Importing Goods from China: 5 Tips for Small Businesses

If you've failed to notice that importing from China is now an extremely big deal, you may be quite alone. That's because just about everywhere you look, 'made in China' seems to be there.

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5 Tips for Small Businesses

Why? Because for small and big business alike, importing from China makes an awful lot of sense.  Wages are low, materials are aplenty, Chinese design and manufacturing industries are thriving, and the final products are no longer 'cheap and nasty' - they're nothing short of top quality.

 

So if as a small business operator you've crunched the numbers and determined that importing goods from China will save you thousands and supercharge your business, you're one among many.  Nevertheless, the importing landscape is daunting, risky and full of potential landmines.

 

That's why we've put together an introductory guide about what to consider straight out of the box:

 

  1. Develop your product

 

You might be tempted to jump the gun and find a supplier while the iron is hot, but take our advice and finish designing and developing your product before you even start looking at China.

 

That's because only once your product is really complete will you know the exact specifications, the design and even the packaging that you'll want your supplier to create for you.

 

Finishing your design before even saying 'hello' to a potential supplier also puts you in a strong position to negotiate costs accurately from the beginning.

 

  1. Choose a supplier carefully

 

You already know this, but China is vast - and so is the manufacturing world that is expanding at an astronomical rate.

 

The bad news is that among those thousands upon thousands of potential manufacturing suppliers, there are plenty of bad eggs - or companies that simply won't be the right fit for you.  Either way, you only have one chance to choose wisely from the very start.

 

So take your time in establishing a manufacturing relationship that you feel confident will really work.  Build up a strong shortlist and, over the course of days and weeks, narrow it down to the ones that are the best fit.

 

  1. Miss no detail

 

It's understandable that getting your product made and in your hot little hands is exciting - but it will only really pay off if you attend to every tiny detail as you go.  Miss something, and you could mess up the entire chain.

 

For instance, make sure you get samples sent to you before signing up and paying.  That's so you have a clear idea of the quality, and have something concrete in your hand to compare with the finished product when it arrives in bulk.

 

Then, make sure your purchase order is as detailed as it possibly can be, including every aspect of the product specifications and the terms of trade.

For instance, make sure you get samples sent to you before signing up and paying.  That's so you have a clear idea of the quality, and have something concrete in your hand to compare with the finished product when it arrives in bulk.

 

Then, make sure your purchase order is as detailed as it possibly can be, including every aspect of the product specifications and the terms of trade.

4. Don't forget about shipping

 

Amazingly, the issue of shipping is often given precious little attention by new importers - but what could be more important than actually getting your products in your possession in a safe, affordable and timely manner?

 

One of your first shipping decisions will be deciding between air or sea. Maritime shipping will be cheaper, but if your production is already delayed, saving money in this area will just slow you down even more while you wait for it to arrive.

 

If the volume and weight of your order is low and your profit margin is high, air may be a viable choice. But bear in mind that, just like your supplier, the shipping company is also a very important decision - because if your order goes missing or is held up or lost or damaged, the only really aggrieved one will be you.

 

5. Always look for savings

 

Never forget that you've turned to China because it makes the most financial sense for your small business. So with that being the case, it's crucial to keep a close eye on the costs - and find savings wherever you can.

 

Product design, manufacturing, importing and selling is not cheap. There's the product itself, the shipping, the logistics and the distribution. And that's not even mentioning the tariffs, taxes, and export and import duties.

 

An often overlooked cost is the transferring of money. You'll probably be paying for your goods in either Chinese currency or US dollars - and that expensive currency exchange is something you might be doing over and over again as your importing relationship deepens.

 

You might be tempted to just use your local Commonwealth Bank for transfers, but CBA exchange rates are most certainly not the best in the business. Using an alternative FX provider can save you hundreds each time you pay for $10,000 worth of goods - simply by choosing the provider that is offering the best exchange rates over the easy choice of a major bank.

 

The final word: Do your homework!

 

Never forget: while importing from China can really make a lot of sense for your small business, it will only work if you take it very seriously.

 

Many serious importers will therefore take a trip to China, attend a trade fair or two, visit some factories and meet suppliers face to face before shaking hands on a deal. That's because the Chinese culture is completely different to ours, and it's a market full of competition, corruption, nuanced etiquette and language barriers.

So while spending time and money doing serious due diligence might seem costly, it could be the expense that was the difference between success and failure. Zhù nǐ hǎo yùn! (Good luck!)