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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.
You’re not going to outsmart Steve Jobs
We receive countless inquiries every weeks from small businesses looking for anything from Apple iPhones and iPads to Sandisk Memory Sticks and brand name apparel. While many of these products are manufactured in China, large corporations like Apple maintains tight grip on their Supply Chain.
Considering the amount of money these companies put into development and marketing, do you think it makes sense that they would allow third party importers to purchase their products for rock bottom prices in order to dump prices? Well, I thought so.
The same thing can also be said about domestic Chinese brands such as Huawei or Xiaomi. Huawei is a market player in Europe and America. They got more than enough resources to manage distribution on their own. Xiaomi has yet to launch their products internationally. However, their products are manufactured for the domestic Chinese market and thus not compliant with European and American product safety directives, such as CE and CPSIA.
Free Consultation (30 Min): Ask Questions About the Importing Process
There are plenty of stories about contract manufacturers of brand name products running night shift production. The products are “essentially the same” as the original since they are produced in the very same factory. But that’s not the only benefit – the prices are so low that even a small order can generate a decent return on investment. Sounds too good to be true? It is! There’s no “night shift production” in China. It’s a myth. A fairly tale.
Let me ask you something. Sony is about to shut down their TV business. If Sony is struggling to make a worthwhile profit in the TV industry, then how the hell are you supposed to do that?
This is only a story used by scammers to lure naive business owners. Besides, even if there was such a thing as “Nightshift” production it wouldn’t be legal. Why? Because parallel importing is illegal in most EU and US states. There’s only one way to buy brand name products and that is to purchase them from the official distributor in your country or market. However, if this comes as news to you, then I honestly doubt that you are ready for such a business venture. Companies such as Samsung and Apple are, and can afford to be, picky about who they do business with.
China retail prices are usually higher than in the US and Europe
Guess what, an iPhone 5S costs up to 25% more in the Peoples Republic of China compared to the USA. Sounds strange? It’s not. The difference between rich and poor in China is huge. It doesn’t make sense for companies to cut their prices. Those who can afford it will buy regardless of price. Well, almost. Either way, the average Zhou won’t be able to afford an iPhone even if Apple lowered the price with one or two hundred dollars. In other words, forget about importing brand name products from China.
Counterfeit products, payment frauds and confiscated cargo
Those who attempt to import brand name products from China are in general very inexperienced. In other words, they are easy targets for scammers. Thus, it should not come as a surprise that this industry, if it can be called that, is completely infested with scammers. While some of them won’t hide the fact that they are trading with fake products, other claims to supply authentic brand name products for amazing prices.
As hinted in the headline, there are only three possible outcomes when importing “brand name” products. You’ either receive fake goods or you won’t receive anything at all. If you’re really lucky, the scammer takes your money and run. Never to be seen again. If you’re not so lucky, you’ll receive fake products. Well, at least that’s something? That’s the problem. Importing fake products is illegal. Importing fake products for a commercial purpose (as in actually selling them) are rather likely to result in a lawsuit. You certainly don’t want to end up like these guys.
Apart from violating IP laws, counterfeit items are NEVER compliant with US, EU and Australian product regulations and directives. Considering that fake products are often manufactured by criminal syndicates, this should hardly come as a surprise. Noncompliance with product certification standards (i.e. CE, REACH and CPSIA) can be just as disastrous as getting caught importing fake products.
Ensuring compliance with regulations in your country or market is critical. Importing non-compliant items is illegal and may result in having your items refused entry by the customs authorities – or even major fines in case someone is injured or property is damaged. There are several reported incidents involving fake products, phone chargers in particular, causing serious injury or even death. Click here if you want to read more about securing compliance, when importing from China.
Create your own brand
I hope I’ve convinced you to not even consider importing branded products from China. Forget about free riding on someone else name. If you’re serious about importing products from China you should create your own brand. While it’s no short cut, branding a product ads a ton of value. Branding a “Made in China” product is easy. Most suppliers can offer a custom logo or product packing layout for a low cost.
Free Consultation (30 Min): Ask Questions About the Importing Process
Co-founder of Asiaimportal (HK) Limited and based in Hong Kong. He has been quoted in and contributed to Bloomberg, SCMP, Alibaba Insights, Globalsources.com, China Chief Executive, Quartz Magazine and more.
Hey there, I’m Fredrik!
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