Need Advice:Business Transactions with Company in China

Hi,
I am hoping to get some advice from folks involved in importing.

I am looking into starting a business where I will be importing computer/eletronic peripherals from China and selling to local/national online/B&M retailers. I am in direct contact with the Mnfg who is a distant friend and he has promised a sole-distributorship for his product. I have done some market research and the products seem to be in the introductory stage of their PLC - and hence I am hoping to catch the market growth. Before I get started and invest, I would like some information/advice from some experts:

1) What are some Do's and Dont's for such a overseas relationship?

2) Money should be transacted by LC. Any other advice on that? BoA charges $350 for a LC... thats quite steep! Is there a better/easier way to get this? Since the initial volumes are small, LC for $350 seems quite steep to me. If thats the norm, what else recourse do I have?

3) Should I go for FOB, CFR or DDP? Whats the best approach and why? If its CFR, would somebody recommend a good customs agent? and the procedure for getting customs clearance and getting it forwarded to my address.

4) I have never visited his factory... I plan to do so in the next few months. What should I be aware of until then? (o'course apart from child labor issues

5) Any other words of wisdom to make this transaction meaningful and stressless.

Since this is a starting business, I am not confident I can commit large volumes. We have decided to pursue a "cautious" approach. In the initial stages, we plan to have multiple small transactions of about $7-$9K each. Like any starting business, currently I am the only one involved.

thanks !