SCORE

Imports by Shody Chow

This is the third and final part of understanding imports from a man who knows. If you missed Imports Part 1 and 2, they were posted together on the SCORE LA blog in April, 2016. Just check the blog listings for the first parts of this informative blog write-up on imports under “Considering Imports.”

Remark: readers to use their best judgment on using the information provided, and not to take unnecessary risks in importing

Imports

Remark: readers to use their best judgment on using the information provided, and not to take unnecessary risks in importing

Part 3

Basing on feedback from some readers, I am providing additional information on some aspects of importing that were not included in Part 1 and 2 of this blog.

With the information age, it is now not difficult to find vendors, particularly those located in Asia, online. Some of the websites that you can search for products and vendors are www.alibaba.com, www.aliexpress.com, www.hktdc.com, www.globalsources.com, www.taiwantrade.com, www.indiamart.com.

The largest website is perhaps Alibaba, which is a Chinese e-commerce company that provides consumer-to-consumer, business-to-consumer and business-to-business sales services via web portals. It is necessary to go through a process of vendor qualification, before you should place your first order. Some of the considerations are:

• Manufacturer or trading company
• Years in business
• Exports to North America
• Size of company

There are manufacturers and trading companies listed in Alibaba, and in most cases, it may be preferable to work directly with a manufacturer to obtain competitive prices as well as to reduce the chances of errors due to misunderstandings between the trading company and the factory. Trading companies are middlemen, who facilitate communications and perhaps monitor quality assurance, but may place their orders with different manufacturers for the same product depending on production availability. There is a case to work with a trading company if they offer a wide range of products of interest to you made by different manufacturers. The trading company can coordinate production and shipping.

Since there is a large choice of vendors, it would be preferable to source from one that has been in business for 5 or more years, and has more experience in production and exports.

Products for the US market will have different quality requirements and specifications from those sold in the domestic Chinese market or the Middle East. If available, always select a vendor that exports the majority of their products and with at least 30% of the production for the North American market.

Since it is your intention to gradually build your business to a large size, you would prefer to work with a vendor of a reasonable size, so that they will not have any difficulty to produce your large orders in the future. From the Alibaba website, you can check out the factory facilities, machinery, number of workers etc.

Apart from the basic vendor qualifications, you will have to make a judgment as to the product quality, pricing and ease of communications with the potential vendor.

If you have the opportunity, visit the overseas vendor yourself to check out the manufacturing facilities and meet the key staff. You can see several vendors on one trip, and attend tradeshows as well.

Prices quoted by the overseas supplies could be based on:

• Ex factory
• Free on Board (FOB)
• Cost & Freight (C&F)
• Cost, Insurance & Freight (CIF)
• Landed Duty Paid (LDP)

Ex factory prices are more common for domestic purchases, and the buyer has to pay all the shipping charges after the goods leave the factory. Most vendors in Asia will sell their products on a FOB basis, which includes the delivery cost to the sea or air port, such as FOB Shanghai port.

Some vendors that have a good relationship with shipping companies and can obtain competitive shipping rates may offer prices on a Cost & Freight basis, such as C&F Los Angeles port, while others may also include insurance, such as CIF Los Angeles. Foreign suppliers that are very experienced in exports to USA, may go a step further to quote prices on a Landed Duty Paid basis, and the price will include the shipping cost to USA port, import duties if any, customs clearance and freight forwarding charges.