Importing Goods From China - Points To Consider For Would-Be Import Export Entrepreneurs
Perhaps you've wandered into a luggage outlet in a local shopping mall and thought about where these people get their stuff. And perhaps, you search on-line for a portable air conditioner and see countless sites with impressive product lines, and you think "how do they acquire these items, and how much money are these people making?" Chances are good that the sellers got their products from China at an extremely cheap cost and are getting a decent profit on each unit sold. If you know how to import goods from China, you are one step beyond your competitors.
Certain imported items like cell phone batteries can be sold in the U.S. for roughly five times the cost, whereas more expensive items like plasma TVs will have about a 10-15% profit margin. If you own a retail business going or plan to create one, you must consider the opportunities found in China. Whether it's the right move or not depends on the product(s) you want to sell and your stomach for doing business with a foreign entity.
The first thing to consider before you make a decision to import goods from China is whether there are more cost-effective alternatives to getting your merchandise. Do not forget that there are manufacturing operations for many types of goods right here in the U.S. The strengths are obvious: no language barriers, legal protection, great infrastructure for shipping, and so forth. The big disadvantage is the relatively high cost of labor/ manufacturing, which will push you to sell your US made product at a higher price. Not a good thing considering all the Wal-Marts of the world. Retail is a cut-throat industry - you must be price competitive, or you better sell a unique item with few competitors (a very rare situation, indeed). So, the benefits in money and time from importing should be material enough to make it worth the effort. At a minimum, you must be able to determine, with a high degree of confidence, that you stand to benefit from importing a certain good from China before proceeding.
Before you start an import export venture, understand that there are potential risks associated with importing goods from China that you should avoid, such as the chance of mis-communication with the manufacturer; running into a questionable manufacturer who has a per unit price that is too good to be true; and difficulties dealing with quotas, taxes, other import restrictions. A lot of people start by working with an import-export adviser, but this cuts into profits. As you become more familiar with the inner workings of importing, and depending on what you import, you will in the end need to consult legal and tax-related publications to ensure all bases are covered.
Doing business in China, an unfamiliar country for most people, can be very intimidating. But, if you want to gain a competitive edge, you will need to break through your comfort zone, and China presents a very good opportunity for you if you want to engage in retail business. The Golden Rule that trumps everything and that should direct any business relationship is common sense: Chinese and American cultures differ in many ways. Don't assume that things are conducted the same way in China as they are here in the U.S.; this can cost you time and money.
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