Avoid 5 common mistake new importers make when importing products from ChinaSheng
Learn the 5 mistakes new importers make when they are importing products from China.
1. Assuming that shipping via sea will be the cheapest option
Many of new importers will think they will save money if they ship via sea rather than air. At first glance it appears to be less expensive as importers usually pay around 60 cents/KG when shipping via sea, compared with the $7/KG when shipping via air courier.
Unfortunately what they don’t understand is that the reason it’s that is because when shipping via sea, you ship via container, and you need to rent the entire container. It’s huge and expect you to deliver hundreds of KGs to make it worth of your time.
In any chance that you are an Amazon private label seller, you are probably not going to have enough stock being delivered to fill a container by no less than 60-70% so it will be less expensive to ship via air.
There are two options when shipping via air, you have:
a) Air freight
b) Air courier
Air courier is when you have your items shipped door-to-door. It is the easiest but the most expensive per KG (although in smaller quantities it is cheaper).
Air freight is when you have your items flown from one airport to the other. You will need to organize other additional services like:
* Having the items delivered to the airport
* A customs broker
* Having the items delivered from the airport to the final location
There are a lot of fixed fees with this which means it becomes cheaper to use air freight with larger quantities. To know which option will be low-cost for you, contact us for free quote!
2. Not using the Metric system
In China, they use the Metric system and not the Imperial system. So make sure to use KGs instead of lbs and CM instead of inches. It’s also important to remember that when working with Chinese suppliers that they expect you to work on their terms and their timeframes.
3. Using Less than Container Load for shipping
When shipping via sea, you have two options:
- a) FCL which stands for Full Container Load
- b) LCL which stands for Less than Container Load
Inexperienced importers fall on this trap of shipping with LCL because they see that the price are extremely cheap. What they don’t realize is that these LCL companies have special deals with the ports to charge you extremely high Destination Service Charges. The LCL companies then make their money in the form of a “rebate” which is essentially commissions/kickbacks.
Destination Service Charges are usually priced per-container and cost between $500-$1000 per container for ports in the USA. But when shipping by LCL you end up paying a high fee per cubic meters. It means that you often end up paying a fee comparable to shipping an entire container.
Don’t fall for this trap: If you can’t break even with FCL, then ship via air.
4. Not calculating the correct duties you that need to pay
When importing products from China, you will need to pay duties at the border. If you don’t calculate the correct rate you can get a shock if it comes back as more than you expected. Duties can be a bit complicated to work out because there are a lot of variables.
For example, if you imported woolen jackets, you need to consider which country the wool came from, as some countries (like Israel) have duty-free agreements over wool, which would reduce the duties you had to pay. On the other hand if synthetic fibres were used instead of pure wool, then your duty rates would be higher since there are higher duties applied to synthetic fibres within the USA.
To figure out what your duty rate is, find out what the HTS (Harmonized Tax System) code is for your item. To find this, ask your Chinese supplier as they will most likely know. You can then go through the HTS manual and find what the duty rate is for the HTS code of your products.
5. Being afraid to make mistakes
Finally, don’t be afraid to make mistakes. Through making mistakes you learn how to overcome them the next time and make even more money. And mistakes are part of entrepreneurship.
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