In this guide I will walk you through how to import your first products from China. I’ll cover the entire process including identifying good and bad products to import to sell on Amazon and other channels, finding good suppliers and weeding through the bad suppliers, and how to get your shipments from China cheaply and quickly. I’ve written this article with Amazon and ecommerce sellers in mind but even if you’re a traditional wholesaler or retailer you should get a lot of value out of this article.

Topics Covered

  1. Why Import from China?
  2. How to Find Products to Import from China and Sell on Amazon
  3. How to Find Suppliers to Purchase From and Placing Your First Order
  4. How to Ship Your Products from China Easily, Cheaply, and Quickly

Why Import from China?

If you plan to run your own ecommerce business then to succeed you almost certainly need to be importing from China.

The main reason is that in today’s ecommerce world, having your own product brand, whether it be a private label brand or something more proprietary, is basically the only model that works. The drop shipping model, which used to work several years ago, has been over-saturated and has driven profit margins down to nearly zero. I’m speaking from experience-my previous company drop shipped many products and near the end when I sold my company in 2016, these were basically break-even items we sold as accessories to our own branded products.

I’ve sold millions of dollars’ worth of products in nearly every niche imaginable from adult coloring books to 4×4 products, from baby products to boating products. Not every product can or should be imported from China (more on that later) but most products imaginable you need to get made in China in order to be able to compete.

Aside from the monetary aspect though, importing from China is a ton of fun. I have lived in China and I travel to China multiple times a year (as a company write off of course). I’ve run content-based businesses and I’ve run affiliate model websites but nothing compares to the thrill of selling your first physical product that you’ve worked to develop.

How Much Money Can You Make Importing from China?

When I sold my company in 2016 we did about $1.75 million in revenue per year. From this, I made about $200,000 profit. I sold that company in 2017 for just under $1 million. So yes, you can make a lot of money importing but you can make a lot of money from most business models if you work hard enough.

Ultimately, what you have to remember with importing from China is that it requires investing money into buying product and you’re essentially trying to maximize your ROI (return on investment). When you import a product from China, it’s rarely a question of if you can sell that product. It’s a question of for how much and how quickly.

Very broadly speaking, when I place an order for a product, I want to double my money on it and I want to sell out of it in 6 months from the moment I place my deposit. So for example, in my previous company, I had about $100,000 invested in it and I made $200,000 profit off of that $100,000. In other words, I turned my $100,000 into $300,000, or a 200% return. I know people who get a much higher ROI than this and people who can’t even break even but this is what I aim for.

What You Need to Get Started Importing

One of the things that attract people to start an importing or private label business is that it’s very easy to get started. The downside is that, opposed to some other internet based businesses, the upfront costs are a lot higher. This required investment, however, also means that your likelihood of achieving success is higher than other business models. 

What You Need to Import from China?

  • $2000-5000 for purchasing products
  • An Amazon.com Seller Central account (assuming you’re selling in America)

I tend to tell people that the minimum you need to get started is $500. A more reasonable budget is $2000 and ideally $5000. Aside from the fact that many suppliers in China have minimum order quantities or minimum order values, shipping costs are a very considerable cost component to starting an importing business. Often it will cost just nearly as much to import one hundred $5 widgets as it will to import ten of those same widgets. You need to import a certain amount to achieve shipping economies of scale.

Assuming you want to sell on Amazon.com, you will also need to open a Seller Central account on Amazon.com at some point. An Amazon Seller Central account not only gives you a platform to sell your products, it also gives you warehousing and fulfillment capabilities. You can even use Amazon to ship products that you sell off of Amazon. This will cost you $39.99/month. By having this account you can add your own brand, and subsequently products, to Amazon’s catalog. This will allow you to bar code them and ultimately send this inventory from China to Amazon warehouses to have them store your items and ship them.

What You Don’t Need

  • To be physically present in America or have an American EIN, SSN, or Business
  • Any Chinese language knowledge

The United States makes importing products and selling them VERY easy for both Americans and non-Americans. In fact you do not need any SSIN or EIN (let alone U.S. business) to import products into America and sell them now. Imports valued at under $800 are under the so-called de minimis threshold, meaning that they require no formal paperwork or duties. Above this, shipments can be entered under your SSIN or what they call a non-resident importing number which is free to get using this form here.

Needless to say, you do not need any Chinese language knowledge as well. Almost all Chinese suppliers who export have English language websites and sales catalogs and at least a couple of staff members with reasonable English.

Nice to Haves As Your Business Grows

  • A Customs Broker to clear customs for larger orders (about $100-$300 per shipment + duties)
  • A Third Party Logistics (3PL) company to receive larger shipments and deliver them to Amazon warehouses ($100-$500/shipment)
  • A Freight Forwarder to help move your goods from China to your desired country (cost varies on size/speed of shipment)
  • An Inspection company in China (about $300/inspection)

All of the above services we discuss in more depth in this article. None of these things are needed to get your business up and running immediately and I’m a huge advocate of starting your business as soon and cheaply as possible, proving it, and scaling it. However, each of these services above is going to make your job immensely easier as your business grows. Best of all, all of these services are very cheap.

Related EcomCrew Reading (Free)

EcomCrew Importing Course Content (Paid)

How to Find Products to Import from China

The big question you’re all probably asking now is: how do I find a product to import from China? The good news is that there’s still a ton of meat on the Amazon and importing bones. If you think that it’s too late to get started, it’s not. In the middle of 2017 I made it a personal goal to start a brand new brand from $0 to a $1 million which I’ve documented on this blog. However, how you source products has completely changed. I cover how to find products a lot more in the post how to find the perfect product to import from China and sell online.

When I’m looking for products I’m looking for three basic things:

  • Little or no “optimized competition” on Amazon
  • Products that can be profitable to sell
  • Products that I can easily address

I address each of these factors in a lot more detail in the above mentioned article.

EcomCrew Importing Course Content (Paid)

Good and Bad Products to Import from China

China is the factory of the world but there are certain products which are good for small importers and others which are bad. Identifying good and bad products basically comes down to understanding two critical differences between China and Western countries:

  • China is a developing country with different quality standards from the West
  • China has different norms around intellectual property

In China there still exists a huge gap between the best suppliers and the worst suppliers. This owes largely to the fact that China is still a developing country and much of its workforce, especially in factories, is neither highly educated nor highly skilled. There are certain products which have a much higher level of variation in quality than others. Products that are simple and labor intensive can be expected to have quite reasonable quality. Example products would be mouse traps, garlic presses, and furniture. You still need to be extremely vigilant around quality (which we’ll discuss later) but these are relatively reliable products. These products are also relatively safe from a consumer’s point of view. A garlic press that disintegrates when being used isn’t likely to cost anyone besides the garlic clove.

On the contrary, the more complex a product is, the higher likelihood it will be produced of bad quality. The most obvious examples of these are electronics. China still produces enormous amounts of terrible quality electronics and it’s where I see new importers being burned most often.

Because of the quality gap, you should also avoid any inherently dangerous products. There’s an ethical reason behind not importing a product that poses a serious risk to a consumer but there are also other reasons from a business perspective. First, inherently dangerous products are likely to require various certification from your supplier which they may not have. Second, you, as the importer, are responsible for any damage and injury your imported products cause. Electrical devices (i.e. anything that plugs into a wall) are examples of products that are both highly regulated and pose a lot of risk to consumers (specifically for fire and electrocution).

Finally, many Chinese suppliers still have a different view of intellectual property from Western countries. Many suppliers are content to rip off patented, trademarked, and copyrighted products and sell them to you (buyer beware). Just because you can buy these products from suppliers in China doesn’t mean that you should or that you are legally allowed to import them. Plain and simple, don’t do this. By the same token, avoiding products that require a high degree of branding in general is a good idea, fashion items being the obvious example. Branded fashion items are not purchased because of price, quality, and features like a garlic press is–they’re purchased because of the brand name and what that name purveys. If your products don’t have a recognized brand name, no matter the cost, you likely won’t be able to successfully sell them.

EcomCrew Importing Course Content (Paid)

How to Find Good Suppliers in China

OK so you’ve found a great product to import. Now how do you find a supplier for this product? Before we get into that, we need to understand some basics about Chinese suppliers.

Most new importers, when they import from China, fear that they’re going to wire transfer money to some factory in China and never receive their products. This isn’t your primary worry when importing from China. China is an incredibly safe country, somewhere around the 32nd safest in the world, ahead of my home country of Canada and well ahead of the United States. I’ve wired millions of dollars to China and always received my products. Sure, there’s thieves and bad people in China, but this isn’t your primary concern.

Your primary concern will be ensuring quality products. Chinese factories won’t steal your money but they may send your inferior quality products.

Where to Find Suppliers

The most common place to find suppliers is Alibaba and Aliexpress and we have an excellent guide on using Alibaba. With Alibaba you’re normally buying from the factory or at least a very specialized trading company and they have relatively high minimum order quantities (MOQ). With Aliexpress you are normally buying from a reseller (it could even be some teenager in his bedroom!) and you can buy one or two items at a time but at a much higher price.

canton fair

The twice yearly Canton Fair is the Mecca of trade shows in China.

Although Alibaba is where I find most of my suppliers, my preferred method by far is finding suppliers from within China mainly by visiting trade shows, as often the best factories are not advertising online. There are a number of large trade shows in China, specifically the Canton Fair (see our guide) and even a year long wholesale market in Yiwu (see our guide). It is even better to go to industry specific trade shows. In our course we go into some hacks you can use to find these factories without actually visiting China.

Related EcomCrew Reading (Free)

EcomCrew Importing Course Content (Paid)

Types of Suppliers in China and Selecting a Supplier That’s Right for You

In China there are two basic types of Suppliers: factories and trading companies.

Factories are exactly as they sound. They are factories that produce the actual product you are purchasing. In general they have lower prices but higher minimum order quantities and less product selection.

third tier factory

An example of a very rudimentary factory I visited in China.

The other type of supplier in China is trading companies. Trading companies purchase products from a bunch of different factories. They do not actually produce any products themselves. The advantage of trading companies is that they have greater product selection and lower minimum order quantities.

Neither trading companies nor factories are inherently bad or good. If you’re ordering a lot of one product though factories are generally best for you and if you want a lot of products but only a small quantity of each then trading companies are normally superior.

Ordering Samples and Making Your First Order

OK, so you’ve found your perfect product and you found a supplier. Now what?

Normally you want to order a sample of the product. A sample can be misleading though as your supplier is often going to send you a perfect quality product even if it’s not necessarily indicative of their production quality. Photos and videos, in today’s smartphone era, can also often give you a very good idea of what the product looks like. Nevertheless, I suggest you order a sample from your supplier before proceeding to a large order.

When you order a sample from your supplier they will normally charge you for shipping and the cost of the product. Shipping will not be cheap–at least $100-$300 unless your sample is extremely small. Your supplier will be happy to arrange air shipping of the sample to you.

Once you’ve reviewed the quality of the sample, you can proceed to place a larger order. I normally suggest to make your first order size as low as possible (the supplier’s minimum order quantity). I’ll get more into this later. You want to gradually build up the order size with your supplier over the course of two or three orders. When you place your order, submit an actual Purchase Order (aka an invoice) that consists of the following things:

  • Order quantity
  • Price
  • Shipping terms, i.e FOB, CFR, EXW (More on this later)
  • Date the order will be completed

There are thousands of free Purchase Orders online. It doesn’t need to be complicated but by submitting an actual Purchase Order (PO) you demonstrate more professionalism than most other importers.

EcomCrew Importing Course Content (Paid)

Negotiating Price and MOQ with Suppliers

In China there is a golden rule: quality is inversely related to price. If you receive quotes from ten suppliers and nine of the suppliers quote you $20 but one supplier quotes you $15, you should be very nervous about the $15 quote–there is almost certainly a reason for the lower price which could include:

  • The quality is significantly lower than others
  • Different shipping terms (i.e. EXW instead of FOB)
  • Significantly higher minimum order quantity (MOQ)

Your goal when purchasing is to determine what the fair market price of your product is. As mentioned before, to do this, you need to get multiple quotes, ideally three or more. Once you determine the fair price of your product, do not expect to be able to negotiate a lot on that price unless you are ordering a large quantity (5-10x their MOQ size). Even then, a 5% discount is significant. If you manage to negotiate more than this, the supplier may start substituting inferior materials without telling you. In our course, we cover some other things that you should negotiate aside from price.

MOQs is where you will likely focus most of your negotiation. I like to order as small of a first shipment as possible, validate the product, and then proceed to place a larger second order. I do not want to order 5000 hot pink hunting gun bags only to find out no one wants to buy hot pink hunting gun bags. I’d much rather order 500 and ideally 50. Whereas negotiating price is often self-defeating, negotiating on MOQ is purely to your advantage. It’s normal to try and get your supplier to agree to half their initial stated MOQ. Most suppliers tend to have MOQs that are around $2500-$5000 so if you’re ordering a widget that costs $1 then an MOQ of 2500-5000 is normal. If you’re ordering a widget that costs $100, then an MOQ of 25-50 units is normal.

EcomCrew Importing Course Content (Paid)

Payment Terms and Making Payments

When you are arranging payment terms with your supplier, the most common terms you will come across will be 30/70. That means you pay 30% when the order is placed and 70% upon completion.  50/50 is becoming more popular now, and more and more often I see 100/0 which means 100% deposit. I will never accept 100/0 payment terms. If you cannot negotiate it to 50/50 or better, reject the supplier. The only exception is for samples where you will always pay entirely up front or if an order size is below $500 or so.

Payment is almost always made by wire transfer or sometimes referred to as TT (telegraphic transfer). Your supplier should give you all of the information you need and you should expect to pay $10-$40 each time you make these payments. Payment by credit card, PayPal, or similar method is generally not accepted for orders larger than $5000 or so.

Payment is almost always in US dollars. The Chinese Renminbi is pegged to the U.S. dollar so there’ll never be any currency fluctuations unless the Chinese government decides to appreciate or depreciate their currency. If your source of revenue is not in US dollars than you’ll be subject to currency fluctuations between your home currency and the US Dollar. If you’re transferring currency often, I suggest using an exchange service like Transfer Wise that will have significantly better exchange rates than most banks.

How to Ensure You Get Quality Products

As I mentioned previously, one of your biggest concerns when importing from China will be to ensure quality products. Quality standards are the biggest difference between Chinese manufacturing and Western manufacturing. First, Western countries (re: Amazon buyers) have much higher quality standards. Second, your supplier will assume that every detail of your product that you do not define is negotiable and not important. Third, the quality of products will start high on initial orders and gradually decrease over time if you are not vigilant, something called quality fade.

There’s really just three things you need to do to ensure quality products:

  1. Define what a quality product looks like
  2. Inspect your shipments to ensure they meet the above definition
  3. Be continuously vigilant against quality fade

Define “Quality Product”: We have an in-depth guide on avoiding crappy products. In summary, if you received a sample or first shipment and every product is gloriously fantastic, you need to define what those Golden Products look like. If you do not, your supplier will slowly decrease the quality and an inspector will not know what to look for. For one of my brands we import bags. My specification sheet will include things such as: material type/weight/color, strap width, type of zippers, button type, critical dimensions, etc. You can even be ultra-lazy and ask your supplier to define all the critical details for you. Doing so eliminates the chance they will change any of those details down the road.

Inspect your Shipments: We have an in-depth guide on how to conduct a third party inspection. A third party inspection costs about $300 and a company like AsiaInspection will send a person out to your factory, for an entire day, to inspect your products. There’s no reason not to do it.

Avoid Quality Fade: As mentioned, if you are not vigilant, the quality of your products will fade over time. You need to guard against this. You will not all of a sudden receive products that are awful. Instead, over time quality will start to be skimped here and there until at one point you receive awful products. The heat will slowly be turned up and you’re the frog in the pot. Expect something to change on your products. Inform your supplier. Ask for some free products and inspect against it on the next order. If you do this, your supplier will stop turning up the heat on you.

Related EcomCrew Reading (Free)

EcomCrew Importing Course Content (Paid)

 

Shipping and Logistics

In my own personal experience and after helping other first-time importers, having your goods shipped to you and receiving them is one of the most stressful and most challenging aspects of importing.

Three Ways to Ship Your Stuff: Air Courier, Air Freight, and Sea Freight

There are three ways to ship your items from China: air courier, air freight, and sea freight. Air courier is simple for most people to understand as it basically means UPS, FedEx, DHL, etc. This is what they call a door-to-door service. Your supplier ships your products and they arrive wherever you want them to arrive, i.e. your home or Amazon warehouse. The courier also has customs brokerage service so you don’t need to worry about getting a customs broker.

Air Freight and Sea Freight differ vastly from air courier (FYI there is no such thing as sea courier). These services are arranged through a freight forwarder and typically are quoted from China to some airport or sea port, i.e. to the sea port of Long Beach (near Los Angeles) or Los Angeles International Airport (LAX). You will either have to arrange to have your goods picked up or ask your freight forwarder to arrange to have them shipped to your final destination (which will involve a significant surcharge). They will not provide customs brokerage (at least not for free). Is your head spinning yet? Then check out our in-depth international freight step by step guide.

air freight vs sea freight vs air courier

Air freight and sea freight are quite a bit more complicated than air courier the first time around (but easy after that). There’s a big trade off though: they are much cheaper. Air freight is about half the cost of air courier and sea freight is about 10% the cost of air courier. Sea freight is always quoted by volume whereas air shipments are quoted by weight, but a good rule of thumb is that sea freight works out to less than $1 per kg.

Related EcomCrew Reading (Free)

EcomCrew Importing Course Content (Paid)

Shipment Terms

In international trade there is something referred to as Incoterms. These are terms that have legal and liability consequences but, more importantly for new importers, they have cost consequences. You can read our guide, Shipment Terms, The Real Costs, and Be Aware of EXW

The important thing to know is that EXW is the most expensive as you will have to pay for all of the costs associated with picking up the goods from your supplier’s factory and delivering them to the port along with some other miscellaneous fees (any freight forwarder will do this without a problem–it just costs more money). For FOB, your supplier pays for all of those fees. A quote for EXW will add around $300-$500+ in fees to you. When comparing quotes, make sure the suppliers are quoting the same shipment terms. If they do not, ask the one quoting EXW to quote you their FOB price or add $300-$500 to the quote.

Related EcomCrew Reading (Free)

Customs, Tariffs, and the Magic $800 De Minimis Value

Once your goods ship and have arrived in your country they need to clear customs into your country. If you shipped via air courier (UPS,DHL, etc.) then the shipping company will do this for you and give you a bill for it. All other shipments need a customs broker (you can technically do it yourself but it’s MUCH easier to pay a customs broker). A customs broker will charge you around $100-$300 in paperwork fees and also all of the applicable duties and tariffs. In the USA, these are normally around 0-20% but can be significantly more than this–always check the duty rate for your item before importing.

There is one exception, and that is importing into the USA when your goods are under $800. America has a ridiculously high de minimis value. This de minimis value is just a Latin way of saying that any shipment under this amount does not have to pay any duties (or a customs broker). Sounds too good to be true? It’s not. Many people strategically plan their shipments to be under this amount. If you’re fortunate to have lightweight items that can be air shipped and are low in value you can easily ship into Amazon FBA warehouses and use this to your advantage.

Getting Your Goods from China to Amazon FBA

When you’re shipping goods to Amazon FBA from China there’s a few quirks you need to be aware of when shipping from China.

The two annoying quirks are that Amazon will often have you ship your goods to multiple warehouses throughout the United States and Amazon will never pay a dime for any duties/brokerage fees when they receive them. We go into more detail on this topic in the free guide Shipping Your Goods from China to Amazon FBA and give some more advanced strategies in our paid course.

In regards to the first point about multiple warehouses, this means that is very difficult to ship sea freight from China directly to Amazon FBA without using a third party logistics company (3PL). Shipping via air courier is slightly easier but it will also cost you much more money.

In regards to the second point, Amazon not paying for any duties/brokerage, this means that you need to be careful that UPS, DHL, or other courier never requests a dime from Amazon. Otherwise they will be all too happy to ship the goods straight back to China. The easiest way to avoid this is shipping Duty Delivery Paid (DDP) but refer to either our free guide or paid guide for information.

Related EcomCrew Reading (Free)

EcomCrew Importing Course Content (Paid)

Conclusion

This guide should have given you everything you need to get started with your importing business. I’ve run multiple importing companies over nearly a decade of my life and while some of the effective strategies and tactics have changed over time, the overall business model is the same. Despite there being increased competition, ecommerce continues to grow at nearly 15% per year in the United States and 20% globally, meaning the size of the pie has also gotten much larger.

Do you have any questions about sourcing products, importing, or shipping your products? Feel free to comment below. For more in-depth questions, consider joining one of our paid courses where Michael Jackness and I give unlimited 1 on 1 email support for any of your questions.

Dave Bryant has been importing from China for over 10 years and has started numerous products brands. He sold his multi-million dollar ecommerce business in 2016 and is currently starting another ecommerce company. He’s also a former Amazon warehouse employee of one week.