According to the internet, a great way to become an entrepreneur is to own your own business. There’s plenty of popup ads that I will promise you at least $1,000 per month if you create your own importing company. How hard can that be? All of the hype might sound promising, but be warned, an importing business of any kind comes with its own risks and rewards.

Capitalizing on Chinese Imports

In order to make money with this kind of business you need to be smart from the initial setup. If you choose to import from China, you will need to understand the regulations and how to avoid common pitfalls in order to be successful.

Common Troubles Starting Up

When first starting a business, there are always potential pitfalls. of course, you want to be mindful of these as well as those specific to importing from China.

1. Not Knowing Your Product

When you first decide what you were going to sell, you will look around and try to find the best production quality for the cost. What many people do not understand is that small measurement sizes to make a big difference. Furthermore, they need to understand the actual material and what supplies they are dealing with, depending on what they are selling. You need to be exceedingly familiar with your product from the beginning and have very clear specifications in mind before you were able to get what you ask for from production by the factory.

What you need to know:

• Specific size of your product
• what materials you want your product to be made of
• what kinds of alternative materials can be used and still be deemed acceptable for your product

2. Not Understanding How to Negotiate

Once you understand your product then you are better prepared to negotiate. But, how does one negotiate with a Chinese factory? Understanding that negotiation for America and negotiation in China are different, is absolutely necessary. The last thing that you want to do is sound like an amateur or that you don’t know what you’re talking about. After you have a clear idea of what your product is, then you will want to create a sample letter that will go out to potential factories.

3. Ordering Too Much

It can be easy to feel excited about your new business venture, but the last thing you need is too much of a good thing. Even worse, any amount of a bad thing. To avoid getting an excess of what you don’t want, consider making a small batch order first. If this is acceptable, when received then you can place a production order for a bigger batch. However, always start small and get feedback on your product before going forth.

4. Choosing Heavy Items

When you first look for items to sell through your importing company, try to think small. This is because, especially when first starting up, it is easy to have mistakes be made. They may not even be your fault. Lack of experience, not using an inspector, or not understanding how the entire process works are all reasons that can contribute to supplies or items needing to be returned. Shipping goes by weight and size. If you can find a smaller, lighter and more portable item for your business to sell, then when mistakes are made you will have an easier time. Additionally, lighter items will less for shipping. 

5. Being Pushy

Importing is a fine art that requires finesse. Cultural differences can make a huge difference. You must admit that you were at the mercy of factories in a country far away and you don’t likely have the advantage of being able to personally demand or check on your product. Always be polite, courteous and as descriptive as possible from the beginning as to avoid ruffling feathers.

6. Needing Items NOW

It would be nice if you could demand products right away, but that is not how the importing industry works. You don’t want to rush anything along because that is how mistakes are made. Give ample time for planning and understand that backlogs happen in this industry. if you have decided upon an item to sell that is already a hot ticket item, there’s probably already a business that is selling it. The best way to get quick items is to be clear in your instructions and have innovative designs or something unique. Demanding will not get you anywhere, nor will rushing.

Issues with Transporting and Receiving Shipments

Once you get a good working rapport with a factory in China, it should be relatively easy to get your products. Assuming that you have done your homework and ordered a small lot first to see a sample, things will probably go in your favor. However, it is once the ball gets rolling that some importers run into troubles. This is often because they forget the process or they didn’t do something ahead of time, like acquire licensing or prepare for taxes. 

Take a look at the next few common pitfalls to be sure that your business remains running full speed ahead once you’re off the ground.

7. Not Being Internet Savvy

Plenty of entrepreneurs will use a site such as Alibaba to find factories, but forget to utilize them when it comes time to self. These sites can broaden your horizons and help you make more money, so make sure that you’re including your products on their listings. 

Additional sites that you may want to consider selling your products include:

• eBay
• Etsy
• Facebook Marketplace

8. No Inspection

Always be sure to have your products inspected. It is smart to do it yourself, but not always possible. if you are unable to do your own inspections, consider hiring a company. For only a few hundred dollars you can save a lot of money by ensuring that your product is correct in Port before it is shipped across the country.

9. Lacking License

Not all industries require a license, does yours? Be sure to contact your local commerce board and understand the regulations for your industry very clearly. Ignorance of the law is not a reason to not follow the law.

10. Not Comparing Close Enough

Your comparisons when shopping around poor production should always be like for like. Much like in the beginning when you needed to know your product well, understanding the subtle differences when you try to save money later down the line is still required. Do not compare your product to another that is similar, instead be sure that the measurements are the same and the materials are the same. You may end up finding a cheaper company to produce your product, but the small and seemingly insignificant differences can create huge headache because they lend towards quality control issues later down the line.

11. Not Understanding Profit Potential

Often, people will think that they are going to make a certain amount of money because they plan for a production cost and shipping, but they don’t look at the whole picture for the rest of their spending. Online service fees for Amazon or ebay can add up, as can taxes, inspection or simply just standard business costs. 

• Consider all fees included career and inspection costs, and try to get yourself sample room in your profit margin.

• After your first sale batch, compare your profits to what you expected. If they are not matching up, consider where you can reasonably save money on costs or if there’s a better product that you might want to be selling instead. 

• Sometimes starting back off from square one is more cost-effective.

12. Expecting Perfection

No order is going to be a hundred percent perfect and when you were dealing with any economies of scale, the chances increase for small mistakes. Be prepared for mistakes and don’t lose your cool over perceived imperfections. It cannot be stressed enough that how you react for often influence future dealings with a specific factory or contact person for set factory. Keep your cool and always be professional by understanding what is inevitable on the horizon.

13. Managing Logistics Solo

Logistics of importing can be a messy business and the easiest way to simplify one of the most important areas of any importing business is to hire a logistics coordinator. Understand is that it is almost impossible to handle the logistics alone because of the complexities.  Additionally, working with a logistics company will generally get you lower shipping rates because they have their own bulk rates.

Pitfalls Post Success

You may think that when you make your first goal point, whether it is a few thousand dollars or a half a million dollars, that you are well on your way with a fan favorite product. Never forget the nature of business.  It requires more than one success in order to thrive in an international endeavor of any kind.

14. Not Developing Product

Once you have a hit product on your hands it may be easy to let things go on autopilot. The lack of development can mean death for many products because somebody will come along and adapt a good product for better use. Always be mindful of potential tweaks that can be made and encouraged feedback from your buyers. use their feedback to make a better product and keep your business moving forward.

15. Not Paying Taxes

Yes, when you are importing from China and selling a product you still have to pay taxes. For some reason, a number of entrepreneurs have thought that since their product comes from China they don’t have to pay taxes and have been sorely disappointed. If your business is doing well, spend the extra and get an account and make sure your taxes are done right so the government doesn’t come and overshadow your success.

The Best Success is a Good Offense

Ultimately, no matter what business you go into you will want to be prepared. Be sure to be reasonable and all of your estimations and compare and then compare again before making a decision. Lastly, when in doubt ask for help. This industry can be tricky to get a handle on but once you do it can also be very lucrative