Important Things to Know When Importing from China

If you import products from China there are many benefits. Faster production leads to easier scalability, smaller companies receive the kind of quality service that only larger companies receive domestically, the costs are much lower (production, assembly, labor), customization options are cheaper and abundant, and if you frequently buy direct from China, suppliers can sometimes off free inventory storage solutions for your business.

Your most common costs will be the manufacturing costs, local shipping costs from factory to the port, ocean freight, duties and taxes, customs filing and clearance fees and local delivery.

Scams and fraud are very uncommon when working with chinese manufacturers. In fact, you may never come across outright fraud when searching for a supplier. It is still possible, so it's best to be aware of the red flags, the most common of which is unusual payment methods.

For example, being asked to send a PayPal payment categorized as "Friends and Family" instead of a business transaction, a cashier's check, or cash advance. If a price seems too good to be true, and then you're asked to pay in a way that makes you feel uncomfortable, that should raise red flags.

Kanary is able to avoid this problem entirely. We use trusted manufacturers with whom we have long professional relationships to ensure that you are working with high-quality, genuine factories.

The best way to find suppliers is to use a sourcing agent like Kanary, but if you are using an online platform to find suppliers the most reputable is Alibaba.com. Other websites include DH-Gate.com and Made-In-China.com.

In a nutshell, yes, you can use Alibaba to import products from China. Alibaba.com is sometimes useful to find a supplier and order products from them. If the volume is small enough or the shipment is very lightweight, then you can import the order yourself by air or the supplier should be able to do this for you.

On the other hand, if the quantity you are importing is high volume, very heavy, or if you are importing a variety of products from different suppliers, then it would not make sense to use Alibaba. Instead, you will want to find a company like Kanary or a freight forwarding company to help you.

Businesses should always exercise caution when sending international payments to manufacturers. While this isn't an all-inclusive list, here are some common, reliable payment methods businesses use to pay manufacturers:

• Credit card
• Paypal (or another online payment system)
• Escrow Service
• Open account (the importer pays only after receiving the products)
• International wire transfer (this should be used with caution)

Trustworthy, reliable manufacturers will accept common payment methods. Sourcing agents, like Kanary, will make sure that your payment is secure and that you are working with a trustworthy, reliable manufacturer.

An online escrow service is an intermediary between your business and a manufacturer. Your business pays the agreed amount for products, and the online escrow service holds the funds until your products are delivered. Then, payment is released only after both parties agree for the payments to be released.

An online escrow service helps to build trust between a business working with a manufacturer for the first time. The downside to using an online escrow service is that their transaction fees are substantial and are higher than online payment systems like PayPal.

Kanary does not use online escrow services. Since we only work with manufacturers we trust, we don't need the added security that online escrow provides. This helps to keep your costs down and to give you the best savings possible.

Yes, one of the most common places to sell imported Chinese products online is Amazon.com. When you are looking for products to buy and sell on Amazon, you want them to have a high profit margin, be lightweight so they are easy to ship, and be easily improvable so they are not identical to items already being sold.

Usually, you will ship these types of products from China to the US by Air Freight or Air express.

The coronavirus pandemic has not only impacted importing products from China, but the entire global trade market. Unprecedented shipping delays have caused backlogs of vessels and congestion at the ports, vessels are canceling and overcharging for shipments, and limited workers are available at ports to load and unload vessels due to covid outbreaks.

Overall shipping prices just significantly increased due to the lack of availability of containers. The global shipping market will never be the same.

The language barrier is less of a problem than it was years ago due to communication platforms like WeChat with built in translation. Having said that, it can still be a big problem when it comes to fixing quality issues with manufacturing or negotiating price and/or terms.

Kanary can help with these scenarios as they almost always require a complete fluency in the language and understanding of the culture to resolve issues and move forward in a timely fashion.

There are several ways to go about researching what to import from China. It mainly depends on your reason for importing the products and how often you will want to import. If you are interested in buying products in bulk for your business one or two times a year, you can use Alibaba.com. Alibaba has trade companies and manufacturers that can help you with your purchase, as well as secure payment methods like Paypal and Trade Assurance.

If you are a consumer looking for individual consumer products, you can use AliExpress.com. AliExpress has individual consumer products for purchase that can be shipped directly to your home.

Finally, if you plan on importing multiple times a year, growing and scaling your business, then it is best to use an outsourced supply manager like Kanary whose experience and supplier relationships will provide you with the best service possible.

You will need to research various suppliers so that you can eliminate the ineffective ones and choose the best one for you. You will need to research and understand your product completely so that you can explain to your supplier the most efficient way to manufacture your product and eliminate the flaws, if any.

Researching your product and understanding the manufacturing process will also help you determine realistic lead times for arrival of your product. You will also need to research all the calculations that go into your landed cost.

For example, manufacturing costs, local shipping costs from factory to port, shipping costs, duty/tax costs, custom’s clearance costs, and final delivery costs will give you your total landed cost.

You will need to research various suppliers so that you can eliminate the ineffective ones and choose the best one for you. You will need to research and understand your product completely so that you can explain to your supplier the most efficient way to manufacture your product and eliminate the flaws, if any.

Researching your product and understanding the manufacturing process will also help you determine realistic lead times for arrival of your product. You will also need to research all the calculations that go into your landed cost.

For example, manufacturing costs, local shipping costs from factory to port, shipping costs, duty/tax costs, custom’s clearance costs, and final delivery costs will give you your total landed cost.

The best way to avoid contractual issues when importing from China is to use a company like Kanary to handle the process. If you use a US based sourcing company then you will have legal recourse if something goes wrong.

If you work directly with suppliers in China, it is near impossible to handle contractual disputes because you will have to settle it within China’s legal system in most cases.

Negotiating with factories will be one of the more challenging steps a business will take when importing products from China. You need to have a firm grasp of what your priorities are, and you need to be very familiar with the specific factories with whom you are negotiating.

The Kanary Team is full of veterans with negotiating with manufacturers. We leverage our existing relationships with high-quality suppliers to give you the best price for the products you need. In our experience, we have found the following advice is key to negotiating the most favorable terms:

Narrow Down Your Supplier List Before Negotiating
Negotiating can take time, and it's likely you will spend time negotiating and decide to part ways with a supplier. Don't spend time trying to negotiate with every single option.

Research Your Product and Match with Suppliers
You need to know your product inside and out, which means you need to have product specifications on-hand as well as a clear understanding of the materials used in your product.

From there, you'll research available factories in China, looking for those that specialize in your product type. Then, after you have formed a shortlist of viable candidates, you will reach out and begin negotiating.

Determine Manufacturing Priorities
Is your number one concern to get the best possible price for your products? Would you rather pay a premium to get a factory that you know will use the raw materials you want to guarantee the exact product you want? Do you have a flexible deadline, or do you need the products as soon as possible, regardless of extra cost?

You need to have answers to these and similar questions. It will help focus your negotiations and will increase the chances that your manufacturing priorities get favorable terms.

Consider Lead Time and MOQs
You may have found an ideal factory, but they may have a lead time that is too long for your business needs. Likewise, you may have found a factory that specializes in your product type, but the MOQ (minimum order quantity) may be too high for your business. Be sure to keep these factors in mind when negotiating and choosing a manufacturer.

Negotiate With the Right People and Have a Business Plan Ready
You need to make sure that the person you're negotiating with at the factory is a decision-maker. Once you're sure, you need to present a business plan to convince the manufacturer that you'll be a profitable customer for them. China manufacturing is in high demand, and most factories will pick and choose the most attractive clients.

Kanary has successfully imported all kinds of products from China. The following is a short list to detail the variety of products we have previously sourced:

• Packaging materials such as glass, tin and plastic containers, cardboard boxes, etc.
• Machinery for the food and cannabis industries.
• Construction materials such as LVT flooring, artificial turf and countertops.
• Consumer electronics such as phones, batteries, game devices, etc.
• Agricultural equipment.
• Pet products and many more!

Sourcing companies, not all but most, are essentially experts when it comes to importing goods from China. Kanary has been collectively doing business in China and importing to the US for 40+ years, which is invaluable.

Sourcing companies know how to perform due diligence on suppliers, they understand the entire sourcing and shipping processes, and it is easy for them to source a variety of products because of their many supplier relationships.

Kanary also entirely understands the rules and regulations of importing into the US. These are just some of the advantages of using a sourcing company to import rather than an online platform like Alibaba.com.

Kanary can handle your entire sourcing process. Some areas we specialize in due diligence on suppliers, overseeing the manufacturing process, quality control, negotiating favorable terms and pricing, consolidating shipments within China, scheduling air freight or sea freight, importing and customs clearance, and local delivery to your final destination.

If there is something that you need done in China that we didn’t name, all you have to do is reach out and ask. We are confident in our ability to handle any of your needs in China!

Most likely, your supplier is not familiar with the importing process, so they will be hiring a Chinese freight forwarding company to handle the shipping. Most Chinese freight forwarders are not familiar with the rules and processes in the US for importing. As a consequence, there is a good chance your shipment will face delays.

They may even be fined for importing your shipment incorrectly and will pass the unnecessary fines unto you. They could use the wrong HTS codes translating into higher import taxes, submit paperwork late which could mean daily fines until they figure it out, and overpay for local trucking companies to deliver the goods because they are not familiar with the local rates.

You should always work with a company like Kanary or customs broker who is familiar with the rules and processes of the arrival destination.

While Kanary is based in the U.S., our experienced team can help businesses in a variety of different countries.

It is specific to each situation and depends on why you need to import products from China. There are some general scenarios where it makes sense to look and import products from China.

For example, products you need to order in large quantities, customizable products that are very expensive to customize in the US, products that are lightweight and small since shipping will be quick and cheap, and products that are made of raw materials which are scarce in the US.

Yes, ordering samples is a very important step in the sourcing process. Once you receive a sample, you have a manufacturable product that you are able to approve and feel comfortable about mass producing. A physical sample allows you to observe and if necessary, fix certain details you would not otherwise be able to notice through video or pictures.

For some things, like heavy machinery, you will not be able to receive samples and will need videos and pictures of the machine operating to confirm that the machine is up to your manufacturing standards. Companies like Kanary are very useful in situations like these because they can oversee the entire manufacturing process being on the ground and consistently check up on the supplier through onsite inspections.

If possible, you should always order a sample before importing products from China.

There are many types of quality control that can be done. For example, requesting samples, having a company on the ground to repeatedly check up on the supplier and oversee manufacturing, onsite factory audits, and final inspection upon completion of manufacturing before the order is shipped out.

Yes. Kanary regularly connects China-based manufacturers experienced in developing prototypes with businesses looking to create, manufacture, and sell a novel product. If you're interested in developing a prototype, we can help guide you through this unique process. There are extra steps in developing a prototype, like:

• How to prepare CAD files for the manufacturer
• How to evaluate a 3D printed sample of your prototype
• What to expect in mold costs

Yes. Kanary partners with manufacturers that are accustomed to customizing existing products to fit the niche needs of varying businesses. For example, luxury vinyl tiles are a popular product we source for businesses, and the layers of these tiles can be altered to fit a number of unique specifications required by your company.

Customizing existing products requires clear communication between your business and your chosen manufacturer. If your business isn't accustomed to communicating and negotiating with manufacturers to develop a custom product, we encourage you to reach out to the sourcing experts here at Kanary.

Incoterms were published by the International Chamber of Commerce to facilitate commerce around the world. They are essentially international commercial terms. There are some common Incoterms you should know that apply to any mode of transport, such as:

EXW (Ex Works), FCA (Free Carrier), CPT (Carriage Paid To), CIP (Carriage and Insurance Paid To), DAT (Delivered at Terminal), DAP (Delivered at Place), and DDP (Delivery Paid Duty).

Other common Incoterms you should know apply specifically to sea transport, such as FAS (Free Alongside Ship), FOB (Free on Board), CFR (Cost and Freight), and CIF (Cost, Insurance and Freight).

This depends on the type of goods you want to import and the method needed for shipping. If you are using a company like Kanary then the whole process will be explained to you in detail and seem simple, but importing goods yourself can be difficult.

You can import using Air Express, Air Freight, or Sea Freight and knowing which method to choose is important because it will affect your total cost. Once you decide on which shipping method is the most cost effective, you will need to figure out import taxes and duties and the customs clearance process.

Finally, you will need your goods delivered from the destination port to the final destination.

Air Freight is one method of shipping used to import goods from China. Typically, you import goods by Air Freight if the quantity is limited and they are lightweight. Large quantities and heavy items are reserved for Sea Freight.

Sea Freight is just one of the costs associated with importing goods from China to the US by Sea. You can ship goods by FCL (full container load) or LCL (less than container load). FCL costs are per container, whereas LCL costs are calculated based on the cbm (cubic meter) of your shipment that is in a container with other shipments.

Other costs involved with sea shipping include customs filing fees, tariffs and duties, local delivery costs in China from the factory to the port, and final delivery costs from the destination port to the final destination. You can also have surprise costs. For example, sometimes the container is randomly X-rayed by customs and the cost for doing so is paid for by you.

There is nor requirement, but it is smart to always purchase cargo insurance when you are importing from China. Marine cargo insurance is the most common method and is used to protect the value of your goods from physical damage, theft, or general average.

If your products are damaged in transit then you can file a claim with your insurance provider. Without cargo insurance, there is no recourse.

The type of goods and quantity you are importing will determine the size of the container you need. There are standard 20’ and 40’ dry freight containers which are suitable for every normal cargo. There are 40’ and 45’ high cube containers which are usually for light, high volume cargoes and cargoes that are excessively tall.

Less common containers include open top containers and flats. Open top containers are for cargoes that are excessively high and need to be loaded from above or from the door which has a removable door header. They come in 20’ and 40’ sizes. Flats are for cargoes that are heavy to lift and overwidth.

Cargo that cannot fit in one container can be fit into several flats positioned side by side. They come in 20’ and 40’ flat racks and also 40’ collapsible flat racks. You also have refrigerated containers for perishables like food and tank containers which are used for liquids.

Yes, you can put however many products you want in one container as long as they fit. Kanary helps many companies save money this way by consolidating all of their products into one container and shipping FCL, instead of various LCL shipments.

Kanary will manage lead times and make sure the multiple suppliers complete manufacturing around the same time. Then Kanary will move all of the products from various suppliers into one location to load onto one container. Money is saved by having one big shipment instead of multiple smaller shipments.

FCL means "full container load" and LCL means "less-than-container load." An FCL shipment means your shipping container is full of only your ordered products. An LCL shipment can contain other orders besides your own or simply have unused open space. For large volume orders, FCL shipment is the most cost-effective method to use.

Consolidated shipping is a freighting practice where orders that contain several different products (or orders that contain large volumes of a single product), are consolidated into as few shipping containers as possible.

This is a common practice for companies that plan on a long-term, high-volume manufacturing campaign, or for businesses ordering several kinds of products being manufactured in several different factories. The goal of consolidated shipping is to save on freight costs by having as many FCL shipments as possible, and as few LCL shipments as possible.

Kanary specializes in consolidated shipping logistics, and we have successfully executed several different consolidated shipping strategies for numerous clients.

FCL shipment can be a logistical challenge to successfully execute, but it offers numerous benefits. The most obvious is that if you fill an entire container, you can ship more of your products at the same shipping rate, which saves on freight costs.

Another benefit of FCL shipment is that it can make passing customs much easier. If your LCL shipment has other than your own, and those products have issues at customs, it will delay the entire container. You could face a shipping delay with problems that have nothing to do with your order.

FCL shipments are unloaded in a separate area than LCL shipments, which will help expedite docking, passing customs, and loading products with your domestic shipping partners.

Your business has several reputable options when using air freight. The shipping partners Kanary uses most include:

• DHL
• UPS
• FedEx

Depending on your specific product or need, a third-party airline may be an option for air freight. If you need your products as fast as possible, you may need to consider air freight. Kanary can help to determine if air freight is a viable option for your products, and if so, can help organize the shipping logistics.

The majority of businesses taking advantage of China manufacturing willuse sea freight. This is because the cost of sea freight is based on the amount of space your products take on the container ship, as opposed to their weight.

For most businesses, this means that sea freight is very cost-effective, but only if your planning considers all the important factors, like:

When to Book a Container
This is some text inside of‍Is your number one concern to get the best possible price for your products? Would you rather pay a premium to get a factory that you know will use the raw materials you want to guarantee the exact product you want? Do you have a flexible deadline, or do you need the products as soon as possible, regardless of extra cost?

You need to have answers to these and similar questions. It will help focus your negotiations and will increase the chances that your manufacturing priorities get favorable terms.

How Large of a Container to Book
Not all containers are the same size. If you want the most cost-effective shipping, you need to know the smallest dimensions that can comfortably fit your product volume.

Booking a container that is too large will incur needless cost, or it may be considered an LCL load, which means unrelated orders and products may share your container space. If you order a container too small, you’ll face shipping delays, may need to pay for storage while until a new container is available.

You’ll also have to pay for a new container, which will be an enormous increase to your shipping costs.

You may need to use temporary storage, especially if your business is utilizing a consolidated shipping strategy. It’s important to know how long you need temporary storage and how much space you need to use.

Kanary regularly plans consolidated shipping strategies for clients. We also offer free temporary storage for our clients, since most consolidated shipping strategies will require some kind of temporary storage until all products are ready for shipment.

In order to figure out the tariffs on the goods you are importing from China, you will need to figure out the HS code, or the number used by customs to classify your product.

Once you have the HS code, it allows you to figure out the HTS code, or the code specifically needed to classify and define your product for importation into the US.

Each product will have a different HTS code and if you are not familiar with importing your product under the correct code, then you should let Kanary help. Having the wrong code could lead to paying higher taxes or even a fine.

Your landed cost is the total amount of money it will cost you to manufacture your product, ship it, and finally receive it. These costs will include not only raw materials and shipping, but also import duties and tariffs, as well as insurance if you need it on your shipment.

It is important to know your landed cost for the following reasons:

• It is possible that even though your manufacturing cost is cheaper than a domestic supplier, your landed cost may not be
• If you plan on reselling the product you are ordering you should know your all-in landed cost so you can figure out how to earn a reasonable profit
• Initially going over the landed cost with your supplier and freight forwarder will help to avoid any unnecessary surprises later on in the sourcing process.

The coronavirus has also made shipping prices extremely volatile, so knowing your current landed cost and what your landed cost will be when you are ready to actually ship your product is crucial.

You do not need a license to import products from China. However, depending on the product you are trying to source, you may need some form of certification or license to import the product to your final destination.

For example, many food and health products will require FDA registration to import them from China to the US. If you are the importer of record, or the person in the destination country responsible for ensuring compliance requirements are met, you will also need a customs bond to import your goods.

It is recommended to use a company like Kanary as your importer of record to take compliance responsibility and help with this process.

If your company is based in the U.S., there's not a specific permit you need to get to start the process of importing products from China. However, you do need to make sure that the products you import meet the standards set by any overseeing federal agency.

Depending on the specific product you want to import, you may need a special permit from a federal agency to do so. If you're unsure about which federal agencies you may need to communicate with, here's a list of agencies that supervise commonly imported goods:

• United States Department of Agriculture (USDA): Importation of any plant products, plants in general, wood, or even animals may require a special permit from the USDA.
• Environmental Protection Agency (EPA): The EPA sets standards for many imported products, especially those that have potentially dangerous chemicals, like batteries.
• Food and Drug Administration (FDA): Any imported food or cosmetic product is regulated by the FDA. You must give the FDA notice if you plan on importing any kind of food product.
• Consumer Product Safety Commission (CPSC): The CPSC will regulate any toys geared towards children you plan on importing.
• Department of Transportation (DOT): If you plan on importing cars, trucks, or other vehicles, the DOT will regulate the import.
• Out of all the federal agencies, the FTC is the most likely to be involved with your imports.

Knowing which federal agency to connect with is challenging, and properly interacting with one is even harder. If you miss a step that is required by a regulatory agency, you could face product delays, fines, and more.

Kanary has deep experience with working with federal agencies to make sure regulatory headaches are avoided. It's one of the many benefits you'll receive when you partner with Kanary as your sourcing specialist.

Some common documents necessary for importing are the Bill of lading (B/L), commercial invoice, and packing list. You may need other documents depending on the products you are importing. For example, certificates of origin, fumigation certificates, or FDA registrations.

Yes, you will need to have a customs bond when importing from China if you are the importer of record. The importer of record is the business or person in the destination country that is responsible for taxes and duties and ensuring compliance requirements are met.

If you are importing more than 4-5 times per year it is best to have a continuous bond, which renews automatically until it is canceled, to save money.

A customs broker can take care of the entire import process. This includes having all the import documentation, like the Arrival Notice, in order for when the vessel arrives at the destination port, paying duties and taxes to the CBP (US Customs and Border Protection), clearing customs, and scheduling delivery for your goods to their final destination.

Custom brokers can help you avoid making costly mistakes because they are experts in the import process. They understand things you may not, such as the correct HTS codes to file for each product and the quickest/cheapest routes to get your goods from China to the US.

A wholesaler or trade company is not the factory. Therefore, prices may be higher because they have to make their margin, problems take longer to resolve because communication takes longer since you are not speaking directly to the factory, and importing the products could be problematic since they are not the factory.

A wholesaler may not be completely familiar with correct HS codes and import processes, which can result in extra fees and fines.