Import from China: Sourcing for products to sell on eBay
By Peter Zapf
you want to import from China? Since most big retailers are now sourcing
from China, smaller businesses and eBay power sellers typically wonder
whether they should do the same, but are often put off by the complexities
of getting started. Like all businesses processes, the process of importing
from China has a lot of steps, each of which has its own complexities. For
folks new to importing, these steps can seem overwhelming. But there are
real business benefits to learning how to import - building import knowledge
and expertise gives you access to a broader range of products at a broader
range of prices than your competitors, giving you more product options to
There are several key areas a new buyer needs to learn to import from China.
These include identifying suppliers, selecting suppliers, paying suppliers,
managing quality control and the logistics getting goods shipped from
overseas to your warehouse. While complicated, once you learn how to put the
steps together and what to watch out for, importing itself is not that
difficult a process.
There are many resources to help you find suppliers. One of the best is
Global Sources' range of magazines where you can get exclusive industry
updates as well as view hundreds of verified suppliers' information.
Most of the suppliers included here sell in large quantities, but many of
them import directly and will sell direct from their US warehouses. Also, it
contains valuable information if you are keen to start importing. You can
download a free sourcing e-magazine of your choice to learn more.
Thirteen industry-specific titles are available.
GlobalSources.com also provides information about thousands of verified
China suppliers and hundreds of thousands of products from these suppliers.
When using online directories, check what steps the directory owner has
taken to ensure suppliers are real. On Global Sources, suppliers listed as
verified suppliers have been visited at least three times, so you can be
comfortable they are real companies, with real people and real offices.
Trade shows provide another opportunity to meet suppliers face to face while
looking at and touching their products; for example, China Sourcing Fairs in
Hong Kong, Shanghai, Dubai and Mumbai offer a great breadth of suppliers for
you to meet with face to face.
Like working with a manufacturer in your own country, the overseas
manufacturers want to understand your business. If you're only going to buy
10 pieces, you're unlikely to get either domestic or overseas manufacturers'
attention. You'll have to go through trading companies or distributors. If
you have an established business that sells good volumes through your
existing sales channels, and have the potential to become a good long term
business partner for the manufacturer, you'll be able to get their
When contacting the supplier, start by explaining your business and then
request samples of the products you're interested in. You'll likely have to
pay for shipping and the product, typically via a wire transfer. In
reviewing the samples, don't forget to review the packaging and instructions
in addition to the product itself. And remember, as the importer you are
responsible for ensuring the product you are importing meets all relevant
regulations. Learn what these are, in part by asking suppliers that
manufacture these products whether they've previously exported to the U.S.
and what certifications are required for that market. You can also go to
your local big box retailer and see what certifications are on similar
products. Finally, communicate frequently with the supplier about all
details of the transaction - not just the product, but also lead times and
manufacturing completion dates. If you're new to importing, think of your
first order as a small initial order that helps you learn how to import from
China, rather than an order that will make a big profit. After you've
learned how to import from China, start placing bigger orders that will
generate more profit.
You'll need to determine the terms of trade. Typical would be "FOB Hong
Kong" which means the supplier pays to get the goods to the port of Hong
Kong, and you pay to get them from Hong Kong to your warehouse. More detail
on FOB and other incoterms is available on this
While everything is negotiable, common payment terms are 30% at time of
order and 70% when goods are shipped. The 30% payment at time of placing the
order gives the manufacturer the money he needs to purchase the raw
materials necessary for your order. Some buyers have negotiated other terms,
like 30% at time of placing the order, 55% at time the goods ship, and 15%
when the goods are received. The payment before shipping mitigates risk that
the buyer won't pay, but then puts financial risk on you as the buyer.
Understand and mitigate this risk through communications with the supplier
(does he seem professional) and by starting with a small order. Typical
payment method is via wire transfer. Shop around - international wire
transfer fees vary quite a bit from bank to bank.
When you write your purchase order or contract, make sure you have clear
options including outs and specific penalties if problems (such as delays)
Having selected a supplier, placed an order, and made an initial payment,
you now have to decide what you're going to do to manage quality control.
Quality control generally begins before manufacturing starts, so after
having seen the sample ask the supplier what steps he takes to ensure
quality control. This can includes both the raw materials he's using in the
product, and also any continuous improvement to the manufacturing process.
Once your order is ready, you have three choices for managing the quality of
(a) rely on the supplier's quality control,
(b) have someone in your company do it,
(c) hire a third party to do it.
If you're placing a small order (a couple thousand dollars), you may choose
to rely on the supplier's quality control; for large orders this probably
isn't your best choice. If you have in-country resources, you may use those
resources to inspect products on your behalf, including not just the end
products, but also intermediate products during the production process and
even raw materials. If you're placing a larger order and need the products
inspected, you may use a third party inspection company (Bureau
Veritas has a history of providing these services to large retailers,
while up-and-coming companies like
AsiaInspection are also providing these services; cost typically starts
at several hundred dollars US) or find a third party project management
Regardless of who does the inspection, companies that are successfully
working with China suppliers on large dollar volume orders seem to share one
characteristic in common. They invest quite a bit of time in quality
assurance and quality control. This means talking to the factory in order to
assess whether they have quality assurance practices in place that result in
continuous improvement, and also developing extremely specific product
inspection criteria. Inspection criteria may include not just the end
product, but also raw materials and components. Clear and detailed
inspection criteria result in a clear understanding between the buyer and
supplier and help avoid problems later in the sourcing cycle.
Shipping and Logistics
You have two main choices for having your products shipped - air shipping
and ocean shipping.
Air shipping makes sense if you need product fast, if product is small
volume/high value, or if your order is relatively small (less than 2 cubic
TNT, UPS and FEDEX all provide this service.
Ocean shipping is your other option. You'll want to find a third party
logistics service provider (3PL), with customs broker capabilities (most
have this), that has experience with the origin port and destination you're
working with. Shipping across the ocean can take several weeks depending on
which port you're coming into; add customs clearance, inland distribution to
your warehouse and you can easily be looking at over 30 days just for
shipping. A good logistics service provider will be able to give you
estimates of end to end shipping times, the cost, and manage the entire
process for you.
As the importer, you are responsible for import duties. Contact your local
customs agency for details about duties for various product categories. The
U.S. International Trade Commission has an
online database of tariffs and duties by product category, while the
World Customs Organization has an index of national customs web sites
which often also provide duty information.
Import from China: Getting Started
If you're new to importing, start slowly with the intent to learn the
process. Find suppliers and select one to order from. Place a small order
and go through the process of working with the supplier, logistics service
provider and getting the product shipped to your warehouse. Think of your
first order as an investment in learning about importing. With knowledge and
experience of the importing process, you can work with China suppliers to
put your own brand on the products you order to really super-charge your
business. For importers in the U.S., check with the
Importers in other countries can check with their national customs agency
for more details on importing.
More resources to find products and suppliers from China: