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US-China Tariffs: How They Hit Importers & Amazon Sellers

US-China Trade War

Like many others, I assumed the US-China trade war would be a short affair. I envisioned some deal involving mutual trade concessions taking place in a matter of weeks.

How wrong I was.

Now we are facing the prospect of a decade-long trade war, that will possibly mark the end of an era. Given that the United States is our main market, in terms of users, the trade war has a severe impact on our business too.

I’m not here to discuss which side is morally right or wrong. But I do have an obligation to share my views of how the US-China trade war may impact small businesses in the US, importing from China.

  • Why the trade war could massively benefit Chinese sellers
  • Which products are affected by the new tariffs?
  • Which products are not affected by the new tariffs?
  • What does this mean for US importers?
  • Will China or the US win the trade war?

The trade war also comes with some unintended consequences, that have the potential to backfire massively. Continue Reading →

How to Make a Telegraphic Transfer (T/T) to a Chinese Supplier

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Telegraphic Transfer (T/T), which commonly called ‘Wire transfer’ is still the most common payment method, when transferring money internationally.

Yet, making Telegraphic Transfer payments is not without risk. In fact, the risks involved are far bigger than most importers might think.

In this article, we explain why a slight misspelling could result in tens of thousands of dollars being withheld by the receiving bank – and why you should never pay privately held bank accounts.

Keep reading, and learn how you can avoid payment delays, scams, and other Telegraphic Transfer related issues.

1. Get the beneficiary name, address and other account details right

When writing money to your supplier’s bank account, you need to make sure that all beneficiary and bank details are correctly, and fully filled in.

If, for example, the beneficiary name is not correctly typed in, the money will be withheld by the Chinese bank – and finally returned back to you.

This is indeed a good security measure, but this will cost you at least 2 to 3 weeks. In addition, you don’t get the bank transaction charges from neither your bank or the suppliers. But, that quite irrelevant, in comparison to what a month long delay could cost your business.

So, why is this even an issue to begin with? Continue Reading →

Air Freight When Importing from China: A Complete Guide

Suggestion: Watch the 10 minutes video tutorial before reading this article

Air freight can bring your cargo from a factory floor in China, to your warehouse, in a matter of days. However, Air freight is not a viable option for all sorts of cargo.

In this article, you will learn more about Air shipping costs, customs procedures, cargo restrictions and insurance options when importing from China.


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air cargo loading

1. Air freight is the fastest mode of transportation

Air freight is superior to Sea freight in many ways. However, the primary reason to get your cargo delivered by air, is shorter delivery time.

While Sea freight can take a month from port to port (that depends of course on the destination), with a few more days spent on administration and wire transfers – Air freight can get your product from the factory floor, to your office, in only 5 days.

The specific delivery time depends, as there are various classes of Air freight, such as express and economy. Regardless, you will save plenty of time.

An interesting fact is that only 5% of the world’s international transportation, in terms of cargo volume, is delivered by air. However, if we instead look at the total value, that figures jump up to 30% of the world’s total. Continue Reading →

Do NDAs Work When Importing from China?

NDA in China

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:

  • Design drawings
  • Technical drawings
  • Bill of materials
  • Artwork
  • Software

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.

When dealing with Chinese manufacturers, however, things are not that straightforward. Continue Reading →

How to Find the Right Ecommerce Product: 5 Inspiring Concepts

Finding the right product

 

I’ve spent the last 8 years helping Entrepreneurs go from idea to finished product. While I’ve dealt with both good and (really) bad product concepts – I am a firm believer in a more creative product conceptualization approach.

The Entrepreneurs that succeed are not the ones who happen to find a ‘best seller product’, or by chance identify a one in a million market gap on Amazon.com.

I’d even go as far as saying that I can’t see much of a correlation between how much money they put in, and their chance of success.

I know Entrepreneurs that made it big, investing less than US$10,000 on the whole product launch. I know others that spend ten times that amount, and didn’t even get a final prototype ready.

It’s all about coming up with something new and finding a unique niche in an increasingly crowded ecommerce space.

But, as I will explain in this article, that is a whole lot easier than you probably think.

1. Use public domain artwork and photographs

public domain artwork

Old paintings and photographs are generally open for anyone to use. This is also a huge resource that is very underutilized by Ecommerce companies.

There’s a wealth of beautiful European and Asian artwork, that can be applied to apparel, watches, accessories, phone cases and many other product categories.

Any textile, plastic or metal can be printed or engraved with classic artwork or photographs.

This is certainly where I would look for inspiration today, if I was about to launch a new product.

Examples

  • Waxed cotton watch straps
  • Classic artwork printed on textile wallets
  • Photography etchings on aluminum phone cases
  • Chinese art puzzles
  • Rembrandt card game collection

Continue Reading →

VAT on Imported Goods from China: A Complete Guide

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Importers based in the European Union must pay Value Added Tax (VAT) on top of the Customs value. In this article, we help you navigate the complexities of ‘Import VAT’ when buying from China.

Keep reading, and learn more about VAT calculations, and whether or not Import VAT is deductible.

We also explain how and when you declare and pay VAT, and much more.

What is Value Added Tax (VAT)?

VAT is a consumption tax in the European Union. In B2C transactions, VAT is always included in the price. If you, for example, buy a product online from an EU based online store, the price you pay includes VAT.

The seller can then offset the VAT it ads on its sales, to the VAT it paid to other other EU businesses, when buying products or services.

Below follows an example:

  • Sales: $10,000 (Including VAT, 20%)
  • Expenses: $5,000 (Including VAT 20%)

This allows us to make the following calculation.

  • Sales VAT: $2,000
  • Paid VAT: $1,000
  • Total: $2,000 – $1,000 = $1,000

Thus, I would need to pay $1,000 of VAT. If I’d spent more on VAT than I added on top of my sales, I would instead get money back from the state.

Continue Reading →

Buying Private Label Products in China: A Complete Guide

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Importing Private Label Products from China is a shortcut to success. How hard can it be to just pick a product, send over a logo file and start selling something on Amazon? Well, as I explain in this article, reality is a lot more complex than what many importers may think.

Keep reading, and learn why private labelling is not really what it seems to be in China, and why it can be more complex to get an ODM product right – compared to a custom designed product.

We also explain what Startups and SME’s must know about Intellectual property issues, printing specifications – and how much you should expect to pay a logo print! Yes, this is by far the most comprehensive guide on private label imports written.

What is Private labelling?

A private label product is manufactured by Company A, but with the brand name (i.e., logo and packaging) of Company B. In theory, Company A (the producer) provides a ready-made ‘product template’, to which other buyers can apply their own brands.

The benefit of private labelling is that you can create a branded product, without investing into all too much time and money in product development – and tooling. Hence, you can launch a product much faster.

Continue Reading →

Payment Methods when Importing from China: A Complete Guide

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About to pay a manufacturer in China? The payment method, and the process, often has a major impact on the outcome. In fact, it can  spell the difference between success and failure, when buying from overseas suppliers. In this article, we introduce you to four common payment methods, used when transferring funds to Chinese suppliers.

Telegraphic Transfer (T/T)

The Telegraphic Transfer is standard bank transaction, placed either through your internet bank, or in a local bank branch. This payment method is accepted by all Chinese manufacturers with a bank account. Virtually all, that is. Albeit common, it offers no protection by itself, unlike the Letter of Credit, which I’ll get back to in a bit.

That is, however, not saying that T/T is necessarily an unsafe payment method. Continue Reading →

Bribery and Corruption in the Quality Control Industry: By Renaud Anjoran

quality control bribery

Importers rely on third party quality inspection agents to accurately report defects on every order.

Receiving a batch with a high defect rate can put you out of business. Especially if you’re an Amazon seller, as you must maintain a very low return rate.

Send a shipment to a fulfillment center with a 10% defect rate and it’s game over.

In other words, your business stand and falls based on the accurate reporting of quality issues and defects, from your QC partner.

Now, what if QC partner accepts payments from your supplier – in order to not report quality issues that can potentially shut you down?

That’s a nightmare scenario for everyone importing from China.

But there are things you can do to save your business, before it’s too late.

Renaud, why is bribes a problem in the QC industry?

Many buyers are quite afraid of this, because the inspector does not report all of his findings. As a consequence, a batch of products that presents a serious and widespread quality problem is accepted.

It means the buyer pays entirely for an order, and (in the worst case) might be unable to use or sell the products. A lot of money is lost, and credibility is lost on the market. Materials have been processed and shipped across the ocean but have to be thrown away. It is a huge waste!

To make matters worse, as the buyer, you likely have no leverage over the supplier. Typically, the order has been paid in full at that point. Not many buyers have a strong enough contract and accompanying documentation that allows them to sue the supplier for the loss.

More than 95% of Chinese suppliers actually use the fact that you did a quality inspection before shipment to their defense.

They will say ‘oh, but even your inspector hasn’t found about this issue, so how were we supposed to find it?’. That’s frustrating, to say the least. Continue Reading →

Customs & Taxes When Importing from China: US, EU, Australia & Canada

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Understanding import duties, customs fees, VAT and other taxes is crucial when importing products from China. However, each country or market (i.e., the EU) have their own customs duty rates and tax calculation methods.

In this article, we explain what every Importer must know about custom & taxes when importing products to the following countries / markets.