Category: Recommended Articles

US-China Trade War Tariffs: An Essential Guide for Importers & Amazon Sellers

Posted on by Fredrik Gronkvist — 20 Comments

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 US-China Trade War Tariffs: An Essential Guide for Importers & Amazon Sellers

Payment Methods when Importing from China: A Complete Guide

Posted on by Fredrik Gronkvist — 45 Comments

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

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About to pay a manufacturer in China? The payment method, and the process, often have 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.

Content Overview

  • Telegraphic Transfer (T/T)
  • Letter of Credit (L/C)
  • Alibaba Trade Assurance
  • PayPal
  • Bitcoin and other cryptocurrencies
  • Payment frauds and scams
  • USD bank accounts for importers
  • Sending Money to China: Q&A with Neat in Hong Kong

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 Payment Methods when Importing from China: A Complete Guide

Buying Private Label Products in China: A Complete Guide

Posted on by Fredrik Gronkvist — 26 Comments

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Planning to import private label (ODM) products from manufacturers in China? While it can definitely save time and money, private labeling also comes with intellectual property risks and potential quality issues.

Keep reading, and learn what importers and Amazon sellers must know before buying private label products from China.

This is covered
  • What is private labeling?
  • Examples of private label products
  • Pros and cons of private labeling
  • How to find private label factories
  • Why most factories don’t offer ‘true’ private labeling
  • Logo and labeling costs
  • Printing specifications
  • Product packaging
  • Product safety, labeling, and compliance

Bonus: Selling Private Label Products on Amazon – Q&A with Rachel Greer Continue reading Buying Private Label Products in China: A Complete Guide

Sea Freight & Shipping from China: The Ultimate Guide

Posted on by Fredrik Gronkvist — 139 Comments

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Shipping by sea is the most cost-effective transportation method when importing from China, and elsewhere in Asia. That said, understanding how the shipping process works is as error-prone as it is tedious and mind-numbing – especially for small businesses without prior experience.

In this comprehensive guide, you will learn everything Amazon sellers and small businesses must about sea freight when importing from China.

This is covered

  • Incoterms
  • FCL and LCL Shipping
  • Shipping Insurance
  • Shipping Lead Times
  • Container Types
  • Export Packaging
  • Shipping Documents
  • Freight Cost Overview
  • Shipping Scams

Continue reading Sea Freight & Shipping from China: The Ultimate Guide

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

Posted on by Fredrik Gronkvist — 75 Comments

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Understanding import duties, port charges, VAT and other taxes is crucial when importing products from China, especially in a time when trade tensions are at an all-time high. However, each country or market have its own import duty rates and customs value calculation methods.

In this article, we explain what every Importer must know about import duties, customs valuation methods, and other taxes when importing products to the following countries and regions.

  • United States
  • European Union
  • Canada
  • Australia
  • New Zealand
  • United Kingdom

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

Minimum Order Quantity (MOQ) – Why It’s Required by Chinese Suppliers

Posted on by Fredrik Gronkvist — 27 Comments

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The Minimum Order Quantity (MOQ) requirement sets the lowest quantity of a certain product (e.g. 500 pcs) that a supplier is willing to sell. If the importer cannot reach the MOQ requirement, then the supplier is not willing or able to enter production.

In this article, I explain why the MOQ requirement exists, and what you can do to reduce the number of units you need to buy.

What is the Minimum Order Quantity (MOQ)?

The MOQ requirement is the minimum number of units you need to order from a supplier. It can be set per order, per product, per material or per color. For example, if a supplier sets their MOQ at 500 pcs, then you must purchase at least 500 pcs before they can accept your order.

How do I find out the MOQ of a supplier?

The MOQ is often specified on the suppliers Alibaba page, or website. You can also contact them directly to ask for their MOQ.

Keep in mind that the MOQ is fluid, as it varies depending on a range of factors. In addition, there are also different MOQs to keep track of, not just one.

What is the Minimum Order Value?

A Minimum Order Value is the lowest value of goods a supplier is willing to sell on a per order or product basis. If the Minimum Order Value is set at US$5000, then they will not accept orders below this figure. That said, manufacturers almost exclusively set a minimum quantity rather than a minimum value.

1. Low-profit margins require larger volumes

Most Chinese manufacturers tend to operate on razor-thin profit margins. Often as low as 3 to 4%. Low-profit margins require the supplier to produce a large number of products in order to break even. Continue reading Minimum Order Quantity (MOQ) – Why It’s Required by Chinese Suppliers

Canton Fair Autumn 2019: The Ultimate Guide

Posted on by Fredrik Gronkvist — 8 Comments

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The Canton Fair is the longest-running and the largest trade show in Mainland China. Think of it as the ‘offline version’ of Alibaba.com, and you’re getting close. In this guide, you will learn everything importers must know about the Canton Fair:

  • Why should I visit the Canton Fair?
  • Canton Fair Products and Phases
  • Canton Fair Dates 2019
  • Traveling to the Canton Fair
  • Visitor Registration
  • Visa Requirements
  • How to get an invitation letter

As a bonus, I also explain how to prepare and attend the Canton Fair, and manage follow-ups.

  • Why you must prepare a product specification before your visit
  • The questions you must ask each supplier at the trade show
  • How to follow-up with the suppliers after the trade show

Continue reading Canton Fair Autumn 2019: The Ultimate Guide

VAT on Imported Goods from China: A Complete Guide

Posted on by Fredrik Gronkvist — 80 Comments

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Imported from Asia to the EU, or selling cross-border? In this guide, we explain what importers, Amazon sellers, and cross-border e-commerce companies must know about the Value Added Tax (VAT) in the European Union.

We also collaborated with Alex Wyatt from SimplyVAT and Dr. Matthias Oldiges from KMLZ, two of Europes leading experts, to create this comprehensive VAT guide.

This is covered

  • VAT calculations for European importers
  • VAT rates in EU member states
  • How and when to pay VAT
  • VAT registration for EU companies
  • VAT registration for non-EU companies
  • VAT when dropshipping products
  • VAT when selling products online within the EU
  • VAT registration when selling from overseas to the EU
  • VAT when selling on Amazon

What is Value Added Tax (VAT)?

The 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 subtract the VAT paid on imports, from VAT added on top of the sales price.

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 a VAT of $1,000. 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 VAT on Imported Goods from China: A Complete Guide

Trading Companies in China: A Complete Guide

Posted on by Fredrik Gronkvist — 10 Comments

Trading Company

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Everyone wants to stay away from Trading Companies and go directly to factories when buying from China. That said, it’s not always clear when the trading ends and the manufacturing begins. In this article, I aim to explain what a trading company is, and how they differ from manufacturers.

Further, I also cover the different types of trading companies, some of which are good and some of which are less so. Continue reading Trading Companies in China: A Complete Guide

List of Product Testing Labs in China: An Overview

Posted on by Fredrik Gronkvist — 7 Comments

accredited laboratories

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Lab testing is the only way to verify that your imported product is compliant with all applicable safety standards and substance regulations. However, not all test reports are equal, as only those issued by accredited testing companies are actually valid.

For example, the CPSC in the United States lists testing labs around the world that are accredited, meaning that they only accept test reports issued by the listed companies.

In this article, we list some of the world’s leading testing labs in Mainland China and Hong Kong:

  • QIMA (Formerly Asiainspection)
  • CMA Testing
  • SGS
  • TUV
  • Bureau Veritas
  • Intertek

In addition, you’ll also get these questions answered:

  • Why do I neeed an accredited testing laboratory to check my products?
  • FCC Accredited Labs in Asia
  • FDA (USA) Accredited Labs in Asia

Continue reading List of Product Testing Labs in China: An Overview