Doing business with China can prove to be a highly profitable venture. There are many avenues for acquiring low-priced products and selling them for a higher mark-up. By finding the products that are in high demand, along with knowing which ones to avoid, you can make a great deal of profit with a relatively small amount of work.
However, importing goods from China can also be quite costly if you don’t fully
understand and follow the proper procedures with regard to importing and
exporting goods. This type of business can be quite risky – especially at the beginning – if you are not familiar with the right suppliers and the right products. Therefore, you should not “cut corners” or take any shortcuts, but rather you should learn the proper procedures and take the right steps to understanding how to work this business.
For example, a considerable amount of time and money may be needed in order to establish the relationships that are necessary for getting your business up and running, as well as aligning yourself with the proper product suppliers. But, if you are knowledgeable and well prepared in the initial stages, your success can be unlimited.
Why Consider China for Importing?
When considering an import export business, China should be near the top of the list as your product suppliers. With roughly 1.3 billion people, China boasts the world’s largest population, along with the fastest growing economy on the planet. Therefore, it should come as no surprise that it is also home to the globe’s biggest exporter.
In many cases, products are much cheaper to produce in China that they are in other countries of the world. In fact, China is known for exporting a wide variety of low-priced items. These can range from electronics to clothing to hardware and tools, to furniture and appliances, and even vehicles. Many of these items can easily be marked up and then re-sold for a tidy profit – in some cases, for more than twice or three times what they cost you to purchase – which can result in positive returns for your import export business.
Today, with the vast reach of the Internet, you can run your import export business from the comfort of your home computer in your living room – which still allows you to converse with product suppliers in China and review their offerings, even though they are thousands of miles away.
Although there are numerous great products that you can import from China, the best products to do so with will be the ones that make you and your clients the most amount of money for your particular needs. But while this may seem like an easy process, it can actually be somewhat complex, confusing, and costly if you are unsure of just exactly what to do. And, in some cases, the market place is ripe with scams for those who are unaware. That is why it is so important to know and understand the market place, as well as the potential products that are available, and the suppliers that are out there to work with.
How to Find Suppliers in China
When importing goods from China, certainly one of the first things that you must do is locate good products and reliable suppliers. Your ultimate goal should be to find good suppliers for any product that you can make money on, and then focus on growing your sales. While it may not be easy at first, it will be well worth it overall.
It is a known fact that China exports products of all types. Unfortunately, many of the imported goods from China are counterfeit. Purses, shoes, jackets – all of these items can be found with a look and feel of extremely authentic quality, and because of this, these “fakes” are easy to resell at a very high mark-up.
Many China import companies will attempt to offer you a “deal you can’t refuse.” It is important that you not give in to temptation, though, and try to resell these bootlegged products to unsuspecting end buyers. Even worse, if the rightful manufacturer were to discover what was happening, you could open yourself up to a potential lawsuit.
Therefore, one of the biggest cautions that you must abide by is to be careful of the products China exports – otherwise, you could find yourself in deep legal trouble, essentially costing you all of the money you make, plus a great deal more.
One way to avoid this altogether is to simply bypass any type of branded items such as those with specific logos or designs. An example would be toys with Disney characters or clothing with specific brand logos such as Nike or Polo.
Any time you import products, China still provides several advantages – starting with low price. China has been well known for years for its low cost of manufacturing – from toys and games to electronics.
What Type of Products to Offer
In terms of products to offer, there are some guidelines that you should follow when deciding what to sell. For example, you should ideally limit your imports from China to the following characteristics:
- Low Price – Typically, when importing products from China to resell, you will want to keep them on the lower end of the price scale. This means that they should be in the range of $10 to $200. Anything with a higher price tag will likely require additional quality control, which will also make it more difficult to ship.
- Small and Light Weight – Small and light weight is also a biggie when it comes to China imported goods. Because shipping can really eat into your profit margins, you want to ensure that the less headaches you have in this area, the better. Therefore, you should ideally cross large appliances and furniture off your list. This also means that non-breakable items should be at the top of your list, as these can typically lead to fewer returns – and thus, fewer refunds.
- Simple – When you import China products to resell, you should also consider more simple items. What does this entail? Primarily it refers to something that is easy to manufacture without much room for error. With this in mind, you should forgo products like complicated electronics with a lot of “bells and whistles” on them – at least initially. Thinks about it this way – the more that could go wrong, probably will go wrong, so you will be doing yourself a big favour by keeping your products simple.
- “Evergreen” – Because you want to keep a constant supply of buyers year-round, you should ensure that you aren’t selling products that are seasonal or that fall out of favour. Otherwise, you’re just going to end up with a lot of worthless inventory that you’re not able to unload. By not going with seasonal items, you can essentially keep a continuous stream of buyers, as versus being pressured to make all of your money during just one short time period of the year.
- In Demand – You will also want to make sure that the product or products you are working with are in high demand. That way, you will be able to more easily find a buyer – and you can in turn, earn your profit. While you may be able to find a product that has a nice profit margin in it, if it is not in high demand with potential end buyers, you will not have much profit potential.
Some Important Factors to Consider
While there are many advantages to importing products from China, there are also some things to consider – especially in terms of the products you need to avoid. For example, although there are numerous quality product producers to be found in China, keep in mind that there are also many that offer counterfeit and “knock off” items.
These can range from fake designer clothing and purses, to jewellery, to CDs and DVDs. While you may be able to make a great deal of money through mark-ups – or even by purchasing these products and then selling them to end buyers on your own – it is not worth getting into legal trouble by having the rightful trademark owners come after you if you get involved in offering these items.
You will also want to ensure that the product or products you choose to import from China are permitted in the country that you wish to ship them to. This is because there are certain goods that are not allowed to be imported. Certain items are not allowed to be imported into certain countries, because different nations have different prohibited products.
You will also want to ensure whether or not the goods that you intend to import will be subject to any type of permits, regulations, and / or restrictions by the government. As the importer, it will be your responsibility to be sure that the items are in compliance with any number of rules and regulations.
As an example, importing items that are unsafe, that do not meet certain health code requirements, or that violate certain restrictions can end up costing you quite a bit of money in penalties or fines. And, at the very least, such items could be detained – or possibly even destroyed. This, too, could be quite costly to your import export business.
What About Exports?
As you determine your business’s goals, you will also need to decide whether or not your company will export goods to China, too. Over the past few years, Australian exports to China have risen greatly, so this could mean that the doors of opportunity are opening wider in this area. When exporting from China, however, there are a number of guidelines that should be followed, and it’s important to be aware of what can and can’t be exported.
What are some items that Australia has been buying from the U.S. lately? The items at the top of the list include computers, chemicals, transportation equipment, crops, and machinery. So, for those businesses that focus in these particular areas, importing to China could very well lead to riches in the future.
How to Take the Next Step
Any new business venture is likely to take some time and effort to get up and running. Starting an import export company is no exception. However, the potential to make a nice profit can be expedited when operating an import export business – especially when importing products from countries such as China.
The low priced items that can be acquired from many of China’s suppliers make this an excellent market place from which to consider your sourcing. Provided that you can ensure that the products you work with are in demand and do not cost too much to ship, you will likely be able to lock in a nice profit for yourself and make a nice living in the process.