Managing Risks on Importing Goods from China
As China becomes more and more as “manufacturing hub of the world”, its manufacturing costs are low in comparison to other places in the world. This has attracted a large number of business people get into the Chinese markets as they opt to import goods and reduce their productions costs, hence gain a competitive advantage over other businesses.
Another advantage has been obtaining high quality products especially for businesses dealing with suppliers who are keen on quality control. While this can be a highly profitable, it may not always be rosy as your business may face a number of challenges and risks that may inversely affect your Return on Investment.
As a business owner while importing goods from China, you may run into a risk of receiving poor quality goods with limited options of sending them back to the seller or improving them locally. This results in financial losses due to costs associated with shipping them back. Sending them back also becomes complicated since you have to make payments before the goods are shipped out. Just like any other shipping business, your products could get damaged or lost while in transit. This results in losses and inconveniences as you place new orders and get your insurance to deal with the associated costs.
In addition, it could also lead to credibility issues with your buyer’s due to promises made on availability of these products based on your shipping schedule. You also run the risk of dealing with spam sellers who are only interested in receiving your money and not shipping your merchandise. Other than these risks there are also other issues that one needs to be aware of such as litigation issues and choosing the right suppliers.
While these risks and issues are real and could appear complicated, there are many success stories on importing goods from China. Yours can become one too if you understand a number of things that can help you to avoid falling into pitfalls associated with all the horror stories you may have heard.
Here are 8 tips on importing goods, that can save your business time and money.
1. Plan your import objectives
2. Familiarize with all rules and regulations
3. Choose reputable Chinese suppliers
4. Negotiate the right deal
5. Have a clear contract in place
6. Understand all commodity codes
7. Acquire an import license
8. Be conversant with taxes and duties on imports.