shorter.

The process definitely takes longer but can have long-term results. If you have the funds to buy in larger quantities, and are able to store the goods, you definitely can make a living. The key is doing your homework. Hopefully this section has spurred your mind on to investigating your own ideas.

By George Meszaros

Expect to receive a response from the factory within a couple of days. Never make a buying decision based on only one quote. Be sure you make contact with several factories. Don’t get excited too soon. Build a profile on each factory you contact. Make a note of how long it took to get in touch with the factory. How many days it took them to respond to you. Did they provide you with detailed information? Were they sensitive to your questions?

Don’t commit to doing business with the company until you have established a rapport with them. Research the company online. Visit online forums within your industry and search for comments about the name of the factory. Google the name of the company and see what you find out.

Ask for samples. Samples are usually free, but expect to pay for shipping. I recommend asking for pictures through e-mail prior to shipping anything. Shipping, even a small sample, can cost you close to $50.00. A sample from here, another sample from there could add up. Make sure your contact understands exactly what you are looking for.

Expect to pay for tooling and other set up charges if you are creating a new product. Get multiple quotes from various factories, to get a feel for tooling fees. Tooling can cost several hundred to several thousands of dollars. Before you pay for tooling, be sure the factory understands the exact dimensions and material of your product.

Request your contact to photograph the sample next to a ruler, so you have point of reference. The Chinese use the metric system, but they are used to working with American companies and can provide you with measurements in inches. If they can only provide you with metric measurements, there are free online utilities that can quickly convert from metric to inches.

Find out the FOB price for the product before you get your sample. If the price is over your budget, there is no point in getting a sample. Many people get overly excited about receiving a sample that they forget negotiating a good price. The price always decreases as the size of the order increases. Be ready that your contact will want you to buy more than you need. Be firm, and explain that this is your first order, but subsequent order will be larger. Explain that you are looking for long term partnership, and you are going to be placing orders in the future for larger quantities.

Throughout the above processes, you are going to get an insight into the responsiveness of the factory. It is a good sign if they are quick to communicate with you. Pay attention to whether or not they pay attention to details. Are they following your instructions? Do you have to explain everything twice to them? Are they easy to do business with? Use this opportunity to build a profile of the company.

If your experience is less than desirable in the early stages, you should look for another company. You might be out a few hundred dollars, but at least you have eliminated a potential disaster.

Once you have received the sample, and you are ready to place your order you will be required to wire transfer the deposit. The deposit is usually 30 to 50 percent of the order total. To minimize risk, try to negotiate the smallest possible deposit. Wire transferring your deposit is not without its risks.

If your contact wants to walk away with your money, there is not much you can do about it. I was only ripped off once, but it doesn’t mean it can ‘t happen to someone else more often. Importing takes risks. Don’t cut corners. Constantly communicate with the company. Clearly explain your expectations. Build a good working relationship with them.

After the order has been completed, you will be required to pay the balance. Don’t agree to pay until you receive the faxed Bill of Lading. Once you receive the copy of the B/L, you can be sure that the product was loaded at port. Unfortunately, you won’t know for sure what you got until you receive it on your end. Importing is risky business. It is an exhilarating experience, requiring careful planning, negotiations, and bit of luck.

Practical Example: FedEx Trade Networks is a great forwarding company. I have used this company for years, and they do an excellent job. They are a well-established company. The company takes care of all aspects of your ocean freight. They help you care of shipping, brokerage, taxes, duties, permits, and required licenses. With FedEx Trade Networks you can expect door-to-door service. They’ll pickup the shipment at the factory overseas and deliver it to your business in the U.S.

Dumping

Dumping penalties can greatly increase your product costs. Certain products such as candles imported from China are penalized by an extremely high dumping tax. Prior to committing to import a product, research applicable taxes. If you are not careful, you could end up doubling your product costs. Unfortunately, antidumping laws have little to do with maintaining a “level playing field,” and a lot more with good old-fashioned protectionism. Research potential taxes and duties at United States International Trade Commission’s website usitcdotgov.

About the Author: Succeed in online business.

Source: www.isnare.com

Whenever I mention the fact about importing from China and other countries I tend to get some mixed responses.  There are still the die hard “only buy when made in America” fans.  Certainly it is very patriotic to think this way, however it is a concept from classic industrial age thinking.  Today we are firmly entrenched in a world economy, and in that economy businesses have to compete harder than ever before.  When importing was once termed a radical move, it is now almost an essential way to control costs.  But still when you mention the fact that something was made in China, eyebrows still raise, why?

The Good and The Bad

I think there is a lot of speculation since there have been some products that come out of China that have been questionable in quality.  Part of this problem is ourselves, we demand more and more things and want to pay less and less for them.  Businesses are attacked from all angles and the quest for a decent profit margin seems all that matters.  If demand is high for cheaper goods than production will respond to meet it.  In short, if someone wants cheaply built products, chances you can find someone to make them for you.  Geography does not really apply.  In almost any field this seems to be relevant.  China helps us cut costs and its up to us as designers and manufacturers to help them give us qualitiy products.  A lot of people point their fingers soley at the Chinese, whereas a good look in the mirror might solve most issues.

Labor:

Part of a global economy is knowing where you can cut costs, in some countries certain natural resources are more plentiful.  Labor also seems to vary wildly as you travel the globe.  Currently as of this article, Chinese factory workers earn roughly .65 cents an hour.  That is 1/40th of a typical American worker.  Inexpensive labor does not mean that the product has to suffer, again if you guide the exporters in your designs you will have a better control on quality.

Ethical

The Chinese are as ethical as anyone I have ever met in the USA.  They are a joy to work with and very respectful people.  You can always find a bad element in any area of the world.  Take the fact for a thousand years China was the source of nearly all the worlds finest goods.  High standards were common.  Consumers demand high quality but there always will be the business that wants to shortcut costs.  Have pride in what your building and it will serve you well.

Summary

So how does this serve you?  Like I said before, if you design well, and find a company that will make your parts or complete items to your specifications, you will have no problems.  I generally do not give the full project to one company.  There are companies that like to copy entire designs and then sell them cheaper than you can buy them for.  China recognizes good design too, so I reduce my chances by giving them parts to create and then do the final packaging here in the states.