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Selling your products (Ebay / Amazon)

So you received your goods, everything went well, and you are ready to sell.

A very popular way of selling your goods from China these days is FBA (Fulfillment by Amazon) or fulfillment centers that cater to eBay or any online store that you sell on (e.g., Shopify).

 

I have written another book (available on Amazon here) but also available within the course & members area of my blog:

 

http://importdojo.com/importdojo-masterclass/

 

In our Master-class you get access to:

 

1) The Import Bible – a 65 pages ebook covering the essentials when starting out importing from China

 

2) The Professional Import Bible

– 70 New Pages Full of Essential Sourcing Knowledge

– 5 hours of Video lessons

– 2 hour video screencast on how I work on Alibaba, calculate shipping and duties and a lot more!

 

The first Import Bible showed you the basics of how to source in 64 pages full of straight forward, practical advice. The professional edition adds over 130 new pages as well as 5 hours of video lessons to this and is constantly updated whenever things change.

 

3) Business in China

– 50 new pages on Business in China. Taking your import to the next level when you visit China and talk to factories directly.

– 2 hours of video lessons 

 

4) Our private forum & community – Get my advice and help or chat with other importers, FBA sellers from all around the world.

 

5) The Amazon FBA – Bible

 

The complete entry guide to successful selling on Amazon using importing from China to ship inventory (Fulfillment by Amazon – FBA) a 60+ pages ebook on successful selling on Amazon

 

 

Check it out here:

http://importdojo.com/importdojo-masterclass/

 

The book only is also available on Amazon here:

http://www.amazon.com/gp/product/B0141IEOR6?*Version*=1&*entries*=0

 

If you are not selling on Amazon here are a few more ways to set up your e-commerce store:

 

http://www.worldfirst.com/uk/blog/selling-online/ecommerce-fulfilment-process-top-tips/

 

Shopify is a great way of getting your products out there:

http://www.shopify.com/ecommerce-plugins/shipping-and-fulfillment

 

They also provide a lot of links to fulfillment centers:

http://apps.shopify.com/categories/shipping?filter=newest

This concludes the first part of the e-book.

Don’t be scared of what may seem to be a lengthy process. Once you have mastered the important steps what you need to focus on comes naturally and the rest will be like a walk in the park.

These steps should help you to cover every aspect of importing goods to your home country.

For any questions or follow up that you might have please contact us at manuel@mandarin-gear.com or through our website: http://importdojo.com/

We also provide sourcing services for “first-timers” or even experienced buyers who would like to take their import business to the next step. Please contact us at manuel@mandarin-gear.com or through our website: www.mandarin-gear.com

 

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returns

Claims and compensation

Ok, so your received goods are damaged, the wrong plug is attached, or the goods are returned from your customer for not functioning or other reasons. This is a bit tricky.

I use this following tactic only when it’s absolutely the manufacturer’s fault. If I also made a mistake perhaps on the order sheet or not having stated something clearly I will go mild on him and try to settle for compensation rather than a claim.

Collect all information on returned or damaged items. Document with photos, emails, and reports from your customers.

Start by calculating your loss incurred due to broken/damaged items and incurred loss due to loss of sales. Take this desired figure and add 20%.

Why 20%? Because the supplier will probably only offer you 50% of your total claim in his first response. Hopefully you can settle on the 100% (without your fictitious 20%)

Send a combined and detailed report to the supplier and state your claim with the desired amount.

If it is a new supplier he will probably try to wriggle himself out.
But if you have actual proof there is nothing he can do – but he will try to pay as little of the claim as possible.

In many cases the supplier will offer a discount on your next order. This may be acceptable if you plan on reordering and the supplier is usually reliable with your other orders/shipments.

If you do not plan on reordering from this factory you may as well demand compensation right away. I would not go as far as to threaten the supplier, but daily calls and emails will definitely help if he is stubborn on compensation.

You may also contact me and I can help communicate with the supplier (manuel@mandarin-gear.com)

Eventually, you will hopefully settle for the actual desired amount.

Another option is, if you have actually done an inspection by a third party and the report of this inspection shows no problems on the production or that particular problem you can actually claim money from the third-party. But you will need substantial proof, same as with the supplier. This can be done in addition to the claim to the factory to get the maximum compensation for your occurred loss.

There are also a few legal options if you are within your rights. You might want to get in touch with an expat lawyer within China or a lawyer based in your home country.

Some suppliers have product liability insurance (http://en.wikipedia.org/wiki/Product_liability), which covers the loss due to a a problem with their products.

If you are importing large quantities regularly I also recommend you look into this with your trusted insurance company. There are a few within China/Hong Kong that provide this service if you don’t find anything within your home country. For example, HSBC ,which is the largest bank within Asia that most suppliers use.

 

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Receiving your order

Once you have paid all necessary customs taxes and duties your order should be received within your warehouse/facility.

Upon receipt, check the contents of all goods. If you ordered a large amount of pieces this should be done professionally by a fulfillment center/company.

Check the content of goods and open a few boxes to make sure you received the right items.

If anything is not as you ordered look at http://importdojo.com/claims-and-compensation/

Your products are ready to sell!

 

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Logistics – getting your order

You have prearranged with your own or the supplier’s logistics provider for pick-up and delivery. Here are your options on forms of delivery.

 

SEA SHIPMENT

 

The supplier has released the goods and sent the shipping documents to your logistics provider. It’s now time to contact your logistics provider to arrange the shipment.

 

For most cases these are the documents that you need to provide to your logistics company:

 

For example, in the US:

The US does not require an import license for most items.

You need:

  • Customs Bond
  • Customs Broker
  • ISF / HBL / Bill of Landing
  • Packing List
  • Commercial Invoice w/ Harmonized Tariff Codes
  • Shipment advice

 

For example, in Europe:

 

  • Commercial Invoice
  • Packing List
  • Certificate of Origin (sometimes)
  • Bill of Lading
  • Declaration of Conformity (EC-DOC)
  • Shipment Advice

 

As previously mentioned, you should arrange details before placing an order to the factory so that you know the logistics provider has space for you on the container ship for your desired shipment date.

 

Your logistics provider will guide you through all necessary steps and will advise you when your order will be received at the destination.

 

The general lead-time for shipment from the factory to your warehouse is around 35-40 days. Keep this in mind when planning promotions or sales.

 

We also provide a few examples of shipping documents under

http://importdojo.com/docs/supporting_docs.zip

Time to wait for your goods.

 

AIR-SHIPMENT

 

Sometimes it makes sense to air-ship the whole lot, but only if your order is not large in terms of quantity and weight. Prices can quickly go up twenty-fold compared to sea-shipment.

Sure, you get your goods probably within a week but you might end up losing all your profit margin on the logistics.

 

Contact your provider on this option. He will guide you through all necessary documentation.

 

Shipping by air via mail can be another option. But remember that parcels might get lost due to no-tracking availability and long shipping times. See more under the chapter “ALIEXPRESS.”

 

Time to wait for your goods.

 

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Arranging the inspection

There are several third-party inspection companies in Asia.
Some of the big names are: Buereau Veritas, TUV-SUD, TUV-RHEINLAND, and AsiaInspection to name a few. The first three are usually expensive but also very thorough. AsiaInspection is a simple and cost efficient service that should work in the beginning for you.

Register on their website and simply create an order with them. You can fill out all the details or even better ask your supplier to send them a sample. With this sample they will later go to the factory on the inspection date and compare the actual sample with the production units.

Once the inspection is completed they will send you an inspection report. Based on this report you can either:

– Release the shipment to the supplier


– Ask the supplier to re-work the goods according to your agreed terms and fix problems found during the inspection

Only when you are entirely satisfied should you release the shipment. In most cases there will be minor findings, such as scratches, dents, or packaging issues. If this doesn’t bother you then release. If there are major problems like faulty wires or wrong colors, ask your supplier to re-work the goods.

Trust me, he will re-work, as he is still waiting to get the full payment. Remember, NEVER pay everything up front.

Once everything is as it should be you can give your logistics provider the order to pick up the goods and send them to the port.

Here are a few pages on what an inspection report might look like:

You are of course entitled to skip this process, but it is highly recommended, especially for first-timers and for order amounts above 2,000USD.

Here is a sample Video of an Inspection from AsiaInspection:

https://www.youtube.com/watch?feature=player_embedded&v=kt04K8HnFu8

 

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Checklist

Monitoring your order

This is VITAL. You cannot just place the order and sit back and relax.

Make sure you keep in communication with the supplier. It doesn’t need to be on a daily basis but it wouldn’t hurt to check on the status once a week, especially if you are in the process of arranging the inspection or shipment date with your inspection company/logistics provider.

Unfortunately, the suppliers get a lot of orders so some smaller orders may be given less priority. Keep reminding him of the deadlines that you have set out.

It is common that a few parts of the order, such as the shipping mark on the export carton, packaging, etc., are discussed AFTER order placement.

That doesn’t mean you don’t need to prepare for everything on your side before order placement. But it will save you time having the instructions for the supplier ready before order placement.

It wouldn’t make much sense to flood the supplier at order placement with all information, but the essentials need to be covered. Essentials are mentioned in the previous chapter.

Make yourself a CHECKLIST (we provide a simple check-list underhttp://importdojo.com/docs/supporting_docs.zip
Mark things complete or chase the supplier when things are dangling in the air. See above in Chapter 22 for an example of a check list.

 

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Receiving your PI (pro-forma invoice)

The supplier should send you his invoice now. Pay attention to all details especially the following:

  • Unit price
  • Quantity
  • Payment Terms
  • Shipment
  • Order number

If anything is unclear, check with your supplier and make sure that everything discussed previously is stated on your pro-forma Invoice.

See example PI’s here: http://importdojo.com/docs/supporting_docs.zip

 

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CNY

Placing the order – the essentials

You are ready to place the order. Make sure all details in previous sections are clear.

  • Inform the supplier within your order that you will perform an inspection. The costs are on you but if any re-work is necessary another inspection will be on his account.
  • Price and article number (including any color reference)
  • Shipment Date
  • Payment Terms
  • Inspection Date
  • Logistics Provider
  • If possible attach a product picture
  • Instruction on labels, markings on the carton
  • Instructions for Destination Address (your address)
  • Export carton markings
  • Rating labels

Place your order and wait for the supplier’s confirmation or PI (pro-forma invoice)

 

Pay attention to public holidays in China. These can seriously affect your order and shipment. Here are seven main holidays in China where most of the factories are off (excerpt from Wikipedia):

 

Date English name Pinyin Dates (2014) [2]
January 1 New Year Yuándàn Wed 1 January
1st day of 1st lunar month Chinese New Year[3] Chūnjié Fri 31 January – Thu 6 February[4]
5th solar term (April 4 or April 5) Qingming Festival Qīngmíng jié Mon 7 April[5]
May 1 Labour Day Láodòng jié Thu 1-Sat 3 May[6]
5th day of 5th lunar month Dragon Boat Festival Duānwǔ jié Mon 2 June [7]
15th day of 8th lunar month Mid-Autumn Festival Zhōngqiū jié Mon 8 September[7]
October 1 National Day Guóqìng jié Wed 1-Tue 7 October[8]

 

 

The period with most holidays is the Chinese New Year. Some factories close up to 4 weeks, which means that your order is in a long queue before and after the Chinese New Year. Try to ship goods out before Chinese New Year.

 

The general lead-time for shipment from the day of order placement, to shipping, to goods arriving at your warehouse is around 90 days.

 

Here is a breakdown on why:

  • Order placement and administrative clarification (labels, packaging, etc.): 5 days
  • Purchase of raw material: 20-30 days
  • Arrangement of production: 10 days
  • Start of production until shipment: 5-10 days
  • Shipment (goods at sea): 30 days
  • Customs clearance and transport to warehouse: 5-10 days

 

Keep this in mind when planning promotions or sales.

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paypal

Payment options

If you are buying through Alibaba use the escrow service. If you have met the supplier outside of Alibaba I recommend either going with a letter of credit (L/C at sight) or with a 20-30% down payment by telegraphic transfer (TT).

We also cover all other payment options under the chapter “ALIBABA.”

My recommendation for a first-time importer would be TT payment with a 30% down payment, and the rest after you have received the copy of the shipment documents. This option is generally safe and should be used for any amount from 1,000-20,000USD.

If you have a large order above 20,000USD I recommend the option L/C. This is safe for both sides as you only pay once the supplier has shipped all goods. On the other hand a supplier can use the copy of your L/C draft (the bank will send you this draft) to purchase raw material so he can get going and has his production costs covered. Once you release the shipment the bank will release the funds from the L/C to the supplier’s bank.
For smaller amounts I would go with either PayPal or Western Union.

If in doubt about your supplier’s credibility or if he insists on 100% upfront payment STAY AWAY. It is not a good sign if he wants payment upfront. He may be in financial trouble or he might end up scamming you out of your money. Again, any supplier will agree with 30% down payment or L/C.

 

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Negotiation

It is a given that once you place your order you negotiate the price.
No matter if you are below the supplier’s MOQ or not. You are now ready to place the order and you let the supplier know your terms.

Use the price that you were originally quoted and decrease it by 20%. Give this target price to the factory and let him know you would like to order with your (20% reduced) price. In many cases the supplier may not agree to your new target price but he may reduce it another 5%.

In 80% of the cases he will give you a further reduction on his original quoted price, unless your quantity is really very low.

Also mention to him that this will be the first trial order and that if it is successful larger orders will follow.

Once your price is negotiated you are ready to send your PO.
This could be an informal text in an email with all details or a Word/PDF file that you have created. We will supply a blank pro forma Order in this course.

I will update more soon on a few “advanced negotiation skills” on here.

 

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