China is very attractive to buyers and importers trying to make extra cash. The prices of products are very cheap, and importers see this as a wonderful opportunity to add a fat margin and earn big. But what happens once the China trade route backfires, and you end you up making a mistake that costs you time, money, and effort?
This is why you should never stop refining your import practice. To help you excel at it, we have compiled a list of 15 common pitfalls you should beware of.
1. Believing That Small Orders Result in Better Quality
There are two groups of manufacturers in China. In one group, we have those that are willing to accept small orders, and in the other, the ones only working with large orders. Importers often make a mistake of believing that placing small orders ensures good quality, product, and packaging wise.
You should know a few things about the manufacturers. The manufacturers willing to take small orders often have access to limited resources and assets. This is why they often ship poorly packaged goods, and often don’t comply with your product and packaging specifications.
Either order big, or be ready to go through a couple of shipments before a small manufacturer finally understands your specifications and requirements.
2. Forgetting to Take Economies of Scale Into Account
Importers commonly have no regard for how the economies of scale work. Ultimately, this results in huge landed costs of imported products and lost margins. The most important factor to consider here is your logistics cost per unit.
The shipment plays a vital role here. Less than Container Load (LCL) shipments can turn into an expensive adventure. Make sure to take all costs into account. You have to know to which extent to scale your order to make it worth your while.
3. Asking the Supplier to Finish the Order Urgently
Manufacturers in China are not in the game just for the laughs. They want to profit as well as you do. If you insist on them to manufacture and deliver urgently, they will do so. But this comes at a price as “haste makes waste”.
You will end up with a lot of quality problems to deal with. And quite often, the money and time you have to invest to fix these issues outweigh the time and money saved due to urgent manufacturing and delivery.
4. Wrong Assessment of the Profit Margin
Every international trade involves a number of different parties. There are numerous fees and taxes to take into account when calculating the landed costs of products.
Failing to do so results in a wrong assessment of the profit margin, which translates into less money in your pocket.
5. Not Understanding The Details of the Products
Importers often want to make money by importing and selling products they are not familiar with. This exposes them to the risk of getting poor quality product due to the cheaper price while disregarding manufacturers with offers that seem too expensive.
Before ordering a new batch of products, make sure to get familiar with all the specifics, including dimensions, components, and quality of paint materials.
6. Not Taking Chinese Holidays Into Consideration
There are plenty of holidays in China you should know about before importing goods. Some of these holidays are only a couple of days long and they won’t break your schedule, but there are others that are as long as two weeks.
Before importing goods from China, make sure to check their calendar for the Spring Festival Holiday and National Day Holiday. Both of these are 2 week-long holidays which can potentially cause a shortage in your inventory.
7. Going Full In Without a Backup Supplier Option
If you don’t have time to request a quote from multiple suppliers, you should postpone your order. Going with only one supplier exposes you to multiple risks.
For instance, if you are not satisfied with the supplier, you will be out of the options and forced to continue the cooperation.
8. Poorly Representing Yourself
Chinese suppliers are willing to give good quotations and ensure sustainable delivery dates if they recognize you as a reliable and respectable partner. Before you start importing from China, work on your company portfolio and presentation.
The better the impression you leave, the better the quotes you’ll get.
9. Purely Focusing on What You Want
If you have a clear picture of the product you want, you can easily fall into the “I want exactly this” pitfall. As a result, you might miss experienced suppliers.
Instead, focus on what you need from a product and discuss it with the supplier. You might get some interesting insights from suppliers and get a product with even better specifications and features.
10. Going With the Lowest Offer
Low product prices are very tempting in terms of profit. It is important to do a thorough background check and research before you choose the suppliers. The one that gives you the lowest offer is not automatically the best one for you.
Cheap products are often flawed, come in poor packaging, or come with long delivery times.
11. Not Asking For a Product Sample
If you are importing a bulk order, you don’t want to end up with hundreds or thousands of products that you don’t like and are impossible to sell due to flaws.
Don’t forget to ask for a sample before ordering in bulk. This is the best way to work out possible misunderstandings between you and your supplier.
12. Forgetting to Confirm Packaging Instructions
When importing goods from China, it is very important to clearly communicate packaging instructions to your supplier. If not packaged properly, your goods can get damaged during transport.
The repackaging costs are huge and you really want to avoid this if you want to make importing profitable. This is extremely important if you intend to sell products on Amazon.
13. Forgetting to Ensure Your Shipment
Accidents do happen. It is better to be safe than sorry especially when there is money involved. Don’t leave your investment to chance. There are many insurance options importers can benefit from nowadays.
Cargo Insurance will protect you from various risks including damages caused during shipping or by fire and bad weather.
14. Forgetting to Follow Up Your Orders
There are plenty of things that can go wrong once you make an advance payment to the supplier. The factory might run out of raw materials, experience production difficulties, or something might go wrong with import business transactions.
Make sure to keep close tabs on your supplier to be informed. You want to act accordingly at all times.
15. Trying To Work Around Importing Fees and Taxes
Many importers want to pay less money when getting their goods through customs. The common practices include intentional undervaluing of shipments and miss-declaring the product item as another.
This practice can cost you dearly. You can end up paying fines and penalties, face long processing delays, and get your import abilities revoked permanently.
Now that you are aware of them, avoiding these 15 common pitfalls when importing from China is very easy. It is very important to be aware of all the risks when importing goods from China as it will help you protect your assets and turn your investment into a profitable one.