Importing from China, an Overview

By: Aaron Xu

January 22, 2009

Searching and Qualifying the Right Suppliers:

Gather a list of contact information from the internet through business forums, networking websites or search with well thought out keywords.  Once you have established communication with them, your next step is qualifying suitable suppliers.  To help you make an informed judgment, ask the following questions: what companies have they worked with, do they manufacture products for export, have they attended any trade shows or exhibitions, what’s the number of years they have been in this business, etc.  Depending on their answer, you’ll have a much better idea about this company’s reputation, their geographical location and specializations.  This information is crucial in helping you identify the most capable and reliable manufacturer.

Initial Quotation:

The most important question you must ask them is, do they understand all the requirements and does the quotation reflect that knowledge.  Obtaining quotations from more than three suppliers will give you an accurate benchmark for a better comparison.  It is not uncommon for manufacturers to offer you a below market price and then raise the price afterwards.  So please be certain that the quotation is accurate and with a longer valid date.

Sample Production:

Sample production is a must if you are sourcing a more sophisticated product.  On average, sample production could take up to five to ten test runs until the factory reaches an acceptable quality.  Or if you want to cut corners, you could send samples of your finish product for them to use as a reference.

Time for Production:

Now you are ready for mass production.  In terms of payment, it is not uncommon for manufacturers to request a 30% down payment, to cover the costs of raw material.  The reminder 70% will be made out when products are ready for shipment.  Of course, these terms and conditions vary by company and it is open for negotiation.

Shipping:

Before the finish products are loaded into the container, you should double check that all the goods are compliant to the regulatory requirements of your country.  Products that violate any regulation may be confiscated at the boarder and could lead to future lawsuits.  Don’t take your suppliers word for import compliance, because they are not legally bond; it is your responsibility.

Almost There:

When your shipment is well on its way, you may want to track the progress of transport and customs clearance status regularly with your freight forwarder once the container enters port.  You may be asked to provide additional production information and you endorsing the bill of lading from the customs.  You’ll also need to issue a power of attorney to your broker and purchase customs bond for your products.

An Important Note:

Importing from China is not an easy job.  It is very complicated and involves numerous, highly detailed-oriented tasks.  It requires strong communication and earnest co-operation from all participating parties.  Most importantly, execution is the key.  If any part of this delicate process is interrupted, it will cause a chain reaction that will severely damage your schedule of delivery.  Sourcing from China should be dealt with knowledge, experience and caution.  A feasible alternative would be to work with a company that acts on your behalf, and see you as their top priority.

We would be happy to provide you with information and solutions that would help you explore or improve your China sourcing projects.  Please visit us at http://www.csandcm.com/ for more detailed information.

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