Ins and outs of importing from China?

Hi,

I am the operations (logistics) manager for a company that routinely imports from China and other locations in Asia.

I usually only deal with containers (usually 40', sometimes 20') but have done several emergency air loads.

Now, I can't really help you on price without a LOT of information but I can give you some general pointers.

Right now 40' containers are costing me around $4000 from China (Yantian) to Milwaukee. this is a door move so the fees to get the product to the warehouse are included.

The freight forwarder and customs broker fees usually run me a few hundred bucks (Note, I import an FDA controlled product so there are FDA clearing fees there).

Because these guys get paid for paperwork it's probably a similar price regardless of the freight volume.

Inland logistics is even more complicated than the ocean freight.

So you need to figure out your inventory management, warehousing and distribution channels as well, as this, in my experience, is where the real logistics come into play.

Now the products you want to import make a big difference, I deal with Exam Gloves, which are a heavy commodity with a low profit margin, so my logistics must be perfect or the company goes under.

Questions:

What kind of product do you hope to deal with?

What area do you plan to cover in terms of distribution?

What kinds of volume do you expect in sales (getting this wrong is costly)?

Craven, thanks for your prompt reply.

Here's the deal. I've been emailing a vendor in GuangDong who sells, among other things, lighting products (like decorative and party lights). Basically, I'm buying non-regulated, non-hazardous items.

Wholesale prices are typically under $50 per unit, ranging from $3-$50.

His company is not requiring a minimum purchase from me, but he has stated the shipping charges can be expensive for small orders (I am in no way prepared to buy a container).

He gave me an example shipment as follows:

360 units make up .95 cube. Shipping by boat to the USA would cost $25 USD, plus $25 bank fee.

The whole shipment, therefore, being some $2000 + $50 fees.

To him this seems very simple. And at these rates, the shipping and fees do not outweigh the benefit of buying from China, even with such a small order.

However, I don't know anything about customs, duties, etc.

You mentioned above that you pay a customs broker--this sounds to me like another term for "middleman."

Is there a way to bypass the middleman? Are brokers necessary on small orders like I'm considering (1/2 to 1 cube)?

I keep thinking about mailing christmas gifts to family overseas--it's really not a big deal, so how big is big enough to go through customs, or whatever else is needed?

Please note that I am not suggesting doing anything illegally--I am totally above-board. But I do like to cut costs whenever I am able.

As far as logistics on the homeland, I'm feeling really stupid right now--I guess I just didn't think that getting freight from a dock to my place would be all that difficult.

When you can find the time, do you mind explaining to me some pitfalls I may come across?

Regarding distribution; as I'm just in the preliminary "fact-gathering" stage, I don't have a formal plan put together.

However, my intent is to buy direct, and sell to the retail, not wholesale market (though wholesale market is not out of the question if my costs are low enough).

On the retail end, internet sales would be probably half my market, while local sales in a store I own would account for the rest (I'm just a small operation here, with lots of potential )).

I hope this addresses your questions suitably.

Thanks again for your help!

General Tsao

Well, I'm not sure if you can clear customs yourself, given that you state that you do not know much about it.

You might also have to be in the right location so you might just have to bite the bullet and pay someone about $100 to clear your shipments through customs for you.



It all depends on whether or not you have the time, and knowledge on how to clear customs.

IMO, it's much better to use a customs broker as it is tedious.



Almost everything goes through customs, they just don't hassle small stuff as much.

But if you are shipping by boat, maybe you can get it cleared with other product that's shipping.

Ask your shipper (the vendor) how it will be packed and shipped.



It's not difficult, but it can be costly. And unless you have a decent profit margin costly logistics can kill the profitability of your venture.

Shipping LTL (less than load) can be expensive. Warehouses will then charge to receive the product.

So, IMO, inland distribution and warehousing is something to pay attention to.

Where you warehouse makes a hell of a difference.

For example, some places have much cheaper warehousing than others. Nevada is a pretty cheap state for the west coast for example.

Where you have your entry point is also important.

If you have a problem with customs, for example, they might hold the product (place it on hold, not hold it for you). You then can't move it and unless you ahve local options available you hit demurrage (a hefty fee for having things sit in docks, yards etc for more than the couple days they are alotted.

Lastly, you have distribution to the end user. Using something like UPS makes it easier (if costly).

The location of your warehouse can make a difference for other freight costs, for example, when I send product from Milwaukee to New York it's more expensive than from New York back to Milwaukee because due to the regional manufacturing levels some directions have more empty loads than others.



The wholesale market is where my advice really kicks in, because if you are dealing with, say, UPS it's easier.

UPS is prohibitively expensive in my market but might not be for you.



Sounds to me, like you have a pretty easy model. If you can factor in shipping costs to customers with UPS or somesuch and still maintain competitive prices and profitability you should be fine.

Logistics with wholesale will be different, UPS is already an expensive way of doing things but when you really need a well-oiled logistics machine with trucking and such you;ll need to cover more bases. With UPS it's pretty straightforward.

What I'd do if I were you is the following:

1) Get terms as close to DDP (Delivered Duty Paid) as you can, not FOB (free on board, means you take ownership of the product when it hits the water). In other words let the shipper handle the inbound risk and just pay the cost for a delivered product.

2) Ship out UPS to end-user.

You should probably talk to some freight forwarders and customs brokers in your area to get a better idea of regional issues you might face.

THANK-YOU!
Craven,
Thanks very much! You have been very, very helpful!

General

My pleasure.

Importing from China
Dear Craven de Kere,

I was reading your posts to GeneralTsao about importing items from China. It was helpful reading your posts, but I was wondering if you might answer a few questions of mine. I would greatly appreciate it. To save time I will list a few here now:

If not FOB, then what? (China seems to love the FOB)

It seems that the individual shipping costs come to about $25 to $35 per unit. This seems reasonable from China to L.A. But if I am not filling a container, am I able to share container space with others? And if so, how would I go about setting that up? A broker?

What other fees can I expect at customs besides duties? Insurance? Inspections?

I live in Southern California, not far from you it seems (Riverside) and I can go to L.A. to pick up my shipment. What I need to know are the processes for going through customs myself. I am trying to import "pocket bikes" (gas powered scooters that are scaled down versions of actual motorcycles). Like GeneralTsao, I cannot afford to buy an entire container, but I have located a manufacturer that will sell small amounts. I am not sure if this items require duties or not.

Unless I am mistaken, I read that I have to classify my shpment items using the HTSUS? I have no idea where to begin with this.

I hope to hear from you soon,

Jeff Jones
Jones Enterprises

Re: Importing from China


The opposite extreme would be CIF (Cost, Insurance and Freight) where the supplier/shipper takes care of it up until a specified destination.

It's not just China that loves FOB but pretty much any manufacturer who doesn't want to become involved in trans-continental logistics as other shipping terms mean more assumed risk for them.



I have never worked with partial containers myself, if I had less than a 40 footer I'd get a 20 and anything less than that was only emergency air freight situations.

But if you need to do less than a container, you should contact a frieght forwarder.

Even if you were doing a full container you'd need a frieght forwarder.

I like to use one company for both the frieght forwarder and the customs broker and the best company I have worked with is M.E. Dey.



Depends on the product, for 40 foot containers our fees are usually negligible.

I usually get the container cleared by customs, FDA (not all product needs this) and get the duty and broker fees paid for less than 200 dollars for a 40 foot container worth about 40,000 dollars.

Of course, your mileage may vary and the product makes a difference.

Other costs can be incurred if special inspections are needed.

For example, if the FDA flags my container for inspection I can't move it more than something like 40 miles.

They can take up to a month so that means local warehousing costs as demurrage (fees if the container doesn't leave the dock or any specific bottleneck) is exhorbitant (100/200 dollars a day past the 5 free days, the number of free days varies, ask your customs broker and freight forwarder for info).



Long Beach is a nasty port (busy), I have my stuff enter land in Vancouver now and rail it across the US to my points of entry (as far as customs is concerned) in Wisconsin.



I have never cleared customs myself, as I mentioned above I direct this from afar and even changed my point of entry to a place much further from me for logistics reasons (having a point of entry near the final destination means I can have the FDA inspect the product at the final destination and avoid extra costs of temporary warehousing near the west coast.

You can talk to a customs broker about how to do this. I do not know if an individual must be a liscensed or otherwise qualified individual to do this.

I do know that their fees are cheap, I have paid about 40-80 dollars for 40 foot containers and that's both customs and FDA, your product will probably not be an FDA controlled product and that might make it cheaper.

So a quick talk with a customs broker should clear it up. In Long Beach I have used a customs broker called Morrison Express.

I suspect it's simply a matter of going down and submitting the proper documents (certificate of origin, bill of lading, packing slip etc) and following up on it.

It sounds too tedious for occasional trips and you might want to consider a broker, as they work cheaply (because of the volume, a couple of extra documents to take with them is no big deal).



It probably will, but a customs broker would be better informed to answer you. I manage a company's international logistics and haven't micromanaged on that level so I won't be much help.



Same here, I do recommend talking to a customs broker and perhaps even securing their services.

more questions about china imports
Well Craven you are a wealth of information!

I too, am very serious about importing a product and selling it retail (home decoration, glass, collectables). China is the first country I've looked at for production. If you know of others I should check - please let me know. BTW - I will be shipping to Colo.

I have several questions for you, if you have the time. This would really help me out alot.
This is all quite complicated and risky, I'm not 100% sure if I should jump into this importing bus.

First, you have mentioned some broker names that you were pleased with, if there are more, please let me know. So far I have not gotten any serious interest from brokers since my first shipment will be somewhat small. (Can't risk that much $ on an unknown). Do you know of any way to generate interest on their part for small shipments?

Also, I don't understand what the difference between a customs broker and a shipping broker, do I need one of each?

What resources do you know of on legal matters...the one that concerns me now is I will be making a significant initial order with a company in another country whom I know hardly anything about. What if they are a scam, or if they loose the product, or make total crap. Do I have any rights, and how can I find out what they are.

Is there a way to check on businesses in china - to assure they are legit? (inexpensively of course).

Does door to door shipping always include the unloading on the receiving end? Do I need any manpower or forklifts or will they supply them if I've specified door to door?

Where does one get insurance for import transactions, or is there such a thing (I would want to insure against anything that would cause the shipment to not arrive in saleable condition - if possible).

About timing, is there any typical contract clauses for late shipments when dealing out of country (ie: my big shipment doesn't get here until AFTER xmas...even if promised in Oct).

Some manufacturers require 1/2 cost up front, others 100%. What is typical?

How should I handle money, does this mean I need a relationship with a chinese or international bank?

Thank you in advance for all your help!

Marti

marti,

I am on a mobile and away from all my contact info, but if you could start a new thread with the questions I'll get around to them. Posting them to someone else's thread makes them hard to keep track of.

Using a broker
I too am in the process of importing goods from China. It is machinery. In my opinion, IT IS NOT WORTH THE EFFORT of avoiding a customs broker. I already considered that and for what they charge and what they do I AM USING THE BROKER instead.

Here's why:
1. You tell them what you are bringing/importing
2. They know the LAWS, wether be it EPA, FDA, or just CUSTOMS
3. Most commercial items require a "customs bond"...try and find a surety company to sell you one. Customs makes it sound easy....I called 50 sureties UNTIL I was finally referred to broker, who is handling it all.
4. Try and find all the necessary forms and hope you filled them out correctly.
5. Who do you know that works at customs, that you deal with on a regular basis???? If you are like me NOBODY.
6. Goof up and not get Customs to clear your shipment....INTO STORAGE IT GOES....at rates that make loan sharks look cheap, and after a certain period.....the shipment goes to auction or gets destroyed.

I found out the hard way. I spent hours upon hours searching worrying wondering how and how much. Only to find that the broker is charging me 120 plus the bond. I lost more than the 120 trying to get around a broker. It is best to let those that know handle it (customs) and you do what you do and that is SELL>SELL>SELL....so you may order more and make more money.

Good luck with you venture..
George

ins and outs of importing from china
Interesting discussion.

A minor suggestion regarding importing light fixtures from China. You say they are nonhazardous and not regulated. Most retail outlets will not sell an electric fixtures that are not listed by United laboritories (UL) or similar testing agency.

If they are not already UL listed, this is a relatively expensive process.

Re: Using a broker
I would like to import 300 fishing rods from China. I have imported a sample Package using my UPS air freight service. I like the product and have established a price with the company. Problem I need to ship this order to my location here in the United States. I want to ship using ocean freight. This order is worth about $3500, and would take about 2cbm space. I plan to resell these rods, the profit margins are small, if it cost more then $3.00/rod or more then $900 dollars to import, I can't do the deal. The company said they would ship the product to Los Angeles, can I do that, and then use my UPS account to get it through customs.
This order is too small, no profit for importing companies to be interested.
I'm called UPS three times no help, I was told by a importing company the their fees alone are more then $900. Is this a case of the little guy out of luck. If you have any idea please let me know I willing to learn.
Thank You
Mark

westernmark,

I never paid anything like that to get things clearned through customs by a customs broker. Their fees were usually under 200 dollars.

My friend thank you for a look, I'm still trying to live with my short comings. When I look back, I say how could I be that stupid, but what is really hard, is to realize is that you can't change it no matter how hard you try or want to. Getting old is not for the weak of heart.
Mark

Re: Using a broker


Hi -- I found this question when doing a Google search for "importing to the US." Iamb another wannabe importer, but in small quantities. Very small quantities. I want to add a line of Spanish-made items to my online inventory, to fulfill a need and as my entree into importing.

I would need a shipment weighing perhaps 30 pounds every few months. (The items I want don't weigh much; they're in the clothing/textiles/footwear categories.) If I can't find a Spanish source, I might look in China or India for knockoffs (not illegal ones, just cheaper, mass-manufactured ones. These are generic items, not name brands).

I have been attempting to line up sources, with the help of various consulates, and doing rather haphazard research (one question invariably leads to another). I feel like I'm putting the cart before the horse and being overwhelmed (not really feeling overwhelmed -- it's all fascinating) with information on containers, pallettes (sp?), freight forwarders, etc. It seems to me that UPS would be all I would need for my deals, at least for awhile, and that's what my potential (sort of) suppliers suggest.

Does UPS freight basically perform the services of a freight forwarder/customs brokers with small shipments like these? (Also, the Chinese manufacturers seem to think none of this would be a problem. Is their eagerness something to be wary of?)

Doe anyone know of a good online source of established importers? Or of US importers that would perhaps carry or be able to order various items for wholesale purchase? Or of good, active forums on importing? (Not that this one is bad. I was very happy to find it.)

But it seems like there must be people/services out there with a foundation in this subject who could help bridge my relative ignorance gap. Otherwise I foresee years of studying books and dubious Web sites about importing while I lose sales opportunities.

I don't want to be Pier One; I just want some stuff that I can't find anywhere else. Maybe a trip to Spain would be the cheapest route, in the long run. (At least, it would be the fun approach.)

Thanks very much for any insights.

Kim V.

Dear friends,

I'm very glad to read the in formation .

I'm Davis ,glad to be here .

I'm a international freight forwarder in China.

If you want to import cargo from China ,We Top Fortune Shipping Ltd might give you a hand .

Firstly ,you should show us what kind of goods and the specification of the goods you need to import ,if you have already fiound the vendor then tell us his or her contact details ,we will contact the vendor directly to handle your cargo.

Secondly,keep in touch with us conveniently in time ,any enquiry just let us know.

It's the probable of the process .

If you come to China someday ,anything I can do for you just let me know .I will be glad to help you.
Maybe I could be your guide here in China.

Any further enquiry you want to know please contact me directly .

EDIT: MODERATOR: PERSONAL INFORMATION REMOVED

Sincerely Yours

To englishdavis


Hello Davis,

I have just returned home to the US from a visit to Shanghai, Lijiang and Dali. I found some handicraft and art items there I would like to import for resale in the United States. If you are still reading these boards and could help me, please let me know. My email address is in my profile information. I'm more than happy to help you improve your English in exchange for helping me learn some Mandarin as well.

Thank you very much,

-Sonja

in's and out's of importing to China
I would likw to know if I am importing tins from China for a client am I responsible if a 20Ft' container sinks with the product on the ship is my company responsible for the shipment or the ocean liner responsible for the shipment to pay for the goods.

Ins and outs of importing from China?
Hi, I just found this site and it seems to be pretty informative.
I am trying to make purchases from three suppliers in Shenzhen, China.
What I've found to be interesting is as follows:
1) All three of them want me to pay by Western Union (payments are under $1000).
2) The payment made out to an individual's name instead of the company's name.
3) None would supply customer referrals instead they supplied tracking numbers from EMS to USA.
4) They will only accept L/C if amount above $5000 except for one T/T above $2000.
Are these normal business practices when dealing with chinese suppliers?
Thank you. Your answers will be greatly appreciated.
Sergio.