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How to import to the US for international sellers – ship to Amazon directly

Two of the questions I receive the most is: “Can I sell on Amazon US as an international seller” and “Can I send my order directly from the factory directly to Amazon?

Yes you can!

This prompted me to do a write up on the topic and without further ado, here’s a quick guide for you that hopefully answers your questions:
You basically have four options:

  1. Using a customs broker acting as the ultimate consignee (No EIN needed)
  2. Using a courier service like DHL/UPS/FedEx etc. (Amazon’s EIN recommended)
  3. Using a prepping and forwarding company that acts as the ultimate consignee (NO EIN needed)
  4. Using a forwarding company/customs broker when delivery by regular Air or Sea shipment (not by courier) and acting as the Importer of record and ultimate consignee yourself (Amazon’s EIN needed)

In all cases I still recommend you to get your own US Tax Payer Number or also commonly referred as EIN.

Simply follow this link for information and call the number mentioned under “Apply by Telephone – International Applicants”. It’s a very simple and straightforward process that takes about 10-15 minutes.

https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN

Some important reminders:

1) Not all customs brokers can act as the ultimate consignee. The ones that do usually offer services on top to act as your ultimate consignee:

2) Very Important: Never put Amazon as Importer of Record on any document. In case you send goods directly to Amazon only use them as the ultimate consignee but never as the Importer of Record otherwise they will definitely reject your shipment.

3) One thing that is super important if you decide to send products from China to Amazon without any stop in between (Prepping, Labelling or Quality Control company in the US):

HAVE AN INSPECTION. I can’t stress enough how important it is to have an inspection before sending anything to Amazon directly.

I know that many buyers have an inspection in the US. But what if the goods are defect to such an extent that you can’t rework them in the US? Are you going to send them back to China? Unlikely.

Save yourself this step and have the inspection in China with a reputable Inspection company like http://www.asiainspection.com

If there’s anything wrong during the inspections you can still have them re-worked in the factory directly.
On top of that you protect your initial deposit to the factory by having an inspection.

4) Also make sure you comply with Amazon’s packaging and labeling requirements (weights, labeling & carton measurements). Amazon’s fulfillment centers prefer palletised shipments but you do have an option to send the shipment un-palletised. There will be an option in Seller Central when you create your shipment that allows you to choose the option of un-palletised shipments.

 

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5) Do as much labelling and prepping in the factory as possible!

Your factory can take care of all the labels and prepping needed for Amazon, you simply need to give them clear instructions when you place your order.

 

6) Think hard about “inventory placement” that lets you ship from China to one Amazon warehouse only.

This costs 0.3$ on top of the product cost but it might be worth it considering that you only have to invoice once. On top of that shipping companies charge extra for each set of documents on various levels and it is complicated to instruct your supplier to ship to 2-3 different warehouses. Think about all the labelling and coordination that has to be done with the supplier. However if you ship to multiple Amazon warehouses, have each order palletised for each warehouse while in China, so that you’re not using U.S. labor to de-consolidate a shipment and re-palletise goods.  You’ll also have to book the ground shipments after your ocean shipment has arrived, which adds complexity to the process

Lets look at each option in detail:

1) Using a customs broker acting as the ultimate consignee

There are several companies in the US that can act as your customs broker and ultimate consignee. If they offer to be a ultimate consignee they usually add a few services on top that they are looking to sell to you such as:

  • Clearing customs
  • Receiving cartons (LCL, LTL or UPS/DHL etc.)
  • Apply shipping labels
  • Ship to Amazon
  • etc.

This can add up in costs on top of your product but they’ll make sure that items are properly packed, labelled and cleared by customs as an ultimate consignee.

I’ve been contacted by http://www.westernoverseas.com a Third-Party Logistics (3PL)/Prepping/Customs Brokerage company based in the US and they had such a detailed process lay down in PDF that I decided to post them (with permission). Credit of the following content goes to Westernoverseas however please note the entire process is the same for other 3PL companies as well.

Why do I need a Customs Broker?

If your shipment is arriving by Regular Air Cargo (not by DHL, UPS, or FEDEX) or Ocean cargo, you will need a Customs Broker to clear the shipment on your behalf. All shipments must be cleared through Customs. Certain commodities are also subject to the regulations of other government agencies such as FDA, USDA, DOT and EPA. Please check with your Customs Broker for import requirements. Please do not ship without doing your research!

What type of Services does Western Overseas offer?

  • International Freight Forwarding (Shipping) – by Air and Sea
  • Customs Brokerage
  • Domestic Delivery from port to final US destination
  • Amazon FBA prepping
  • Warehousing

Should I use Ocean or Air Shipping?

Your decision should be based on how quickly you need your shipment and how much you’re willing to pay.

  • Ocean shipments are less expensive but take longer to arrive. The costs are generally 1/2 – 1/3 the costs to ship by air. You should figure approximately 3 – 4 weeks’ lead time.
  • Air shipments are more expensive but are faster to arrive. You should figure approximately 3 – 5 days’ lead time.

If I choose Western Overseas as a Customs Broker, how do I open an account? Is there a fee?

There are several forms that you must complete to set up an account. Please contact us at Ecommerce@westernoverseas.com. We do not charge a fee. However, we may charge for a consultation fee if extensive research on your product is necessary.

What is an EIN Number? Do I need one?

As a foreign importer, you do not need an EIN number for Customs Import purposes. You may need one as a seller on Amazon for State Tax purposes. Please check with Amazon and/or the Internal Revenue Service (IRS). You will be assigned an Importer Number by customs which will be used in lieu of an EIN Number for the purpose of the Customs declaration. You can be an importer without an EIN#. Customs will assign to you an Importer Number.

But you still need a Customs Broker and an Ultimate Consignee with an EIN#. If you use our FBA Prep Services, we will act as your Ultimate Consignee.
If you are U.S. based and are intending to import under a Corporation, then your EIN number will serve as your Importer Number. If you are U.S. based and are intending to import as a Sole Proprietor (e.g. John Doe dba ABC Importers), then your Social Security Number will be your Importer Number. If you are U.S. based and are intending to import as an Individual (e.g. John Allen Doe), then your Social Security Number will be your Importer Number.

What is a Customs Bond and what is the cost?

Customs requires that a bond be posted with every ISF and Customs Entry to ensure that all duties, taxes and fees owed to the federal government will be paid. An Annual Continuous Bond can be purchased for $500 (through Western Overseas) and it will cover both your ISF filings and Customs Entries. Having a Continuous Bond also reduces our ISF filing fee by $25. If you choose not to purchase a Continuous Bond, you have the option of purchasing Single Entry Bonds for ISF filings and Customs entries. This can become quite costly especially if your shipment value is high or is subject to other government regulations such as FDA. Furthermore, the bonding companies only allow a maximum of “5” Single Entry Bonds for ISF before the importer is required to purchase a Continuous Bond. You would be saving money in the long run. However, if you are planning to import only once, then a Single Entry Bond might be for you. Single Entry Bonds are subject to a $25 Bond Processing Fee. Our Bond costs are below:

  • ISF Bond: $75
  • Customs Single Entry Bond: $6.50 per $1000 of the shipment’s declared value + duties/taxes (minimum charge of $65). For OGA (other government agency – i.e. FDA, USDA) regulated commodities, the rate is $6.50 per $3000 of the shipment’s declared value + duties/taxes.
  • Customs Annual Bond: $500

What happens after I place an order with my supplier?

The process will depend on the terms of sale between you and your supplier. But the following steps are what typically occur for Regular Air and Ocean shipments. The below excludes shipments sent by Air Express Courier.

  • Production begins (seller might send you a sample for approval)
  • Determine if you will be using the services of an inspection intermediary service such as FBA Inspection, Earth Class Mail or Western Overseas.
  • Seller arranges the International Freight Forwarding if his cost includes this (CIF terms); if his cost does not include this, then you are responsible for arranging and paying for the freight.
  • Your supplier may have a couple of shipping companies to refer you to or you can obtain a quote from Western Overseas. If the latter, seller will provide you with the cargo details which you will pass onto the forwarder giving you the quote. You will also want to include the U.S. destination address – whether it’s Amazon FBA or the Intermediary Inspection service of your choice.
  • Hire a Customs Broker if separate from the Freight Forwarder.
  • Get ISF details to Customs Broker (ocean shipments only)
  • Shipment departs
  • Send copies of all shipping documents to Customs Broker
  • Shipment arrives
  • Customs clears
  • Our invoice is paid
  • Shipment is delivered or dispatched

It is your responsibility as an Amazon Seller and Importer to know Amazon’s FBA requirements.

What is Importer Security Filing (ISF)?

There are 10 key elements about a shipment that must be transmitted to Customs at least 24 hours prior to the vessel’s departure from origin through Importer Security Filing (ISF). This filing provides information to Customs regarding the impending import shipment. Your Customs Broker is the most ideal party to handle this transaction. If the filing is late, misfiled or not filed at all, then the importer will be penalized a minimum of $5,000 (max $10,000). Customs requires that all ocean import shipments have an ISF filing whether or not it is late. Otherwise, your shipment will not clear Customs. A late filing or non-filing of ISF also guarantees that Customs will examine your shipment.

What is a Harmonized Tariff Code (HTS)?

The Harmonized Commodity Description and Coding System (HS) is the mechanism by which international tariffs are standardized. If you ship items overseas, you are required to classify them according to the harmonized system. Each country has its own Harmonized Tariff Schedule (HTS).

The description and coding system of global tariffs is an internationally standardized system of names and numbers for classifying products. The first 6 digits of any HTS Code is (in theory) the same for any country. Beyond the six-digit level, individual countries sometimes have different rules for classification. Importers and Exporters the world over must classify all goods moved across international borders using the Harmonized System of the country of import. Every item you sell must be assigned an HTS Code according to the Customs tariff schedule of the country from which you are selling. Each HTS Code has an applicable duty rate. HTS Codes are sometimes referred to as HS Codes and Tariff Codes.

What is the time length for my shipment to be cleared by Customs?

We must allow Customs at least 48-72 hours to clear a shipment, although it could be less.

Why did Customs put a hold on my shipment? I have never had a problem with my DHL/UPS/FEDEX shipment before.

Please bear in mind that Air Express Shipments are treated differently by Customs. They simply move too many parcels on a daily basis for Customs to be able to monitor each one. And because Customs allows Air Express Couriers to clear an entire manifest under their own name and bond, it’s possible that your previous shipment may have just flown under the radar.

With regular Air and Ocean cargo, there is always the possibility of a Customs Exam which may cause a 3- 5 days delay in release. Any exam related charges will be the responsibility of the Importer of Record. Customs exams are generally random unless they have had a recurring problem with the manufacturer, the importer, and/or the commodity. That said, please ensure your product and its labeling comply with Customs laws prior to shipping.
What information do I need to provide Western Overseas to obtain a quote?

For a Customs Brokerage Quote:

  • A full description of the item(s) you are intending to import – i.e. General Description/Name of Product, Function, Material/Composition, Declared Value, Unit Value, & Country of Origin.

For a Freight/Shipping Quote:

  • Terms of Sale (i.e. FOB or Ex-Works)
  • Address of your Supplier
  • Port of Loading
  • Number of cartons
  • Dimensions of each carton
  • Weight of each carton
  • First U.S. Delivery address

For Amazon FBA Prepping Services Quote:

  • Total Number of Cartons and Units
  • A detailed scope of the services you require – i.e. Check for product and package damage, Apply FNSKU labels, Bundle, Insert Cards, etc.

What other fees should I expect?

If you using the International Freight Forwarding Services of another company, then you can expect charges due to their U.S. agent. Your shipment will not be released from custody until those charges are paid. Western Overseas can pay those charges on your behalf for a fee of 1.5% and include them on our final invoice. Other fees may include Customs Exam and related costs and Storage/Demurrage Fees.

Who should be listed as the Notify Party, Consignee, Ship To?
If we (Westernoverseas) are hired as your Customs Broker, we should always be listed as the Notify Party.

Western Overseas Corporation
510 Myrtle Ave. Ste 208
South San Francisco, CA 94080
Tel: (650) 952 – 2955
Email: Ecommerce@westernoverseas.com

If you are a U.S. based importer, the Consignee’s name and address will be your information. The Ship-to party will depend on who will be receiving your shipment immediately upon release from Customs.
If you are a foreign importer, the Consignee and Ship-to parties will depend on who will be receiving your shipment immediately upon release from Customs.

My supplier is asking for Shipping Marks. What are Shipping Marks?

Shipping Marks are printed on the outside of each Master Carton of your shipment. They should contain the information that will identify your cartons from cargo belonging to others. The suggested marks would be:

  • Your Company Name
  • Carton Count – e.g. Carton 1 of 10, Carton 2 of 10, etc.
  • General Description of item
  • Country of Origin
  • Any special handling instructions – e.g. This side up, Handle with Care, Fragile, etc.

What shipping documents do I need to provide to Western Overseas (or other 3PL)?

  • ISF Details (for Ocean shipments only; we must receive this at least 72 hours prior to the vessel’s departure from origin)
  • Ocean Bill of Lading or Air Waybill
  • Commercial Invoice
  • Packing List
  • The above documents are obtained from your supplier. If you use our Int’l Freight Forwarding services, then our overseas agent will supply us with the ISF details and the Ocean Bill of Lading.

When do I pay Western Overseas ((or other 3PL) and what type of payment is accepted?

Payment for an Annual Customs Bond will be due upon receipt. Payment for Customs Brokerage services including duties/taxes, delivery, freight, etc. will not be due until your shipment has cleared from Customs and is ready to be delivered or dispatched.

We accept the following payments:

  • Credit Card (Visa, MasterCard, American Express)*
  • Wire Transfer**
  • PayPal*

*subject to a processing fee

**full invoice amount is due without any deduction of your bank’s wiring fee
June 2015

—End of content from Westernoverseas—

 

 

If you are interested in their fees and other services here’s the contact information:

Susan Park
Business Development Specialist
Western Overseas Corporation
11605 Pike St.
Santa Fe Springs, CA 90670
Tel: (562) 985-0616 x5069
Direct: (714) 243-5069
Fax: (562) 364-7798
Email: Susanp@westernoverseas.com
Website: www.westernoverseas.com

2) Using a courier service like DHL, UPS, FedEx etc. (EIN recommended)

 

Air Express Courier shipments sent via DHL, FEDEX, or UPS are different. Customs has special regulations for them where they are allowed to clear entire mass quantities of shipments under their own name and Customs bond. They simply move too many parcels for Customs to be able to clear every single one. Therefore, they are authorized to clear shipments that are on one cargo manifest of low-risk up to values of their own discretion. They also won’t ask you to apply for a customs bond or filling an ISF. They provide a one-stop solution and are therefore more expensive than forwarding or logistics companies/customs brokers.

You simply be the Importer of Record with your foreign address or you can subscribe to services like http://www.usamail1.com/ to get an US address (not obligatory) and apply for an EIN here (obligatory if you want to be the ultimate consignee): https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN

 

3) Using a prepping and forwarding company that acts as the ultimate consignee (NO EIN needed)

 

There are several services around that receive your goods (where you act as the Importer of Record) after cleared by customs. For example if you send in your order by courier (DHL etc.) and then want them prepped, labeled etc. you can use prepping companies that can also act as your ultimate consignee. These guys are similar like the first example but usually don’t clear customs for you. You can act as the Importer of Record with a foreign address and will be assigned an Importer Number by customs. Once the prepping, labeling etc. is done these service provides will send in the order for you to Amazon.

4) Using a forwarding company/customs broker and acting as the Importer of Record yourself (Amazon’s EIN needed)

 

If you send items by Air or Sea the regular way (meaning no courier like DHL, UPS etc.) you will need a forwarding or also referred to as Third party logistics company (3PL) that can act as both the forwarder as well as the customs broker HOWEVER not as the ultimate consignee.

In this case you will be the Importer of Record and Amazon will be the Ultimate consignee. You don’t need an address or bank account in the US but you will need an EIN number of the ultimate consignee or Importer of Record. You can contact Amazon for this information but your Customs Broker should be able to obtain this information for you.

I also heard that sometimes Amazon refuses your goods if you don’t provide your own EIN but I haven’t found anything to the contrary.

You simply be the Importer of Record with your foreign address or you can subscribe to services like http://www.usamail1.com/ to get an US address (not obligatory) and apply for an EIN here (obligatory if you want to be the ultimate consignee): https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN

 

 

There’s one more option. If you know someone in the US who is willing to receive your order as the Importer of Record providing his EIN number you can go that way too. But I recommend you pay all fees upfront so your friend/acquaintance doesn’t have to bear them.

Miscellaneous:

I do recommend you to apply for an EIN for general tax reasons and to comply with IRS regulations. Amazon can track your sales tax back with you and your country of origin.

If you want to learn more about the process and import from China professionally please check out our ImportDojo Masterclass here:
http://importdojo.com/importdojo-masterclass/

I will be adding over 20 hours of new material to the class in February 2016 increasing the price in the process, so act soon.

Hope this helps and if you found this article helpful please share below trough social media :)
All the best and happy sourcing,
Manuel

sport dv

Alibaba Hacks: The most efficient way to find suppliers on the biggest sourcing website

Get some insights how to sort, filter and find suppliers in the most efficient way.

Watch the video for all details or read the article below to understand the process.

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Today you want to source for an action camera, similar to the GoPro cameras.

You can start by going to the main page of Alibaba.com and input “action camera” in the search option.

Screen Shot 2015-05-04 at 2.31.50 pm

Ok, so you found 106,946 products. At this point you want to filter your results for the most relevant suppliers. You will definitely want the suppliers to be:

Gold suppliers:

This is a paid membership from Alibaba for the supplier. They get featured and can put up a lot more items in their catalogue (among other functions).

Onsite Checked:

The onsite operation of the factory has been checked by Alibaba and a third party confirmed its legal existence.

Assessed suppliers:

This is a third-party assessment usually done through a testing company to verify various parts of the company. This includes machinery, staff, engineers, workers, certification, and much more.

After you have filtered for this you are down to 8,258 products:

Screen Shot 2015-05-04 at 2.32.26 pm

Insider tip:

Now you filter down to the relevant manufacturing province. Why? Because each province in China is specific for different product categories.

Read more

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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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calculator

Calculate your costs

This part makes or breaks your import. It is essential that you calculate all your costs into the product to make sure you can actually turn a profit.

Import duty can be calculated in different ways. I have a rule of thumb myself. I take the buying price from my supplier and add 20-30% on top, regardless on where I export it from (or import in your case). This gives me a rough idea on what my landing price will be. This rule applies to first world locations like the US, Europe, Hong Kong, and Singapore, for example. Many second or third world countries are not so open to importing and put a high percentage of duties and tax on top of import products to protect the local industry.

Many first world places even have 0% duties and tax to encourage importing. This applies especially to “green products” that are very sustainable and help reduce energy or waste. A good example is an LED bulb with 0% tax and duties. Of course you can check in detail through Customs Tariff Numbers (see above) or resources like www.dutycalculator.com

Lets look at an example:

My product is a Bluetooth speaker and I would like to import it into the US. First I calculate my shipping costs. I have the measurements of the product and also of the export cartons through the supplier’s quotation. I plan to ship 1,000 pieces.

I go onto http://worldfreightrates.com/ and calculate my shipping costs. It will cost me roughly 1,200USD.

Now, I go onto www.dutycalculator.com (first five checks free)

I input details such as country of manufacture, country of import, product category (this website has a nice and easy to use auto-complete), total product value, my estimated shipping cost, and insurance cost. Shipping cost is the rough estimation of 1000 pieces. Insurance is usually 1% of total product value.

I press calculate

 

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Here we go, I have all costs listed. Wow, only 10% landing costs (excluding shipping costs).

 

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Here is a breakdown:

Notes on duty and tax rates and compliance:

Bluetooth speaker has an import duty rate of 4.9% . Restrictions may apply for shipping this product with courier or postal companies (some probability).

Packaging and labeling requirements apply to lithium batteries whether they are contained in the equipment or sent separately from the device. Please, contact your courier for more information.

Notes on import taxes due:

For imports with FOB value exceeding 2500USD, a merchandise processing fee of 0.3464% of the FOB value applies, with a minimum of 25USD and maximum of 485USD.
Please note that your shipping provider may add an additional handling fee.

 

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 So essentially I have the following import costs:

  • 1200USD Shipping
  • ~100USD Insurance
  • 10,000USD Product value
  • 1,774.64USD Customs & duties
  • TOTAL: 13,074.64 USD

That leaves me with almost exactly 30% costs on top of all my product costs. Pretty much within my “rule of thumb of 30%.”That’s 13USD per item (we have 1,000 pcs). That gives me a great span for margin. I know that the selected Bluetooth speaker is sold for around 49USD.Obviously I have to calculate my domestic shipping and storage or fulfillment costs on top but I should have a fair margin that I can sell this product with.I calculate another 8% for fulfillment by Amazon plus another 10% storage and packing costs. I end up with 15.34USD on the item. To be safe I round up to 16USD. That gives me a potential margin of 33USD per item (49USD minus 16USD). Total sales if I sell everything would amount to 49,000USD.In other words after I have deducted all my costs and investment I have the potential to make a gross profit of 33,000USD. I could take that 33,000USD and invest in my next project and build an even larger product portfolio. Not bad I would say.If you aren’t sure about logistic or duty costs you may also contact your logistics provider. We explain this in the next step.

 

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preparing my items for drop-shipment

Advantages and disadvantages of drop-shipping (e.g. Aliexpress)

AliExpress.com is one of the most used marketplaces in the world. This will be your new favorite channel for B2C and ordering small quantities from suppliers in China. AliExpress.com is part of Alibaba.com, which is also the biggest B2B (business to business) company. They have more than 20 product categories, which include electronics, cell phones, automotive accessories, clothing, jewelry, and other items.

I recommend this option ONLY if you have small order quantities and want to test the water.

Bear in mind that these items are usually stock from the supplier that they sell on Alibaba’s marketplace (Aliexpress). Be careful, as many of those items are returned goods from the manufacturer’s other customers, faulty items, or over- produced items from another customer’s order. In the last case it can easily be an order from some trading company in Thailand and the instruction manual as well as the packaging could be in Thai.

Be sure to check all these details before you place an order to a manufacturer.

In most cases the companies offering the products on Aliexpress are trading companies that buy stock from the manufacturer and sell online.

The prices can be 30-70% more than if you mass produce with the manufacturer. But again it’s a great option if you want to order 5-10 pieces of an item to test the waters.

Here is a rough overview of Aliexpress:

A) Quality of products

You have no way of knowing. Again, these are items that the supplier has in stock. You don’t know what’s inside and you can’t inspect the goods. On a bulk order with a factory you would always install an inspection measurement before shipment. With Aliexpress you have no way of knowing what you are actually getting. If you buy from Aliexpress make sure you use a seller with great reviews and lots of sales. Ask him to send pictures of the product taken out of the gift box, the gift box itself, and the instruction manual that comes with it.

B) Payment Options 

AliExpress.com offers a safe and secure payment option through escrow. Both the buyer and the seller are protected. AliPay (also an Alibaba company)

holds the escrow payment. The payment is released to the seller once the transaction is completed. Should there be any disputes or problems, the third party (AliPay in this case) will negotiate between the two parties.

AliPay acts completely neutral and does not favor either party, so you can be sure it is a fair negotiation.

One more benefit of using escrow as payment is you do not have to divulge your credit card number, and in the event that you are not satisfied with the delivered items, you can negotiation the price.

This escrow service is initiated via credit card, Western Union, bank transfer or through other online payment processors. Some suppliers differ from each other on that.

C) Shipment methods

AliExpress.com provides free shipping worldwide. They joined hands with the China Post Mail to provide free shipping worldwide to accommodate smaller orders, especially electronic items. AliExpress.com launched Fulfillment by AliExpress, which is designed to accommodate medium orders so that they can have free shipment like bulk orders. This will allow importers at least 30% savings on the shipping costs. However, shipment can be as long as 30-60 days in some cases and there will be no tracking number provided. Shipments could get lost.

AliExpress.com supports DHL, FedEx, TNT, and EMS with the UPS as the most preferred means of shipping goods. These methods deliver product from 2 days up to 7 days, which is good enough considering that we are talking about worldwide deliveries. I recommend using these carriers as there will be tracking, customs help, and obviously you receive goods much faster. Usually the prices for these carriers through AliExpress are quite competitive.

D) Are the prices competitive?

Prices are in general more competitive than if you would buy from your local importer/wholesaler or even online store. The general rule is that the prices are around 30% more than the actual manufacturer’s cost. Again, if you have small orders this should still be a good price to add your margin.

E) Example on drop-shipping

There are a lot of drop-shippers from the US on Ebay/Amazon that operate under the same principle as Aliexpress. They usually cooperate with a factory in China (e.g., Shenzhen) and buy their over-stock or have the manufacturer produce a certain quantity of a specific product. The factory does the fulfillment while the EbayEbay/Amazon seller does the marketing and sales part.

An Acquaintance of mine, who owns an affiliate marketing website (http://www.cheapcheapcheap.com/) pointed me to a good example and asked me how is it possible that this seller can sell so cheap: http://www.ebay.com/itm/201253495057

This seller buys from a factory in Shenzhen and the factory has the fulfillment done.

I know for a fact that this item can be bought in bulk quantity for 0.3USD. So they both make a nice profit. And, the Ebay selling price is still very cheap.

Now how can he sell this cheap and include free shipping?
Many fulfillment centers in China have an amazing deal on logistics with CHINA POST.

Some large fulfillment centers in China ship up to 20,000 pieces of goods a day. Now obviously you will get a great deal for shipping costs with CHINA POST as a fulfillment center. The downside? You as a customer might have to wait for 30-40 days to get your item. Also, there is no tracking or tracing with China Post, so if your parcel gets lost it’s gone for good. Many times there will also be customs issues and you may have to pay taxes and duties.

For an item costing only 3USD you can certainly invest 3USD, knowing that your item might get lost.

If you order larger quantities via drop shipping make sure you use a well- known carrier such as DHL/FedEx, etc. You can track and trace the parcel and they will handle customs issues for you too. Money well spent.

Aliexpress Conclusion

A great way to order goods online for small quantities. A few issues here and there that can be solved with the supplier. Quick and easy for starting and testing the waters with the product. The downsides are that you have no way of knowing the quality of the product and that the shipment could get lost (if you use free shipping). Use DHL/FedEx or other big couriers to make sure that your items actually arrive and customs won’t hold them up.

 

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IMG_2548

Validate your product idea

You’ve found your product, GREAT! But careful, don’t get over excited about a product that you just found or had an idea for. You need to evaluate first if your product fits the market and its consumers.

We call this “product-to-market-fit,” meaning you have something that the market really needs.

To evaluate your product you should go through the following steps:

COSTS: 

  • Cost of manufacturing
  • Cost of transport.
  • This can be crucial to your margin if the transport cost is very high.
  • Cost of duties and taxes
  • Possible profit before tax

COMPETITION:

  • Make sure no one or not many people carry your product.
  • Analyse the market, do your research. Look at social media hash tags: http://topsy.com/ (enter your product’s name or category, e.g., LED bulb)
  • Test the idea with a few forums (but don’t give away too much information) – Research trends on blog sites (such as Shopify.com)

More great tips available on Shopify:

http://www.shopify.com/blog/12932121-what-to-sell-online-8-strategies-for- finding-your-first-product

For Example, look at the picture of this post. Its a Projector that can stream movies, music, documents via WiFi / USB and more. I don’t remember exactly but when I saw it at the Exhibition I was really excited. I was eagerly waiting for the price from the supplier. Once I got it I was really disappointed as the price was so high I could never sell it to any of my Customers. Not even if I would have done a lot of Marketing etc.

So what went wrong? First the supplier probably hasn’t done enough research on the market if his product can actually sell and if there is a niche. Second, I was super excited and sent pictures to my Customers already and they were all giving great feedback asking for the price. So when I finally got the price and (embarrassed as I was) sent them the price I made a fool out of myself. Not one Customer was interested in such a high price item.

Remember, do your research and make sure you have a “product-to-market-fit”.

 

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GLOW BLUE

The 6-step Import process

This is a rather large section so I will outline in 6 steps and go into detail in later chapters.

 

The 6-step import process

 

This is the general outline of the process. We will look into each process in great detail in later sections. It is also the same process, no matter if you go to China or sit on in the comforts of your home.

 

These are the 6 steps that you always need to follow trough no matter what product you want to import.

 

 1) Decide for your manufacturing country. In our case this will be China or South East Asia (depending on your product).

Countries have different export/import regulations. While products may be cheap to buy from Asia, there are many other factors, which might add costs. Requirements for importing specific commodities depend on a wide variety of criteria. Some information, such as whether an item is subject to quota restrictions, eligible for reduced rates of duty, or restricted from entry because they originate in an embargoed country, can be determined only if you know the item’s Harmonized Tariff customs number. This can be found for the US for example under: http://hts.usitc.gov/

If you live in Europe or any other country simply Google: “customs tariff number your country”

Click on the link and head over to the official’s country’s government website.

On these databases you can simply look for a product’s tariff or regulations.

You can also try: http://www.dutycalculator.com/

They give you 5 free “look-up’s” the rest is premium & paid services. But to start you can check it out. It’s a great way of finding out all the costs of taxes & customs fee’s you have to consider.

You will also find a lot of tips on items that have “Anti-dumping” tax on them to minimize the import and protect the local industry under above links.

 

2) Find a product

This can be easy but also difficult. You may want to have a niche product or an item where you can make large profits. We will go into this section in more detail later.

 

3) Find a supplier

This is the most exciting but also most difficult part; we go into that in great detail later. If you are new to importing there is usually a lot of support from your local government that are ready to answer your questions. But with this E-Book we want to help you to understand the process by yourself.

 

4) Calculate all duties and taxes

This goes in hand with the first part of the process. Import duty can be calculated in different ways and can make or break your item. I have a rule of thumb myself. I take the Buying price from my supplier and add 20-30% on top. This gives me a rough idea on what my landing price will be. This rule applies to first world countries like the US, Europe, Canada, Hong Kong & Singapore for example. Many 2nd or 3rd world countries are not so open to importing and put a high percentage of duties and tax on top of import products to protect the local industry. Many 1st world countries even have 0% duties & tax to encourage the import. This applies especially on “green products” that are very sustainable and help the reducing energy or waste. A good example is an LED bulb with 0% tax and duties. Of course you can check in detail trough Customs Tariff Numbers (see above) or resources like www.dutycalculator.com

We will go trough an example in “Chapter 19) Calculate your costs”

 

 

 

5) Find a freight forwarder and customs broker

Don’t do this process (logistics) yourself. It can be a nightmare, trust me. Ask your supplier who usually has his own forwarders to give you contacts. If you already have contacts in the industry, great, if not, we will also provide you with a list of freight forwarders & customs brokers. Part of not doing this yourself is also because the freight forwarder usually knows all the procedures and documents necessary. This rule applies to bulk shipments in containers only. If you only have a few samples or pieces to be sent then use airmail or couriers such as DHL/TNT/FEDEX and so on. We will also give you some contacts together with this course. Often times your supplier also has a preferred courier for samples with great rates. Ask him to provide them to you.

 

6) Monitor your shipment and have an Inspection!

If you are having a larger shipment or products that are valuable you NEED to hire a Third-Party for Inspection. This third-party can inspect your shipment during or after production and send you a report. Based on this report you can give the supplier the release of the shipment or have him REWORK your goods. If there are problems found during your inspection the supplier will ALWAYS agree to re-work your shipment because he is still waiting for the rest of his money, which you will only release to him once you are happy with your shipment (do not pay 100% of your order up-front, NEVER). Many Importers skip this step to save costs or trust their suppliers completely. TRUST ME, in my 10 years working with factories for my Buyers I could tell you tons of stories were the products were not 100% according to my Order requirements. It could be a wrong Instruction Manual, many scratches on the product, a faulty wire or heavily damaged carton boxes. Don’t let me discourage you, many times its just minor mistakes that can be accepted but again since I worked for the biggest retailers in the world, products needed to be top-notch. Once you let your supplier know that you will do an inspection on your products he is more likely to pay more attention on your order too. And the best part? This can be done for ~300USD from companies like: Asia-Inspection, TUV, Bureau Veritas and many more.

 

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