Sourcing Product from China and Importing

Q: I would love to be able to order products directly from the overseas manufacturers, especially in China, but I'm afraid I don't have the skills to handle the negotiations myself. Is there any place that can help me make contact with manufacturers and help put the deals together?

A: If you are new to importing and don't have any import experience, your best resource for sourcing product from China or elsewhere in Asia is Worldwide Brands Inc., based in Orlando, Florida (worldwidebrands.com). Worldwide Brands offers you the ability through their OneSource database to purchase through direct import buyers. These are companies that set up warehouses within the United States to have the product imported from manufacturers in countries such as China. These companies handle all the importing arrangements, and you purchase directly from the distributor within the United States. This way, you don't have to be concerned about handling the import logistics or the manufacturer negotiations. For an excellent overview of the issues involved in importing from China, check out chinasuccessstories.com/ 2007/07/25/import-from-china-getting-started.

According to Peter Zapf, vice president of community development for Global Sources (globalsources.com), which helps global buyers find suppliers in China and works with Worldwide Brands, eBay sellers looking to source product directly from Asia should consider three services:

1. Global Sources Direct (GlobalSourcesDirect.com): This is an online wholesale site offering product directly from China. That is, you go to the site, select the products you want, put them in your shopping cart, and they are shipped to you via air courier from China so you receive them within ten days. Minimum order quantity is relatively small, at one carton. Global Sources Direct is also listed in the Worldwide Brands database. According to Zapf, it's the easiest way to access China-manufactured products, because you don't deal with suppliers, quality control, or logistics. Global Sources Direct handles all that for you.

2. Global Sources (GlobalSources.com): This website provides a directory of suppliers. Verified suppliers have been physically visited three times or more by Global Sources. You can search for products and suppliers and also work with them directly. The verified suppliers list hundreds of thousands of products in a wide range of categories. Examples of just some of the products are digital photo frames, all-terrain vehicles (ATVs), handbags, and vacuum cleaners. According to Zapf, this site is great for folks who either have experience or want to build experience with the import process. Similar to their U.S. counterparts, Chinese manufacturers have varying minimum order quantity requirements, and you will need to contact suppliers to check on their minimum order quantities.

3. China Sourcing Fairs (ChinaSourcingFairs.com): Hosted by Global Sources, these trade shows have thousands of Chinese suppliers exhibiting their products. Everyone from big box retailers to eBay PowerSellers attend these shows in order to find and meet suppliers. The biggest shows are in Hong Kong and include:

• Electronics and components such as consumer electronics, digital entertainment, in-car electronics, computer and networking supplies, WiFi and VoIP products, health and personal care electronics, security and safety, electronic components, power supplies, and much more

• Fashion accessories such as handbags, jewelry, belts, hats, footwear, and sunglasses

• Underwear and swimwear, including related accessories

• Gifts and home products such as premiums, kitchen and household products, home décor, glassware, basketware, garden and outdoor products, stationery, sporting equipment, and leisure items

All you need to do is get on a plane and show up. There is no entry fee. According to Zapf, this is a great opportunity to network with other international buyers. In addition, Global Sources hosts a seminar at the show called "Buying from China: What New Buyers Need to Know." So if you are new to importing, you can learn about buying from China and also meet thousands of suppliers. Hey, it's tax deductible!

Many eBay sellers buy in small volumes (one hundred pieces or fewer). For these volumes, Zapf advises that eBay sellers may want to consider working with trading companies rather than buying direct from China. The advantage of a trading company is that it can act as an intermediary on your behalf and can often handle smaller minimum order quantities. However, Zapf points out, since the trading company hasn't actually manufactured the product, there is a longer chain to go through when getting information about the products.

Q: What if I want to get a product manufactured for me, rather than buying already manufactured products?

A: If you have product you'd like to get manufactured, there are a fair number of buyer agents that can help on your behalf, according to Zapf. There is a cost associated to working with them. They charge either a fixed fee, a percentage of the order, or a combination of both. Generally, order volumes need to reach US$20,000 or higher for their added cost to offset the savings of having goods manufactured in China, although this figure varies from product category to product category.

Many eBayers ask about purchasing products from China with Western trademarks or brands. The owners of these trademarks and brands control their distribution channels closely and don't try to create pricing structures that support cross-border sales. When buying goods from China with Western trademarks or brands, eBay sellers must be careful to ensure that the goods are not knockoffs or illegal overruns (the Chinese manufacturer received an order for ten thousand copies but actually made twenty thousand and didn't tell the Western company about it).

Another issue for eBay sellers sourcing their inventory from overseas is the so-called gray-market sale. Unlike fakes and knockoffs, gray-market goods are authentic products being sold by unauthorized resellers and/or authorized business partners of the manufacturer in violation of their distribution agreements—for example, by selling to unauthorized resellers or selling outside their authorized territories.

As a result, a fair number of the opportunities you see to purchase such products are, in fact, offering counterfeit products. Selling these will almost certainly get you kicked off eBay, as well as sued by the manufacturers of these products if they can prove you knowingly imported counterfeit or knockoff goods.

To avoid liability, Zapf says you can ask the seller for proof that they are an authorized distributor and you can check with the brand owner whether the seller is an authorized distributor. "When looking to buy from China, instead of looking for Western branded products, you should be looking either for a new and innovative product, for a well-priced unbranded product, or to have a product manufactured which you can put your own brand on," Zapf advises. Zapf also advises staying away from services that list or promote counterfeit products. Large volumes of these types of listings indicate a low-quality service—probably not the place you want to find your next trusted supplier.

 
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