COVID-19 Notice: The Asia Import Platform is designed to ensure that you can manage the importing process from anywhere – at a time when it’s impossible to visit suppliers and attend trade shows in Asia.
Importers issue Purchase Orders (PO) as a formal procedure to state their intention to buy certain products, according to the terms specified in the PO. The supplier should then counter by issuing a Proforma Invoice (PI), stating their intention to sell the products to you according to the terms stated in the PI.
While this may sound like an outdated formality, understanding the Purchase Order and Proforma Invoice issuing process can help avoid severe misunderstandings – leading to quality issues, receiving the wrong product or delays.
In this guide, you will learn what every importer should know about the following:
What is a Purchase Order?
What do I need to include in my Purchase Order?
How do I submit the purchase order to the factory?
Do I need to submit a Purchase Order before each production run?
Why do I need a Proforma Invoice from the factory?
What kind of information should the Proforma Invoice include?
How do I avoid payment fraud?
What is the difference between a Proforma Invoice and a Commercial Invoice?
Can I use the Proforma Invoice as proof of importation value?
In addition, we also provide sample invoice documents:
Many Ecommerce business owners are, rightfully, worried about their suppliers duplicating their products. For many, a Non-Disclosure Agreement (NDA) seems to the logical method to prevent suppliers from ever making replicas.
It makes sense in theory. Make your supplier sign an NDA, and you go perpetual exclusive rights for that power bank or handbag you plan to sell on Amazon.
The reality is, as you will learn in this article, very different.
What is the purpose an NDA?
An NDA is a confidentiality agreement that is meant to prevent, for example, manufacturers from disclosing product information. This may include the following:
Bill of materials
In theory, an NDA prevents a supplier from using your product specifications to manufacture products, or share them with other companies. The NDA also sets penalties, in case the supplier would fail to comply with the terms.
In addition, an NDA can be set to be terminated after a certain time, or when a milestone (i.e., the product is officially launched) has been reached.
Before you can start importing products, you need to obtain all required licenses and permits. Failing to do so, can result in your cargo being seized by the customs, or at least delayed for a few days or weeks.
Or worse, you can be sued for using technology and IP without paying for it.
In this article, you will learn what every importer must know about permits, transportation restrictions, brand, technology and patent licensing – and why you should never assume that your supplier will do the work for you.
1. You don’t need an import license or permit for most products
Only a few categories are restricted, in the sense that you need to obtain some sort of license or notify the authorities in advance.
This article is written by Michael Michelini, founder of GlobalfromAsia.com
I remember when I first moved to China in 2007 and I immediately wanted to register a Chinese company to “go direct”. I really had no idea what I was doing except for the limited blogs from incorporation services trying to push me to pay them their fees.
But the idea was, by registering a Mainland Chinese company, I would be on the “inside” of the game and be able to get special discounts and benefits. As I dug deeper, while in China, I realized most people were using Hong Kong companies for their trading.
Then it started to make sense to me, Alibaba and all the other supplier sites were loaded with Hong Kong flags – yet it is such a small area, how could that be?
Manufacturing is not a science. For importers, both big and small, it’s not a matter of if quality issues will occur – but when. So, what obligations do Chinese suppliers, both traders and manufacturers, actually have to compensate their buyers for such complications? The answer is simple: Essentially none. There’s no international treaty forcing the supplier to, by default, compensate defect items according to a pre-defined framework.
Yet, many Chinese manufacturers claim to offer a warranty, sometimes valid for years! In this article, we explain why a ‘warranty’ in outsourced manufacturing is not really what you think it is, and why you need to go to the bottom and dissect the actual terms, rather than making assumptions, that so often prove to be disastrous.
There are no ‘warranties’ or ‘guarantees’ in international trade
The term ‘warranty’ is very misplaced in a Business to Business context. A warranty, in the sense that most interpreters the term, is a mechanism to protect consumers. In company to company dealings on the other hand, it’s all up to the buying and selling party to negotiate terms on their own. This is in no way exclusive to China, but also valid in Europe, America and most other markets. That is not saying there are no regulations whatsoever, applying to business dealings.Continue reading Warranties & Refunds When Buying From China: A Complete Guide
Why bother with creating your own brand when you can free ride on one that’s already well established? Many naive importers assumes that importing brand name products from China is a short cut to success. It couldn’t be further away from the truth. In this article we explain why it’s no possible and how an attempt to import branded products can ruin your business.
Importing from China and other Asian countries is a risky and complex process. Signing a contract can be the antidote against a wide range of common mistakes and issues when importing from China. This article will give an introduction to why a signed and stamped contract with your supplier can make a huge difference on your bottom line.
Reason 1: Clarity regarding product specifications can prevent disastrous misunderstandings
Misunderstandings between the supplier and the importer regarding materials, design, components, colors and other product specifications are the most common reason why quality issues arise when importing from China. We list a few reasons below:
Important product specifications are easily lost in translation when communicating over email or Skype