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There are some common mistakes that might be ignored easily the first time when importing products from China suppliers.
To be well-armed and then save your cost as much as possible, here this blog concluded top 10 common mistakes from 4 aspects that newbies make when importing from China.
When it comes to what kind of product to source from China, there are so much to dig, but two kinds of product are not recommended – complex products and counterfeit products.
Complex products’ quality is hard to be maintained, there’s a great chance that you’ll need to get different parts of the product from different factories, which is gonna be an extra headache to many importers. Not to mention, when the design of products gets too complicated, it’s even easier for the supplier to misunderstand your requirements.
Counterfeit products can’t help you gain more profit, it’s just a bad business. Yes, in China there are many counterfeit products, but selling them might get you into legal troubles, so think twice before you decide.
This is a common mistake mainly concerned with people who want to do ODM from China. China’s manufacturers operate based on the buyer’s specifications. Sourcing without sending the exact specification documents may result in poor product quality.
Getting the ideal profit margin is not just about finding a good supplier and getting a quotation. You’ll also need to take the landed cost of products into consideration.
The landed cost is the total cost of a product that you need, in order to get the product successfully shipped to your own warehouse.
Sometimes the price difference among the same product could be very subtle. However, there are many factors behind the number, the material, components, dimensions, etc.
Spending time in research and making price comparisons is very important for your business to stay profitable.
When accepting offers, don’t just go with the lowest bidder, you also need to figure out the capacity of the supplier on manufacturing at a different level of quantity, can they still keep the competitive price offer when your business scales up?
Never assume that your supplier fully understands your requirements, after all, there’s always the language barrier. Sometimes, the factory you work with didn’t ask any questions, which does not mean that they totally understand you, maybe they just fear losing your deal by raising too many questions.
There are three types of suppliers when you import from China – Manufacturers, small trading companies, and sourcing agencies.
Knowing which type of companies that you are doing business with is important, as sometimes the supplier you found on Alibaba, might not be the real factory but a trading company.
No matter what size of your business is, it’s recommended to work with a sourcing agency, since they are in a better position in sourcing products, logistics, and shipment.
Do not use unsafe payment only because the supplier suggested so. When it comes to money, it’s better to get serious. You can review the supplier’s financial record, ask them to provide bank details, and check their official website, certificates, or Alibaba, etc.
A standardized quality audit can help you choose from several suppliers. A third-party inspection will provide you with many objective understandings about the supplier you choose.
Don’t decide just by pictures you see, a quality check is necessary because it helps you understand the supplier’s real ability, get the potential risks erased before placing large orders, so your business stays safe.
When importing from China, you have to consider the most appropriate mode of shipping, shipping by sea is not always cheaper than shipping by air.
Another common mistake when it comes to shipping is not preparing the correct customs declaration and documents. For paperwork and documents, even just a slight inaccuracy can lead to serious delays.
And at last, here is an extra mistake you might be making, which is being afraid of starting importing from China. Maybe after reading, you will think that it’s too risky and too much trouble to import from China. Don’t be. China is still a great place full of opportunities for you to scale your business and maximize your profit margin.
Not having a contract
A contract that can be enforced locally is definitely very useful. However, game theory teaches various strategies to adopt in “non-cooperative” situations, and you can adopt them. For example: “take little steps” (i.e. issue small orders), “verify constantly” (i.e. QC) and “use a third-party” (i.e. a letter of credit).
Trying to manufacture small quantities in China
It will usually push you in the arms of small trading firms that deal with small workshops. The result in 90% of cases: quality disasters and/or long delays. But there is a solution if you can purchase non-customized items: produce them in coordination with a non-competing importer. Hard to pull off, I admit, but worth giving a shot!