Mistakes that you should avoid when importing from China

Ask anyone and they will let you know that the process of importing from China can get extremely complicated. In Sidoman’s capacity as the leading freight forwarding company in Kenya, we regularly work with a lot of new importers especially those looking to start businesses such as selling cars or heavy machinery. A large number of importers when first starting out are usually excited and charged up about the prospect of starting a new and potentially successful venture. Because of this, most entrepreneurs try and rush in a bid to get the ball rolling as quickly as possible.

What most individuals and businesses do not understand is that when first importing from China or any other country for that matter, there is a lot that one has to learn and understand. The steep learning curve is tedious and often complicated but with experience, you can start to gain a proper understanding of all the processes that are required to import from China or any other country for that matter.

It typically takes about two to four shipments for a new importer to fully understand the process flow, as well as all the necessary acronyms, industry titles, documentation, and terminologies used in international trade.

Why should you consider importing from China?

Importing and exporting from China and other Far East countries has become progressively more common, which is where a reliable partner such as Sidoman can help. As the largest exporter in the world, it comes as no surprise that the world’s busiest container ports are based in China or some region in the Far East. Shanghai is by far one of the busiest container ports in the whole world and the estimated speed of growth is not projected to slow down anytime soon.

Thanks to customer valued websites such as Goodada and Alibaba, it is a lot easier nowadays to ship anything that you need from China. Of course, there are obvious fears regarding the quality of the items you might get or apprehension that your commodities will not arrive on time. After all, when dealing with a supplier that is a thousand miles away, miscommunication can often be amplified when there are language and cultural barriers also involved.

Because of this, it can be intimidating trying to import anything from China but the process should be straightforward particularly if you have a dependable freight forwarding partner to help you through the ups and downs.

Common mistakes to avoid when importing from China

Not comparing one supplier with another

Most new importers looking to import from China usually start their research on B2B sites such as Alibaba. However, although such sites can be helpful, you should never just pick the first one that you are recommended to or come across. Instead, you should spend time researching and understanding the specifics and the finer details of the products that you want to buy so that you do not end up with commodities of a lesser quality.

You should then compare different websites and suppliers to make sure that you are getting what you pay for. In many instances, particularly when individuals are sourcing for new products that they have not worked with before, small and obvious differences can be missed. It is therefore important to compare a broad range of suppliers to avoid being duped.

The urgent- order disorder

The urgent order syndrome has to be one of the biggest mistakes that people make when importing from China. While it is completely understandable to show some exuberance, the need to have your orders delivered urgently can be a recipe for disaster. Rushed orders often result in poor quality control procedures and cutting down production time so that your order can get to you quickly. Additionally, because of rushed orders, a business may lose out on a good supplier who actually offers quality products just because another poor supplier promises to keep up with the delivery times.

Another common mistake that people make when importing from China is selecting a supplier just because they promise slightly shorter delivery times comparative to the industry standard. It is important to understand that suppliers sometimes quote shorter delivery deadlines simply so that they can close a sale.  To make sure that everything gets to you in time, they may skip the necessary quality control checks to speed up production, which will consequently pose problems for you.

Not clarifying your product specifications

When importing anything from China, it is essential that you explain the exact specs of your product in writing so that your supplier can create and meet your expectations. If you do not make your specifications as apparent as possible, then there is a very high likelihood that you will not receive what you pay for.

Overestimating the profit margin on a commodity

This is an increasingly common problem when importing things from China. Even the simplest transaction can involve several parties which can make it difficult to calculate the estimated profit margin on whatever you plan to import.  When you factor in other costs such as seller fees, courier costs, marketing costs and such, the profit margins do not always look as viable in the end. Rather than just basing your profit margin on the obvious elements such as logistics and product costs, you need to factor in other costs that might affect your margin in the long run.

Ordering based on price alone

If you try to order based on price alone, you must accept the risk of buying an inexpensive but inferior product. Unless you are planning on ordering large volumes, the supplier that you pick is not going to give you a lower price as they probably do for bigger brands.  Instead of relying on price alone to pick your commodities, you should concentrate on buying superior products so that you can build your brand and customer base.

This will help to set you apart from others that have been in your selected industry longer. Normally it takes a few shipments with a given Chinese supplier for them to fully understand your needs in-depth and so that the supplier can perfect and customize your needs.

Ordering quantities that are too small

When importing anything, it is recommended that you try and gain an understanding of how economies of scale operate. The general rule of thumb is that the bigger the order, the more affordable it will most likely be. The volume of goods that you order from China will ultimately affect the quote as well as the level of service that is awarded to you by the supplier. Obviously, ordering more than you can sell is a complete waste of money and time so should try and balance your orders to reap the best deals and benefits.

 

As an importer, have you had any previous experiences importing from China where you felt that you could have done things differently? If so, please share your comments below or contact us for help on a better way forward.

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Thursday 09th Nov 2017

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