Whether you are a retailer, a B2B enterprise, or any kind of operator in the world of eCommerce, it’s likely that you have considered importing products from China – or, already do so. However, whether your business is large or small (or, whether you are performing ‘once-off’, or regular and ongoing transactions) there are some important pointers to keep in mind when considering importing from China.
Here are 6 quick tips to ensure that you aren’t ‘going in blind’ when making these kind of transactions in the global marketplace.
1. Capitalise on current exchange rates
It is always necessary to capitalise on current exchange rates each and every time you import from China. You can easily check the ‘going rate’ by reviewing sites that readily offer accurate and consistently updated information, such as this webpage displaying cba exchange rates.
Another way to track the value of a nation’s imports (and exports) is to analyse a merchandise trade balance report. This report is released monthly by most major nations and offers information on biggest trading partners, the largest product categories ranked and trends in imports/exports over time, as well as other useful information aggregates.
For example, if you are importing goods from China to Australia, this transaction will always result in a favourable, or less than favourable result (dependant on the prevailing exchange rate). By taking into account the current exchange rate (and, potentially the results of a merchandise trade balance report), you can capitalise on current exchange rates and plan transactions accordingly.
2. Abide by the relevant laws
You can’t just go importing ‘any old thing, any old way’. It’s imperative to abide by relevant legislation in your homeland jurisdiction to avoid any penalties, or potential prosecutions. This includes acquiring any necessary permits, quarantine restrictions and treatments that apply to your specific category and type of imported goods.
For example, if you are importing goods from China to Australia, you will need to understand and abide by national government law to ensure the process is successful. All goods through Australia must be ‘cleared through the border’ via Australian Customs. The Department of Home Affairs is the relevant body that can provide you with necessary information such as import clearance requirements, prohibited goods and import permits.
3. Find a legitimate supplier
Successfully importing any goods (whatever the volume or frequency) is all about finding a trustworthy supplier. This in order to maintain standards of quality and accountability. There are some effective measures that may be used to decide whether a company is legitimate. You can also use an overseas trading company, should you feel like the risk of sourcing a supplier independently could potentially outweigh the benefits.
For example, if you are researching a supplier based in China, consider cross-checking for a listing on websites like madeinchina.com and alibaba.com. The Hong Kong Trade Development Council, China Checkup and the database of the Chinese Supreme Court are other useful points of reference.
4. Calculate real costs
Of course, you should always consider the real costs associated with importing goods. These are known as real landed costs, and should always be factored into your profit and loss statements and financial projections as well as, of course, your pricing if you are planning to resell imported goods as a retailer, B2B or eCommerce enterprise.
For example, if you are importing from China (to anywhere offshore and for any purpose), make sure you have all your costs accounted for. This could include such things as tariffs, clearance fees, customs duty, goods and services tax (GST) and other taxes.
5. Learn how to negotiate effectively
Negotiating skills are key to conducting any successful import arrangement. This takes into many conditions such as cultural etiquette, language barriers and, most importantly, finding that ‘sweet spot’ ie. where you pay the right price for the right quality.
For example, if you are importing products from China it may pay to brush up on your language skills, and to develop an appreciation for the art of haggling ie. to find the margin where your supplier can make enough money to stay in business and pay their shareholders and employees, but you still make enough profit yourself.
6. Always do your research
When all is said and done, you should do as much research as possible when importing goods from China. This includes those facets already touched on (such as legalities, logistics, legitimacy), plus many more. Some of these (for example, understanding the fluctuating value of raw goods) are crucial in making a successful negotiation. Others are just pure common-sense (like always getting a product sample before signing a deal). The point is to remain ‘on the ball’.
For example, if you are a commercial enterprise seeking to formulate your product base through imports from China, it is necessary to keep up-to-date with current exchange rates and trade laws. It is also crucial to pinpoint the most accountable and reputable suppliers, to calculate all associated costs, and to keep informed about prevailing economic indicators, at all times.