Notice! How to Import Goods from China and not get Ripped OFF!

I've been noticing that importing directly from China has become somewhat intriguing and has spurred many of people to start researching the ins and outs of Import / Export.

So here's what I've come up with for suggestions.

Free trade agreements between America and China have simplified importing. Express delivery services (e.g., UPS, DHL and FedEx) have major distribution hubs across China, with guaranteed 24 hour next-day delivery between major cities in China and America. Customs requirements remain stringent on some good from China; but even small business owners and individuals can do business directly with Chinese businesses. Read on to learn more.
Difficulty: Moderately Challenging
Instructions
Step 1
Start importing goods from China by finding the best distributor; dealing directly with a factory is incredibly difficult even for Chinese speakers. A broker or agent will call around for the best possible price. Based upon the size of the order, brokers and manufacturer's agents can get a decent discount on the price.
Step 2
Try online marketplaces such as China's giant Alibaba.com. Alibaba is a giant collection of small to large businesses offering every product imaginable. Many of these "businesses" are resellers. They act as brokers with the manufacturers and distributors and will undercut anyone to get a deal. Alibaba is the best place to find what's for sale in China.
Step 3
Deal directly with a reputable agent. Shipping through Chinese customs requires a skilled professional shipping agent. The agent must be licensed with the Chinese government in order to ship overseas. All goods must have several official documents accompanying them through the customs clearance process.
Step 4
Learn the American regulations for importation. Textiles are a very difficult item to import from China due to the overproduction in China and the U.S. government's attempts to protect the American textile industry. The Chinese government has classified painted silk scarves as works of art to allow for greater export into America.
Step 5
Import a small amount of goods for personal use and pay a minimal amount of customs duty. Don't try to import large shipments on a regular basis and claim them as gifts to avoid paying duties. The amount of import duty is paid at time of delivery, or arranged for at time of shipment if shipping with an expedited express shipping agent such as UPS.


See next post for more information.

Peace Crazy Horse.

How To Import From China by: Don Grubee's Chinas Best Importers
How to Import from China
Preface : Importing is no problem if done correctly and a nightmare if not! E-mail, with Excel and Word doc. attachments are essential communication tools on both ends : Also Digital picture attachments can save a thousand words. Steps 1 thru 12 denoted below and full awareness of the main 2 parties are the important steps to get well understood.
Goods arrive by sea freight on the USA west coast in 15 to 20 days after leaving China port depending on the time of the year. East coast deliveries take about 10 days longer. After Oct 1st Christmas rush begins and shipping rates go up with time delays encountered at both USA and China ports. NOTE : Minimum orders from China can be as little as one skid pallet, LCL. Larger orders are sent in 20 ft. and 40 ft. containers. A 40 ft. HQ, high cube container is the maximum size. There are weight limits that 20 and 40 ft containers can carry. ie: 20ft is 17.5 metric tons. / Std. 40ft and also HQ 40ft. is 22 metric tons. One metric ton = 1000 kg or 2200 lbs. One US ton = 2000 lbs. 2.2 lbs./kg .

NOTE:
The two most important parties you deal with will be your Freight Forwarding Company Agent and the China Export Agency or the China Factory if ordering direct. They must be able to communicate well with the essential 5 W`s. “who – what – when - where and why” in clear English.

Party one
A Freight Forwarding Company is responsible for delivery goods from China port to your dock. They obtain your customs clearance and pay all unloading fees and duty and total shipping cost. They normally send one bill for all their service after you receive your goods.


Party two
The China Export Agency or the China Factory: If the factory has their own export license, they must over come language barriers and know China Export Custom laws; A good China Export agent handles many obstacles for you. They find the factories to make your products, negotiate the deals and expedite all matters in China including any warranty issues arising after the sale. A good export agency must have good technical product knowledge. Those that don’t, just talk in circles with English that does not make half sense! A good export agency inspects what you expect!

An alternate to going thru a China Export agency if you want to order direct from China factories is hire your own contract agent in China and pay him/her a monthly salary to oversee your interest as your fiduciary agent and deal with the factories in your behalf. Many large companies have their own people in China to oversee there interest.

Legal Requirements: China requires an export license to ship goods out of their country. In the past all exporting must go thru an independent export agency, however today, most large factories now have their own in house export license department with some qualified and some that are not. Large factories are hiring kids fresh out of college to do translations and run their export department. Few of the graduates have any product knowledge and factory owners do not speak or read English well. Small factories without an export license must still contract with local export agencies to export their goods. China GAS is one such agency. Some export agencies advertise China products on the internet or by catalog and pose as being the actual factory. Beware, they are just agency brokers contracted to buy from factories and sell to any and all markets that will buy. TIC > This is China!

Export agencies make their money from the 13% VAT ( value added tax ) less 27% tax on refund amount rebated from the China government to them. In some contractual cases they return a percentage of the rebate to the factory and or charge the buyer a commission or add a product mark up. In some cases an export agency will charge the factory or the buyer a percentage commission if their staff must be deployed to do in house factory supervision or product development work and sometimes these can be hidden charges you are unaware of. It has been rumored that China will soon reduce or eliminate all VAT. The upcoming trend in the next few years will have a commission added to buyers invoice by export agencies and factories with their own license will probably raise their prices. The time is right. Start buying now while VAT is still being rebated buy the Chinese government..

12 Basic Steps to Importing
Step 1. Send an RFQ, ( Request for quotation ) This information process is used to confirm such things as quantity, product description and specifications, price quotes, payment terms, and lead times. China GAS will translate all necessary information into Chinese so the factories can read it.
For your convenience, a RFQ can be done by using our click icon:
China GAS will qualify you as a able and willing buyer, issue quotations, lead times, procure samples, negotiate pricing and terms on products you are wanting. China GAS will accept your purchase orders and expedite delivery to port. RFQ - ITEM WANTED

Step 2. Contract with a forwarding agent in your country to get them to handle all logistics from China Port including ocean freight, cargo insurance, port handling fees and all freight shipping logistics from China port to your dock or city, Your forwarding agent will send you one bill for all this service. If you have good credit ratings, in most cases you can establish direct billing for this service after you received the goods.

USA: A company in the freight forwarding business in the USA that we highly recommend is D. Kratt Int. Co.: They can handle shipments to anywhere in the USA from China port. D. KRATT INTERNATIONAL attn. John Bentz vp or Dave Kratt pres. 2500 W. HIGGINS ROAD SUITE 140 HOFFMAN ESTATES, ILLINOIS 60185 PH# 847-490-8811 begin_of_the_skype_highlighting**************847-490-8811******end_of_the_skype_highlighting begin_of_the_skype_highlighting**************847-490-8811******end_of_the_skype_highlighting FAX# 847-490-8822

If using FOB your PO should state: Terms fob: China port; The term fob: means the factory pays for shipping goods to port and all loading fees. The contract Freight Forwarder at China Port is assigned by the primary Freight Forwarding Agent in your country. The assigned Forwarder at China port takes possession of the goods and clears China customs. They make ocean booking and forward the Bill of Lading to the Export Agency or factory so a Commercial Invoice can be made.
See Chart below for explanation of Shipping Terms;
Step 3. Optional : It is desirable, but not essential that you have a DHL international direct billing account set up so samples can be sent to you. Most China factories are glad to send free samples on inexpensive products if the freight is paid by the customer. They normally will charge money for expensive samples over 5 to 30 usd depending on their policy.

Step 4. On existing products, China GAS will reply with a price quotation and lead time required. If the product is to be designed and developed the factory will ask for target price , samples , or drawings and more information. All factory replies are forwarded back to you by e-mail for your response.

Step 5. After the price negotiation, selling terms and product sample confirmation process is completed your official PO is forwarded to China GAS to sign off as being complete. Only after you receive a Proforma Invoice and comply with payment terms will your PO will be forwarded to the factory translated in Chinese language where necessary . Your official PO can be scanned and sent pdf or locked as “read only” in Word or Excel doc. Faxed PO’s are also accepted. Fax# 86 519 810 2221
PO forms are available from China GAS for your convenience that show all required information.

See steps 6-12 in next post!

Peace Crazy Horse.

Here's step's 6 thru 12,


Step 6. After receiving your PO and confirming all information, China GAS will then e-mail attach a Proforma Invoice to you as totally confirmed. This document shows all parties involved and what product and qty. you ordered. It shows bank wire information and or selling terms, confirms factory promise ship date, and normally tells weights and skid sizes.

Selling Terms

New account payment terms are normally 20 to 30% deposit wired TT after receiving your Proforma Invoice and balance due at time of shipment. Send notice to China GAS when payments are sent and how much.

Irrevocable Bank LC terms are also normally accepted on high dollar orders in excess of 10K. China Gas will work on getting better terms for you as time goes on and the factory begins to see your steady business volume. Unless an LC is used, TT Bank Wire transfer money to the China bank called out on the Proforma Invoice.

Step 7. Send a copy by e-mail of your PO and or Performa Invoice to the freight forwarder of your choice denoted on your final official PO. Do this at least min. 2 weeks before the shipment is due to leave the factory so your forwarder can schedule ocean booking and consult the factory for receiving details.

Step 8. China GAS will expedite your order at the factory and make sure it is handled correctly to your desire. If required; we will travel to the factory to inspect shipments to specification.

Step 9. When your goods are ready for factory shipment the final payment can be made by TT and China GAS notified. Disregard if open account terms, DA, bank irrevocable LC terms or if 100% payment was made at time of confirmed PO.

Step 10. China GAS will make sure your order is processed correctly, on time and shipment is delivered to your freight forwarder at China port. We will select the appropriate China Customs product code as set forth in China Export law manual . China GAS will complete the Commercial Invoices, Packing List, and Bill of Lading documents; If denoted on your PO we will submit Certificate of Origin and or Certificate of Quality sometimes referred to as Certificate of Conformity. In countries where required we will provide our certification that no wooden non-compliance packing materials or skid pallets were used in the shipment . We will forward the original copies to the "Notify Party" called out on the PO so your shipment can clear Customs at the Port of Discharge . All shipments must say “Made in China” to comply with US Custom law if being sent to the USA.

Step 11. Contact your forwarding agent to get delivery status and order tracking once the shipment goes on ocean booking. This is call “shipment is on the water” is a cliché’ often used . Unless you have your own USA Custom Clearance broker, the forwarding agent will clear customs for you. The forwarding agent in your country as Notify Party receives the original Commercial Invoice, Packing list and Bill of Lading is sent by China GAS via express air mail.

Step 12. When your shipment arrives check the goods and confirm with China GAS as received OK. If your shipment has any errors or defects please contact China GAS immediately. China GAS has dual fiduciary agent responsibility and works to satisfy both buyer and seller. Warranty issues can be handled by product replacements , returned goods, credit memo against future purchase, or cash reimbursement depending on circumstances involved and factory policy. China GAS represents only those factories who have known integrity and will back up what they agree to do in a legal formalized business plan. This reduces your overall financial risk. No secrets in good business. Yes; there is always risk when dealing sight unseen half way around the word.

See next post on how to spot a scammer!

Peace Crazy Horse.

How To Spot a Scammer!

Now that you know that buying already branded products is NOT part of how to import products from China, let's go over a more detailed five step plan for avoiding scammers:

1.Look closely at their products.
Does the wholesaler you are looking at carry Brand Name types of products? If so, just stay away. You want to find a wholesaler that carries inexpensive UNBRANDED products. This is the right way how to import products from China.

2.Check the website's Alexa.com rank and Google page rank.
These two ranking systems will give you an idea of the level of traffic that comes to the wholesaler's website on a regular basis. If their traffic level is high, they are probably legitimate. So, if you are wondering how to import products from China, keep in mind that it always helps to check these ratings.

3.Look closely at the wholesaler's domain name.
Is their domain name is something like "gucciforlife40.com" or "nikeadidasrebok.info"? Sites whose domain names contain big brand name product names are probably scammers. They are just trying to use the popularity of these brand names in order to lure customers like you to their website. Turn around (virtually) and walk a way.

4.Make sure you look for contact information.
It is a general rule that wholesale websites with no contact information other than an email address are NOT legitimate. It's best to leave them alone. (However, you should also note that merely having a physical address and phone number listed does NOT guarantee that a website is legitimate. You should still use all nine other criteria to evaluate them fully.)

5.How do they make you pay?
As a general rule, never pay a wholesaler through Money Gram or Western Union. This is folly. In the best scenario, you should pay with credit card or PayPal. However, many legitimate wholesalers will not accept these options and instead require the use of wire transfer. While this option is never completely safe, you can increase your chances of success by always making sure to only transfer money to the company's BUSINESS account and never to a personal account.



6.Company Email Addresses
Before you place a large order with a Chinese wholesaler look carefully at the type of email address they list under their contact information. If they have an email address based at Yahoo or Gmail this is very unprofessional. This lack of professionalism is common to scammers. A reliable wholesale website should have a contact email that is based on the wholesale company's own domain name (e.g. [email protected])

7.WhoIs.net
This website is invaluable in its ability to separate the reliable wholesalers from the fakes. Type in any URL into WhoIs.net and they will tell you how long that domain name has been registered and to whom it is registered. Generally speaking, a company whose domain name has been registered for a longer time is more likely to be genuine. It is also a positive signal if the name of the owner of the domain name matches the name of the wholesale company itself.

8.Prices
Are the prices on the wholesale website reasonable? Or are they far too high? Maybe they're ridiculously low? Pricing on the items you are looking for should not vary too greatly from your expectations as long as you have taken the time to see how much similar products cost elsewhere. If the pricing on a wholesaler's website is ridiculously high, too-good-to-be-true low, or just generally sporadic; this is a very bad sign and you should stay away.

9.Search Google
Any legitimate website that has been around for a while will be searchable on Google. If you enter the company's name into the Google search engine and nothing comes up, this means that that site receives very few visitors. In the best case, this could mean that they serve only a small niche market and are still legitimate. However, most of the time they are not popular simply because they are not legitimate. If they fail some of our other criteria as well, you need to just forget about doing business with them.

10.Don't Forget Common Sense!
The first nine steps given here are very reliable ways to check the validity of a Chinese wholesaler. However, when learning how to import products from China, you still need to use common sense. In fact, no ten step program can ever omit the need for a little bit of every day discernment. If a website has horribly unprofessional design, has ridiculous bargains, or even if it just doesn't feel right; take as many precautions as you possibly can. No amount of safety is ever too much.

I have seen so many scams on the web that for me it usually takes just few seconds to spot the signs of a scam operation. However, there are some pointers which could help you to determine whether the supplier is legit or not. Here ia an easy scammer prevention filter system:


1.Products for sale

Just wanted to remind you – if there are branded electronics, designer clothing, shoes & handbags, DVD Box Sets for sale on the Chinese website, it's a clear scam – stay away!



2. Alexa Rank & Page Rank

I know that there aren't many people who use these two parameters to judge whether a supplier is scam or not but for me it works very well. In fact, I can't remember a single case when this has let me down.

What is Alexa rank? To cut a long story short, it shows how many visitors visit the particular website. The figure shown by Alexa isn’t the number of visitors but the website's place in Alexa's rank, 1 being the Most visited site in the World. So if a website has Alexa rank of 100 000 – it's the 100 000th most visited site in the World.

These numbers ARE NOT very accurate but generally can be used as a good guideline. If Alexa rank is below 1000 000, website is consider to be fairly active. I always use Alexa rank in conjunction with Google Page Rank.

Some websites can have Alexa rank of only 2 or 3 million and still be legit suppliers, though. Especially in tight niche markets where the demand is much lower. That's why you want to look at the Google Page Rank as well. If a website has Alexa rank of 2 million and its Google Page Rank is 3, there's a great chance that it's a totally legit supplier.

What is the Google Page Rank? To put it simply – it shows how many other websites have mentioned the particular website. On the Internet it counts as a link pointed to the website. You can view these links as votes the websites give to each other. The Page Rank varies from 0 to 10, with 0 being the lowest and 10 – highest. So for example, if a website's Page Rank stands at 7 it's very popular in terms of how many other websites link to it. If a website's Page Rank is 0, it basically means there are no links pointing to it.

One thing though – Google doesn't update Page Rank on a daily basis so all new websites will show Page Rank 0. S, it doesn't automatically mean that it's a scam – it may be just a new website, created in the last six months or so.

Why I'm telling you all this? Because in general the scam websites won't have neither high Alexa Rank nor Google Page Rank.

As I said – this is just one of the filters you can use but in many cases, this will be the only one you need.

You can check both Alexa Rank and the Google Page Rank on SmartPageRank or download free toolbar for your Internet browser.



3. Domain Name

This is a small one. If you see a popular brand name in the websites domain name, it's almost a guarantee that it's a scam. Scammers widely use domain names containing Brand names to build trust. Domains like Nike666.com or iPhone333.com and similar ones are clear signs that a website is a scam and won't be online for a long time.

Also, try to avoid cheap domains like .info, because they could be used to build a large network of sites to save money on domain registration.


4. Company Information

What kind of company's information can be found on the website? Is there a full address with the company's registration number, phone number and fax number? Sure, this all information may be made up, BUT if the website doesn’t have any information apart from a weird contact e-mail, it's most likely a scam.

The sad fact is that we can't really check Chinese companies’ registration numbers online. There are websites where you can check them, but they are in Chinese, so it's not an option really. However, you could use specialized company that offers such services for a small fee. If you're serious about making a business by importing products from China, I'm sure that $50 is a good investment to check whether a company you want to deal with is officially registered.

Just do a Google search or take a look in The Wholesale Forums – there are several individuals and companies offering this service, even for free!


5. Payment Options

What payment options are available?

If they accept Western Union or Money Gram – it's most likely a scam. But keep in mind that when dealing with suppliers from China, in most cases you won't be able to pay by credit card. This is especially true when dealing with manufacturers directly.

Wire transfer, although totally un-safe, is commonly used payment option. Some companies accept PayPal for regular customers.

If the wire transfer is the only option, make sure that it's on a company's ACCOUNT – not a personal one! This is a commonly admitted mistake that can be easily avoided. Don't believe stories, like: “Our company's account is experiencing some technical problems, here's our boss’s account – bla bla bla!” It's a total bull****! If you send money via Wire Transfer, send it ONLY to the company's account.

Next post I share information regarding popular payment methods!

Peace Crazy Horse.

Kevlarr said:

I ordered a Xenon HID headlight kit for my wife's car a few weeks ago, the seller was in China, order went it Saturday night, parts were shipped Sunday (Monday in China), arrived in SF CA 16 hours later and they were delivered to my door Wed. afternoon. I was totally amazed at how fast the shipping was especially since it was free.

Click to expand...

Kevlarr, be very careful sometimes scammers will Lure you in with great prices on first order, then when you order again in bulk they burn you!

Always a good idea to be weary of 99% of these companies!

Peace Crazy Horse.

Popular payment methods in international trading

Popular payment methods

There are many ways to make and receive payment in international trade. Due to the physical distances between buyer and seller, and the fact that the transaction may have taken place without the two parties actually meeting, minimizing exposure to risk is on the minds of both parties. The buyer wants to make sure they receive their order in acceptable condition and on time, and the seller needs to know they will get paid for it. Below is a table of the most common payment methods for trade. Choose allocation of Risk and Payment type that best suits your needs!

1.Payment Type,
TT or Cash Advance

Details of T/T,
T/T is the easiest payment from and is typically used when samples or small quantity shipments are transported by air.

T/T is also used between buyers and sellers who have already established a mutual trust, as this negates the risks associated with this, the fastest and cheapest form of payment.

Documents like air waybills, commercial invoices and packing lists will be sent to you along with the shipment in the same aircraft.

As soon as the shipment arrives, you, with documentation, can clear the customs and pick up the goods. Shipping happens only after money is safely in seller's ****.

It usually takes 3-4 days for such a wire transfer anywhere in the world.
Allocation of RISK,
100% buyer risk


2.Payment Type,
Letter of Credit (L/C)

Details of L/C,
The L/C is a guarantee, given by the buyer's bank, that they will pay for the goods exported, provided that the exporter can provide a given set of documents in accordance with clauses specified in the L/C and in a timely manner.

The technical term for letter of credit is "Documentary Credit."

Letters of credit deal in documents, not goods. Thus, the process works both in favor of both the buyer and the seller.

Simply put, a letter of credit is a letter written by the importer's bank to the exporter. It verifies that the payment will be guaranteed when the bank is presented with concrete documents (bills of lading and freight documents).

Most letters of credit are "irrevocable" once the importer has had them sent, which means it cannot be changed unless both the buyer and seller agree.
Allocation of RISK,
Evenly shared

3.Payment Type,
Escrow

Details of Escrow,
Escrow is a legal arrangement (and most commonly a payment arrangement) whereby money is delivered to a third party (called an escrow agent) to be held in trust (“in escrow”) pending the fulfillment of condition(s) in a contract, whereupon the escrow agent will deliver the payment to the proper recipient. Typically, escrow is used when the Buyer and Seller are unknown to each other.
In an international trade context, after the Buyer and Seller have agreed to the transaction, the buyer puts the payment in escrow by paying the escrow agent, which both parties have agreed to use. The seller sends the shipment and upon acceptance by the buyer, the escrow agent releases the payment to the seller.
Allocation of RISK,
Evenly shared


4.Payment Type,
Document Against Payment/Bill of Exchange
(D/P)


Details of (D/P),
The exporter ships the goods, and then gives the documents (including the bill of lading necessary to claim the goods at the foreign port) to his bank, which will forward them to a bank in the buyer's country, along with instructions on how to collect the money from the buyer.

When the foreign bank receives the documents, they will contact the buyer and provide documents to the buyer only when the buyer pays.
Allocation of RISK,
Mainly with supplier


5.Payment Type,
Open Account

Details of Open Account,
Opposite situation to T/T: The exporter receives payment only after the buyer has received and inspected the goods.
Allocation of RISK,
100% seller risk

If anyone would like to add their experience with importing please share it here with the forum!

Peace Crazy Horse.

PS Why take the Risk just go with a Recognized Freight Forwarding Company Agent.

Remember:
The two most important parties you deal with will be your Freight Forwarding Company Agent and the China Export Agency or the China Factory if ordering direct. They must be able to communicate well with the essential 5 W`s. “who – what – when - where and why” in clear English.