Maybe you want to start doing business with China. If you make a profit by doing this, you must become an official entrepreneur by setting up a trade or company , or any other form.
Another thing to think about is that not every product can be sold on the western market. Most products have to be approved according to your countries standards and should contain a description in your language and you should provide a warranty to the seller. Equipping these things is often very costly.
Also, think that there are many products in China that are counterfeit or replicas of well-known brands. These goods are illegal, and if you choose to buy, you risk having them at the customs office, or other legal penalties.
Another drawback of shopping from China is that even if you can find products at super low prices compared to your market, after arriving, the final price may be significantly different, even higher than retail prices. You have to take into account that, besides postage, you can also pay dues. How much depends on the merchandise and rates can be found at the customs office or their website.
The final price of the goods depends on the type and volume of goods you buy. The less you buy, the higher the price. Most Chinese wholesaler has set some minimum sampling quantities under which you do not sell the goods. This is good on the one hand, because you will also save on it, but on the other hand, it is not good to buy a lot of goods from an unverified seller. But when you start shopping in small quantities, you have to count on the fact that the goods are a little bit overpriced.
Importing goods from China can sometimes be advantageous, but do not forget the above mentioned risks. Check out more important things if you want to know everything about importing from China.
We all know that China is the factory of the world, a place where you can find any kind. On the other hand, we are all aware of the risks of doing business with them. So is it really good idea to try and do business with some kind of supplier from China?
Challenges of doing business with China:
You have to know the disadvantages of the Chinese product in order to assess the profitability of the operation. Some of the most significant, in terms of costs and complexity of the process, are the following:
The cost of travel and travel to China. Often the cost may be too high to travel to and from China all of the time, especially if you want to try and manage your business by yourself.
Bank costs of the operation. This type of transaction is usually tried to ensure through methods such as the Letter of Credit , which entails more expenses than the simple transfer, for example.
Errors and omissions relating to parts of the processor its procedures. For example, tariffs. These can lead to high costs, both in penalties and in warehouse expenses, due to the delays that occur in the face of delivery deadlines.
The quality standards. A product whose manufacturing process and characteristics are perfectly legal and comply with all current regulations in China, may not be according to the laws of the country of destination of that good.
The time difference. This is a variable that can slow down and hinder the entire negotiation process, especially in the early stages.
The slowness of the purchase process. Thanks to different aspects, such as the difficulty of negotiation due to language, several problems of trust and cultural differences can be revealed. It is important to know how to do business with Chinese companies.
Find reliable suppliers. There is great difficulty in knowing how to recognize legitimate suppliers from those that are not, in order to avoid being scammed.
Direct deal with the manufacturer. It is difficult to deal directly with the manufacturer, since normally, it is usual to negotiate with intermediaries or agents, even if Chinese is spoken.
The minimum order volume. It is usually quite large quantities. Generally, a cargo container is a minimum order.
The longer delivery times. Not only due to the transit time of the goods, but also due to the fact that in most cases it is made to order.
The difficulty of the process of transporting the goods to the place of destination and the formalities involved.
However, it is not all about the risks and disadvantages of doing business in China. There is one huge benefit to all of that risk. For example, you can save a lot of money if you choose to do business with a Chinese-based supplier. This is especially true if we compare it with that of a similar product in Europe or many other countries. If you want to do business and China and minimize all of the risks that are involved, you should strive and work towards finding a good supplier.