Over 250 billion dollars worth of goods per year are imported from China by American manufacturers. Imports from China can be your ticket to wealth or quickly turn into a nightmare for your company if you do not do the proper research BEFORE you start importing. This article will explain some common problems encountered by small companies who start importing products from China.
1) Only Deal With Credible Exporters: One of the most important things you can do before starting the process is to make certain that you are dealing with credible Chinese exporters. Often times, American manufacturers will search the internet for potential exporters and end up with a list of names or companies that they know nothing about. The following scenario happens everyday to some unsuspecting new importer with no knowledge.
Company (YourNameHere) sends their samples over to a potential Chinese exporter for remanufacture and is thrilled when 6 weeks later their samples arrive. The quality of the samples you received are outstanding and the price is unbelievably low. Everything seems great, so you wire $12,000.00 to your Chinese exporter for the first order… and you never hear from him again! That’s right – those 3 samples you received just cost you $12,000.00 and you have absolutely no recourse. How do you avoid this common mistake? Ask for references from your Chinese export source and check them thoroughly. Chances are, if the US firms that have already dealt with your exporter have had good luck, then you probably will as well. Be careful! Although most exporters from China are honest – there are plenty that are not.
2) Know your terminology and BE SPECIFIC. My company ordered 3,000 leather “widgets” from an exporter that we had been doing business with for several years and expected no problems with the upcoming shipment. Until it arrived. The products were delivered and we quickly realized that the “widgets” were not made of leather but rather cheap vinyl. We immediately contacted our exporter and demanded an explanation as to why our products were not made from leather as clearly stated on the purchase order. His response was: “Oh… in China, if you want something made from real leather, then you have to say “genuine” leather. If you don’t say genuine, then you get imitation. An expensive lesson learned.
3) Quality Control: There is none! If you are lucky enough to be the owner of Wal-Mart then you operate your own manufacturing plants in China and have control over quality. If you are a small company who relies on the exporter or the Chinese manufacturer to control quality, then you can count on having quality problems. What’s that mean? It means that from one shipment to the next you may be sent items that don’t match in color to your previous order. Worst case scenario? The next shipments of products might look very different with completely different packaging.
4) Shipping: Once again – if you don’t give exact shipping instructions then you run the risk of receiving a container which is filled to the top with a pile of boxes that literally fall all over you when you open the container doors. Ask me how I know this. Make sure you request all boxes within a container to be palletized and wrapped in shrink wrap.
5) The Bright Side: To import goods from China can be a VERY profitable experience as long as you make sure that you are dealing with reputable exporters. Avoid using export brokers who search all over China for small manufacturers that will quickly throw your purchase order together with no regards to quality. The best bet is to deal directly with established Chinese manufacturing firms that specialize in one product line. If you want to import MP3 players, then search out Chinese manufacturers that specialize in that product and have a proven track record for quality and on time delivery.