The 10 most important rules for China Import

Post by 
Phil Schneider
November 17, 2020


The 10 most important rules for China Import

Avoiding risks when importing China

Many are thinking of importing from China. But it is not so easy to buy goods from China online and then have them delivered without any problems. Many things have to be taken into account. The Mcogroup agency has been supporting traders for over 10 years in Europe and the USA for imported goods from China & Asia.

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Mcogroup Ltd. - Import & Export Consulting
Director: Phil Schneider
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1. The cost calculation

First of all, make sure you know which products you want to import from China and Asia. Carry out an exact market and price analysis in Germany, so that you can ultimately calculate exactly what purchase prices you should achieve in China in order to achieve the necessary competitive sales prices in Germany / Europe.

Please take into account that in addition to the purchase price in China, additional costs of up to approx. 30% on the price of goods in China for logistics, customs clearance and insurance may be incurred.

Be aware that the purchase quantity has to be realistic in order to get offers from Chinese and Asian eon suppliers and therefore the import can be profitable.

2. Customs provisions

Find out all you need to know about the customs and import regulations for the product you want to bring into the EU. You can also call the Customs Information Centre. Any necessary certificates should be requested from the supplier and checked for authenticity and validity by the issuing institute. In this context you can also apply for your EORI number at the customs office, which you will need for import.

3. Manufacturer search in China

Time should be invested in researching manufacturers. Especially when doing online research, you will come across a large number of intermediaries, of whom the Chinese intermediaries in particular like to pretend to be "the manufacturers".

we analyse the address and company data of the manufacturer for you and do further research on the creditworthiness of the respective manufacturer to find out if this is a serious company.

We check the "company license" and the "export license" of the alleged business partner in China for you in advance. If it is a real manufacturer, the company is also willing to provide our company with copies of these documents.

Chinese intermediaries are also happy to pose as employees of the manufacturer and will also send you the desired certificates. In case of a mere online contact it is difficult to distinguish whether you are really negotiating with an employee of the company or with an intermediary. To avoid this we contact the owners (or managers) of the factory directly and have a personal conversation with the person in charge as an import and export company.

Once the first prices have been received, it makes sense to negotiate. But we will first compare the received prices with competing companies and do not negotiate too much below the price corresponding to the market conditions in China, because otherwise the supplier will save on quality.

4. Payment agreement with the supplier in China

We make a payment agreement with the supplier in China in advance, which minimises your risks as an importer. But also remember to transfer these payments to the supplier on time, so as not to get into an unpleasant delay.

Usually 30 - 50 % of the ordered goods are paid on account to be able to start production.
In any case, the bulk of the payment should only be made after the goods have been accepted in China, so that you still have room for negotiation during the inspection of the goods or can have the supplier make improvements if you discover defects. If you have already paid for the goods in full or almost in full, the supplier will not be prepared to make costly improvements. After successful acceptance of the goods without defects, the remaining amount of the invoice of 50 - /0% must be paid to the factory on the same day. The balance of the invoice must already be available on an escrow account in China in order to have the goods delivered after successful acceptance of the goods.

5. Sample order from China

we order samples for you from the suppliers in the narrowest selection first. We first collect the samples from the different factories before we send them all together in one package to you. In this way you save on transfer and transport costs. Afterwards you have the possibility to check the samples and to determine if the quality is sufficient.

In doing so, also urgently examine the product for hidden defects to avoid high financial losses due to high complaint rates after distribution of the imported goods.

6. Order description for the manufacturer in China

We will prepare a detailed order description for the manufacturer in China, which contains all relevant data. The following points should be included in any case:

  • Payment agreement (we will agree on an appropriate down payment and an advance payment for you. In case of a larger value of goods a L/C payment is also possible.
  • Incoterms (it is best if we agree a FOB delivery for you to avoid incalculable cost risks)
  • What documents must be provided by the supplier (in the case of an ocean freight and FOB agreement these are e.g. the B/L, the packing list, the commercial invoice and the certificate of origin - form A)
  • Warranty periods and the details of warranty processing
  • Product details
  • Details on packaging, imprints, labels, EAN, barcodes etc.
  • Shipping Marks, i.e. the labelling of the shipping cartons
  • The dimensions of the cartons, if necessary details of pallets or pallet boxes if they are to be delivered accordingly.
  • Other obligations of the seller

7. Conclusion of contract with the manufacturer in China

Be sure to have the supplier issue a proforma invoice with authorised signature, official company stamp and official company database data. Check the authenticity of the document in a telephone call with the manufacturer.

It often makes sense to make the order agreement (see 4.) part of the contract. Visit the manufacturer as personally as possible to conclude the contract, this can strengthen the relationship of trust and you will get a personal impression of the factory and your contact person in the company in China.

8. Communication during production with the supplier in China

We keep regular contact with suppliers and manufacturers. We constantly ask about the production status and whether the delivery dates are being met. If you do not contact the supplier during production, the supplier will assume that you are not in a hurry and will usually not meet the delivery date.

9. Inspection of goods before shipment

You should never have goods shipped without first having another look at them. Do not fail to check your goods before shipping and to check the quantities of your products so that you receive what was ordered. A stacking and a drop test should not be omitted. In the case of particularly high-quality products or large deliveries of goods, a test institute such as SGS or Hansecontrol should be commissioned for this purpose.

10. Choosing the right logistics

Let a forwarding agency for logistics advise you in detail. Incorrect planning can also lead to high unplanned costs in logistics. Plan in advance with the supplier how the goods can be packed in a space-saving manner. Have the supplier provide you with the volume (in cbm) and weight of the goods in good time in order to obtain quotations from forwarding agents. Include the shipping times in your enquiry with the forwarding agents. For shipments from China these can be between 25 and 35 days. If the transit time of a shipment is considerably longer, this should also be reflected in the offer price. Try to have only one carrier from the loading in China to the unloading in Germany / Europe, so that there is only one contact person in the event of an insured event and the question does not even arise under which carrier the insured event occurred. The freight insurance must of course be covered from the very beginning. Many forwarding agencies do not point this out.

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