Importing



I set out one day to find out how certain sellers were able to sell some items on Ebay so cheap.  I
thought, "Where are these guys getting this stuff?"  The answer is overseas.  Even then, it took
me 6 months to figure out where they were getting some tools and how I could get them too.  I
learned a lot of valuable facts along the way.  A lot of them I learned the hard way so I will try to
enlighten you along the way.

First off, a tremendous amount of items are made over seas.  Some people get their jaws tight
about buying something made in a foreign land.  I say get over it.  This is business, and labor
costs are cheaper overseas.  I find that quality varies and have developed a good technique to
find out about it.  I think China in particular gets a bum rap.  I find the people there so
accommodating to work with and very genuine.  There are few things that you need to know to
find out if it’s worthwhile for you to import items.  Yes things are cheaper but not always
worthwhile.

To me, importing products is the future.  You would be amazed at the items that are imported
today.  Importing and exporting are huge parts of the economy.  Taking advantage of world
markets makes you a better business person.  A good example of this would be in China.  China
rules the juvenile furniture market.  If you’re going to try and compete with them you will certainly
fail.  You can always import your furniture for cheaper from china.  I do not import my children’s
sets from china for one reason and one reason only.  I cannot store the quantities that I need to
buy to make it worthwhile.  I can buy chairs for example, but they come assembled and take up
considerable room.  Now I don’t want to keep 800 chairs at one time, so for now I don’t use them.  
Another thing to keep in mind is to determine what kind of materials they use.  Chinese woods
are slightly different than lumber here in the USA.  Also keep in mind that most of the world
operates on the metric system.  You will often get shipping measurements and item
measurements that are all metric and it can be a little confusing.  Put this link into your favorites. I
use it all the time.   www.wihatools.com/conversion.htm
There are two ways to go about finding imported items.

The first way is to find them yourself.

This involves a lot of legwork but is totally attainable.  Basically you need to contact companies
one at a time and express interest in their product.  Developing these relationships takes time
and a lot of email.  All good business relationships are developed one at a time.  Try with search
engine searches for you’re item of interest and go from there.  I suggest keeping a search log to
stay organized. (I have included one in the forms section)   I find that communication with Asian
companies is hit or miss.  About 50% of them respond to your inquiry.  When they do respond
they are usually gushing with enthusiasm to do business with you.  I find a lot of heart in their
responses and find them brutally honest people.  I love waking up to see response like “….
looking forward to being your best friend in China.”

There is something about people like that, business like that is hard to find here in the states.  
Make sure you remember there is a time difference if you want to contact them.  There are
starting to utilize email very heavily but most still like fax machines a lot.  They almost always want
your fax number.  I feel stupid if I don’t have one, some how less professional.  There are also a
number of import export clubs that you can join or at least look into.  I would buy every book I
could get my hands on to better equip myself in the art of international trade.

Here is another website that I recommend reading and then going back on a regular basis.  www.i-
b-t.net It is loaded with a ton of information about importing and has particular articles of training.

How do you pay?

A lot of confusion is cast upon future importers on how to pay for your goods.  Most Asian
companies do not take credit cards.  Most operate on what they call letters of credit.  The above
website has a good lesson on it.  Basically a letter of credit is like a purchase order that spells out
all the details of the deal.  The easiest way I have found of paying Asian companies is to just wire
them the money.  I usually work out a deal to wire a deposit and wire the rest when they are ready
to ship.  You can do it from your bank, its called and international wire transfer.  It usually costs
about $35 to $40 depending on your bank.  You have to have your business account set up with
a bank that can do international wires.  Look for that when choosing a bank.

The second is using a source broker.

A source broker is a company that already has relationships with certain international or foreign
companies.  Some have separate offices already set up in particular countries of choice.  Most of
their web pages explain their areas of specialty.  I have a certain individual who I like to use for
tools and wooden items in China.  www.professionalsources.com


Professional sourcing companies can make your life easier.  They do all the research, they make
the arrangements and they can get better prices, especially if they have an office in that country.
They also can help you manufacture items in different countries if you have a good idea and want
to get something made abroad.  Keep in mind they do work for a fee.  A lot of times they will
incorporate their fee into your order or send you a separate bill.  They are experts and I think
they are well worth the money.  They can do all the detail work and make sure your shipment
makes it to correct port without you having to stress over the details or make mistakes concerning
international banking.

I highly recommend this route.  Put international sourcing into your search engine and it will return
a host of information for you to devour.  If you’re looking for a particular item and can’t find it, a
source broker becomes very handy.  Usually they will find your item and then either charge you
for the name or contact the company for you.  Each company has their own method of business.  
Mine will either let you contact the company personally or represent you through the whole
ordering process.
Purchasing

Here is where we start, five items to consider.

1.        Purchase price
2.        Duty or tariff on item (customs)
3.        Dock fee
4.        Transportation company
5.        Relocation





1.        First of all, the purchase price of the item is what it costs.  Believe it or not they are not the same for all everyone.  Let’s
say I want to buy a plastic widget from Vietnam.  I contact the company, develop a business rapport, review the product, ask a
ton of questions and get a quote.  Almost always you have to buy the item in large quantity.  If you’re smart, you will purchase by
the container load. (20 to 40 feet).

Warning this next sentence is highly controversial and subject to individual opinion!  Proceed with caution.

When I buy from china or Vietnam it makes my brother laugh.  First of all I get what we call Caucasian prices.  That means I am a
small company in the USA and I am Caucasian, not Chinese or Vietnamese.  If I were the respective nationality I would get a
better price.  My brother employs a Vietnamese person that does his buying for him.  He puts him on a plane and sends him to
Viet Nam and whom do you think gets the better price?  Not me, but that is ok.  Still there is money to be made given some
thought. (I told you this was controversial)


2.        Secondly you have to pay a duty on the item before customs will release your shipment to you.  Hey it’s the law and you’re
at their mercy.  Look up www.uscustoms.com for some guidance.  You need to figure the duty price into the purchase price in
order to determine what it will really cost you.


3.        Dock Fees
You have to pay someone to take your shipment off the ship.  It does not magically happen and someone is there to take
advantage of that situation.  They provide a service and you need to figure it into the cost of doing business.  How much?  It
varies per size of your shipment.   Plan on spending some extra money.  Also bring a check with your company name on it.  
Shipping companies have this aversion to personal checks and cringe at the thought of cash. (you figure that out)


4.        Transportation fees

When your box or container gets off the ship it has to go somewhere.  You can’t pick it up at most shipyards.  Enter the shipping
company.  A company comes and whisks your goods away to their warehouse for you to pickup.  Hey guess what?  It’s not free.  
In fact I found this to be the most expensive part of the process.  You’re at their mercy and they usually are not the friendliest of
people.  Depending on what part of the country you’re in, they are not usually in the best areas either.  I surround myself with
large trucker driver type friends when picking up shipments.  They charge a handling fee to move your freight onto your truck.  
Usually your items will be shipped on a pallet and they will forklift them onto your truck.  I will break down a list of a sample
shipment I made.  Make sure you ask them what the handling charge is before you pick up the shipment so you’re not surprised.  
Again make sure you use a company check, eyebrows will rise if you try to pay in cash or that dreaded personal check.  I
suggest you try to get to know someone to make things smoother in the future (you figure that out)


Very important  

You are not allowed to open your box, crates, containers, or pallets in the warehouse.  I once thought I could remove the
contents of MY crate and load it into my van then take the crate apart and take it with me.  They have all the angles figured out.  
They will not let you and if you insist they will charge you a big fee.  Again it’s kind of a tough man’s world.

5.  Relocation.  


If you have a large shipment, you have to have a way to get it home or to your business.  You can rent a large Uhaul to fit some
shipments but you may need a semi truck.  You can rent a trucking company to pick up a large shipment but you need to get
quotes on that since prices vary.  I like the idea of paying friends to drive an Uhaul and pick up the stuff.  If you have a friend who
is a truck driver, that’s even better.  I would rather pay my friends than pay someone else, but that is my personal preference.  
Also if your working out of your home, consider where you will store all your newly acquired goods.  Personal storage is a cheap
alternative to cluttering the garage.


Freight Forwarders

I would have to say if you’re thinking about doing any kind of importing its best to find freight forwarder.  A freight forwarder is a
company that handles all the shipping costs for you.  When you find a foreign product you like and negotiate the price, you hand
it to the freight company.  They arrange the shipping and the pickup.  Better yet, they pick up from the dock and bypass the
whole warehouse thing. (if you order by the container only)  They are well worth the money when it comes to not having a
headache.  If you’re not near a port they are invaluable.  Try and pick a company that has an office in your town.   You can get a
cheaper rate since they drive through you town already.

The beauty of the freight forwarder is that they also handle customs for you.  This takes another step out of the way for you.  I
use to handle customs myself.  The wheels of the government turn very slowly and it’s no different for the customs department.  
Everyone is wary, since so many illegal things come into the country misrepresented.  Be honest and let anyone look at your
items if requested.
Word to the wise; if customs opens your crate, or pallet, make sure they have properly reattached lids, shrink wrap or nails.  I
had a custom agent inspect a crate of parts and not nail the lid back on.  I saw the crate but did not check the lid.  Guess what
came flying off my open trailer?

A small shipment dilemma

I once ordered two band saws from china.  One to test out to see if I liked the quality and one to sell. This is I did to test the
market.  Here is how it worked out.

Purchase price        $106 each, $212 total
Shipping                $95 (manufacture)
Dock                        $50
Duty                        $18
Warehouse                $115
Relocation                $20

Total                         $510

That’s about $255 per saw.  I can buy a new one retail for $300.  Is it worth it?  For two saws, I would have to say no.  For 100
saws I would say yes.  This does not mean that the warehouse fee is proportional to the number of units you have.  However I
would have probably paid the same $115 for 50 saws, which brings down your purchase price.  Also I could bypass the
warehouse fee if I used a freight forwarder but would have to add their fee as well.  This is a somewhat negative example.  The
goal of it is to make sure you take all the elements into account and do good math.



Sources

How do you know what to buy overseas or what to buy here in the USA?  Well I always start with the item.  If its American made
and the manufacture will let me become a distributor, then chances are I will buy it through them.  If the prices for parts of an item
(see router table example) are so high here in the states, I may look overseas.  The real savings is in buying goods that are
labor intensive to make and buying in quantity.  Even designing parts or items overseas can be profitable.  Keep in mind you just
can’t go on down to the manufacture and see how your production of widgets is going.  Plan on doing a lot of emailing.  Most
foreign companies like drawings as well as samples.  I try to make something out of wood as a sample to send to them as well as
include drawings or digital photos.  

Another good way to find out if a product you’re interested in will work for you is to buy a sample.  Most foreign companies will
ship you by air (expensive and at your expense) a sample to peruse.  If the sample meets your expectation, you can order
more.    Shipping larger items by air is very expensive and might not work for you.  I recommend opening a DHL Shipping
account.  Having your DHL account number handy when arranging shipping, it makes you look professional. (www.DHL.com)
With DHL you have to talk to a person to set up an account, you cannot do it online (as of this printing)  

Here is a list of valuable web sites to look at when planning on importing.  I also recommend the book Export Import by Zolde.  It
happens to be available at www.amazon.com for $13.29 (as of this printing) this has far more resources than I could ever want to
go into.

1.        www.asiansources.com
2.        www.madeinchina.com
3.        www.azteccontainer.com
4.        www.containershipping.com


When you order something, plan on your money being tied up for about three months.  Generally you will want to have your
items shipped by sea because it’s cheaper.  It also takes about 30 days to get here.  Most companies also have a lead-time in
which they need to process your order.  Some are between 30 and 45 days depending on the item.  If you’re having something
designed, it could take longer.  If the item is one of their regular products it can be shorter.
The process definitely takes longer but can have long-term results.  If you have the funds to buy in larger quantities, and are
able to store the goods, you definitely can make a living.  The key is doing your homework.  Hopefully this section has spurred
your mind on to investigating your own ideas.
It's easier than you think

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