Guide for Business Start-ups to Import from China to Europe

2022-11-08

SeekPng.com_slither-io-png_9523820 copy.pngFor the last few years, China has acquired the position of “Factory of the World” and has turned into a fantastic product source for international sellers.

The statistics say that total export of China was 3.2 trillion USD last year throughout the world and out of that 485 billion was exported only to Europe.

Because of the rapid growth of export capabilities of China, many companies have started developing their supply chain. However, you have to understand that to import goods from China, you have to follow a certain strict process because of various regulations in place by China as well as Europe.

There are many European businesses that are very keen to import from China to Europe. For quite a few, this may seem to be a difficult task. However, if you get a proper understanding of the product sourcing strategy, you can do it easily.

You will come across several businesses that are importing from China and making a huge profit which is sustainable too.

Theoretically, it may be easier said than done, all that you have to do is select any product and then buy it at a cheaper rate from any of the Chinese factories and using your own branding just sell in your country with a certain markup.

However, those who have already attempted to source from China for Europe can realize that it may not be as easy as it appears to be.

Leave aside all those challenges to nail your marketing and branding, as you know it is not an easy task, and in addition to that, you may face plenty of other challenges as an importer that you have to overcome.

Here, in this short guide, we will try to walk you through various steps to import from China to Europe so that you can come out with a certain business model of how to buy from China and understand all about taxes and duties that you will have to pay.

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Why does importing from China make good sense?

The following are a few good reasons why it makes perfect economic sense to import from China and then resell them.

A wide range of products is available in China. You can always choose what kind of items to import in this condition. Additionally, this can help in your business diversification.

You improve your prospects of your company’s expansion by doing this. Moreover, diversifying will help you surge your market share.

  • Products from China are usually inexpensive. This is really great since it helps you to resell them at a competitive, offering you an upper hand over your competitors.

  • These days, many latest trends are coming out regularly in the Chinese market. This suggests that there will be continuous supply of fresh goods. This will make it simple for you to sell various products to your customers.

  • China is now a trading and manufacturing powerhouse, the second-largest exporter in the world. As a result, importing from China gives you access to a wide range of markets. In general, the nation offers both enterprises and individuals a wide range of options.

  • The Chinese manufacturer is characterised by lower wages, readily available resources, and skilled designers. These three factors make it possible to produce goods more quickly, inexpensively, and in big quantities. Therefore, it is difficult to deny that China is the ideal location for your items' manufacturing or even assembly.

  • Another factor is the international increase in demand for Chinese products. This is primarily because they are inexpensive. It follows that there will always be a market for the products that you will be importing from China to Europe.

The following are the main steps that you need to follow while importing goods from China. 

1. Find the ideal supplier

Finding a source who can meet your company's needs is essential when looking for items to import from China.

Many vendors and platforms in China make it possible to find suppliers quickly.

These may consist of:

a. Alibaba

Alibaba is a B2B marketplace where vendors may sell goods internationally. This site will offer you a wide range of goods. It establishes a minimum buying threshold. Therefore, buying in bulk is necessary.

b. Trade shows

Trade exhibitions are a great place to see products and interact with suppliers.

However, to get there will need to go to China.

You can attend:

  • Canton Fair in Guangzhou

  • Shanghai Import and Export Fair

  • Yiwu Commodities Fair in Zhejiang.

c. European trade shows

Besides Chinese trade shows, there are many suppliers who may also participate in different fairs within Europe.

d. Third-party sourcing organizations

There are businesses in China that specialise in helping sellers identify suppliers that perfectly suit their requirements.

These businesses establish close ties with numerous manufacturers in order to create a network that offers sellers high-quality options without the hassle of meeting new people, making trips to China, or negotiating with potential subpar suppliers.

2. Make sure you can export your product to Europe

Finding a source that can legitimately export items from China to Europe is the first important consideration when dealing with products made in China

For products to comply with rules, businesses in China must have the appropriate certifications and licences in place. They also need to make a declaration that they can export legally (a type of form necessary to submit at the port, where all details about the items that are being exported must be mentioned.)

3. Check the commodity code

When bringing goods into Europe for commercial purposes, certain taxes must be paid. Depending on the item in question, this sum will vary. To do this, the government has created a list that links a code to a product tax and requires that this information be included in the import documentation.

The trade tariff tool is the name of this manual. Additionally, it will provide advice regarding whether you require additional permits for commodities like chemicals.

VAT and import duty

You must pay the VAT along with the amount of the import charge and customs value when you import from China to Europe. The cost of items that have been shipped from outside the EU and have a value greater than £135 is referred to as customs duty.

You can determine the import tariffs you must pay once the commodity code for the items you are importing is identified.

Calculating your entire product value and adding any freight, insurance, import duty, and other fees will help you determine how much VAT to pay. Afterward, multiply it by 20% (the VAT rate in Europe).

What is the VAT needed for importing from China to Europe?

Quotes for shipping frequently include the words "plus Europe duty & VAT." Do not make the error of supposing that the VAT is determined by the cost of transportation; rather, the VAT is determined by the cost of the taxable import.

In reality, you are paying VAT on every expense associated with purchasing products and distributing them within Europe.

The amount you pay for your purchases plus the cost of transportation plus Europe duty constitutes the taxable import for which VAT is due.

Although you won't have to pay VAT if you order products from China, it doesn't imply you are not required to pay it at all.

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4. Ensure necessary compliance with Europe regulations

All products coming into Europe must be secure for customers. Regulations have been put in place as a result.

This guarantees compliance with Europe laws governing safety and quality. Other goods will follow different regulations.

Due to its complexity and requirement for extensive laboratory testing to ensure that the goods conform, this can be quite challenging for organisations to organise autonomously.

Due to this, a wide range of demand, including sample testing, product quality inspection, and labelling, are covered by third-party quality assurance organisations (like HQTS).

A third-party organisation enables a streamlined supply chain strategy, removing the possibility that goods would fail inspections or violate the aforementioned standards.

5. Ensure the quality of the products

The basic consideration while importing any items into Europe should be their superior quality. This guarantees fewer significant problems with abiding by legal requirements and preserving your company's reputation with customers.

Let us suppose that your imported items are of inferior quality, or possibly harmful too. If so, this might hurt how people perceive your brand, impede the supply chain, and result in items being held at customs or also sent back, which would result in financial problems.

Consider hiring a Chinese sourcing company

In a country like China, you can be highly benefitted by hiring a sourcing company who will be in China, when you are thinking to import from China to Europe. The following are a few good reasons why such an agent can be useful to you:

  • These agents are well aware of all Chinese sources

  • They can offer a very useful help during the price negotiation

  • They can ensure the quality of the product in the factory in China

  • The communication gap is one of the biggest issues that people from Europe may face. As only a few people in China understand proper English. These agents can bridge this gap.

However, to be successful in this venture, you must try to find a trustworthy Chinese sourcing company first so that your process of importing from China can be a breeze.

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