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.

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.

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.