June 14, 2016 by Andrew Minalto - 19 Comments
Courier VS Air Freight VS Sea Freight!
Shipping from China – it’s one of the topics that I receive the most questions about, which is really not surprising – after all how do you know what shipping terms to use (EXW, FOB, CNF etc.) or what shipping method (courier, air freight, sea freight) or even which company to go with!
It’s not an exaggeration to say that shipping from China can be very daunting and it’s enough by itself to put off a would-be importer.
However as always I am here to help and I’ve answered most of these shipping questions already in dedicated posts on this blog, which you can find here: How to Import Products From China & CNF, CIF and FOB Explained.
So what is today’s post all about? Well I decided to put together a real life example order and then approach a few different companies for shipping quotes – that way we can put my advice to the test and see what the results are for real!
Without any further ado, let’s get to it!
For this test I created an actual order of 50 pieces of a particular product, packaged into cartons of 5 pieces, with each carton weighing 18 kgs and having a total volume of 0.1 m3.
That meant for our order of 50 pcs that we have a total weight of 180 kilos and a total volume of 1 m3 – which is a fairly standard mid-sized order. I didn’t want to make it so small that courier is the only option but I also didn’t want to make it a full container load as then that would give an unfair advantage to the freight forwarders. Overall I think this order size is a good balance between the two.
And now for the results: (more…)
May 13, 2016 by Andrew Minalto - 324 Comments
CNF, CIF, FOB & EXW Explained!
It’s time for our weekly Reader’s Question post! And this time I’m actually doing an update on an older post as it seems that many people are still confused about the various terms used when importing products from China!
CNF, CIF, FOB, Ex-Works – what does it all mean? And most importantly – which of these shipping methods is most cost effective?
Let’s find out!
My congratulations, your blog is very, very helpful (the most helpful information I have found in one blog so thank you for that!).
But I still have a couple of questions which I hope you’ll be able to help me with.
For about two months I’ve been dealing and negotiating with a Chinese fabric supplier. I’m going to order 500m from various designs and the final price we’ve agreed is $3.37/m CNF London. The price is good so I would like to proceed and organise shipping.
But I’m completely lost on where to start…
What exactly does CNF London mean?
Could you explain to me how it works, step by step, from beginning to end? First I pay for my goods, and then what happens after that?
The supplier suggested that we use a smaller price on the invoice than what I’m actually paying to lower the cost of import tax and duty. Do you think this is a good idea? To me it sounds like fraud but I wanted to get the advice of someone with as much knowledge as yourself.
I would need to pay $1685 for my 500m of fabrics. What about the rest of the costs? How much are taxes and duties in the UK? And when do I need to pay them?
Does CNF London mean I have to collect my goods from a port in London? I live in London so this won’t be a huge difficulty, I’m just confused about how it works.
I am sorry for asking so many questions but when I think about all of these things it turns into a bit of a nightmare! I hope you can help clarify some of it for me.
Kind regards and many thanks!
Okay, let’s start with the basics. When dealing with suppliers from China, you’ll often be offered 4 types of pricing:
FOB – Free on Board (or Freight on Board). This basically means that the cost of delivering the goods to the nearest port is included but YOU, as the buyer, are responsible for the shipping from there and all other fees associated with getting the goods to your country/address.
EXW (Ex-Works) – also sometimes referred to as the Ex-Factory price. This basically means the cost of the product and nothing else! No shipping costs or export fees in China are included in this price, never mind local port and custom fees or delivery to your door.
CIF – Cost, Insurance and Freight. In this case, the price also includes sea freight charges and insurance to deliver the goods to YOUR nearest port. But only to the port – from that point onwards, you take the shipment into your hands.
CNF – Cost & Freight (or Cost, no Insurance, Freight). Similar to CIF only this time insurance is not included.
If your supplier quoted you a CNF London price, this means that the price includes shipping of the goods via sea freight to London port. When the goods arrive, you’ll have to organise customs clearance and delivery to your home/office/warehouse. (more…)
May 6, 2016 by Andrew Minalto - 14 Comments
How to Reduce the Minimum Order Quantity on Alibaba by 50% and MORE!
As we all know, Alibaba.com is a B2B marketplace which invariably means high Minimum Order Quantities (MOQs). So what if your budget is strictly limited but you still want to deal with suppliers on Alibaba – what’s the best way to negotiate LOWER MOQs when dealing with large companies on Alibaba?
This is exactly what Russell asked about in his email:
Firstly I want to say thank you for this wonderful resource you’ve created. I’ve always been interested in creating an eBay business and thanks to your blog finally took action earlier this year buying and selling used items on eBay.
I’ve done pretty well from this and have built up a decent fund to buy goods in wholesale, which is what I’m really interested in. But I don’t think my starting budget is quite good enough to buy from China, judging by some of the MOQs I’ve come across in my searches on Alibaba.
Forgive me if this is a stupid question but is there any way I can bypass these minimum order quantities?? Of course I can continue flipping used goods if need be, but I am really keen to get started with a proper business now that I have some decent eBay experience.
I look forward to hearing from you.
First off, you have to understand that not all companies listed on Alibaba are equal. In general, there are two large groups of suppliers:
- Trading companies
Manufacturers – self-explanatory really – these companies manufacture the products in-house and will usually have very high minimum order quantities. And for a good reason, as manufacturers on Alibaba will very rarely hold any stock – they manufacture it for each order.
Many customers want to put their logo (OEM) on products and the packaging so it makes no sense for manufacturers to hold stock. Each batch of products is made to order and they obviously won’t “run” the factory, arrange assembly lines etc., to make just 10 products. Keep this in mind when you negotiate with true manufacturers as there will be a minimum order level that they simply won’t go beyond. (more…)
March 9, 2016 by Andrew Minalto - 0 Comments
REVERSE Sourcing – From Product TO Supplier!
One thing that I’ve covered in great detail on this blog is how to find good suppliers for the niche you want to sell in, but what if you want to find the supplier/manufacturer of a very specific product?
The idea for this blog post actually came to me from a question that was sent in by one of my EAB customers, who had found a terrific product for sale at a local market and wanted to source it to sell on eBay.
After a few minutes of searching he had found the “same” product and then purchased a sample order. But when it arrived it was nothing like the original product he’d found – the finish was significantly worse, the colouring was slightly off, and even the materials used were of a lower quality… clearly the two seemingly identical products weren’t manufactured by the same company/factory.
So the subject of today’s post is – how to find the exact supplier of a particular product that someone else is selling?
This could be an item you’ve seen on:
- In a local B&M
- At a market
Well the first thing I’d suggest is GOOGLE! But you really need to do some extensive searching, using a variety of search combinations. Here’s a good starting list for you to use:
- manufacturer + product
- manufacturer + brand name of product
- supplier + product
- supplier + brand name of product
- wholesale + product
- wholesale + brand name of product
- Alibaba + product
- Alibaba + brand name of product
- bulk + product
- bulk + brand name of product
- And so on…
Although I usually find Google’s search algorithm to be more reliable, you should also replicate your searches directly on Alibaba, Global Sources, Made-in-China etc.
If you’re lucky, you’ll come across the supplier in this first step. BUT there is one crucial step after that – confirming it is the correct supplier (which is what my EAB customer didn’t do). But more on that a bit later. (more…)
February 8, 2016 by Andrew Minalto - 17 Comments
How Import Taxes Can DESTROY Your Business!
Happy Monday everyone! I hope you enjoyed your weekend.
I apologise, as I know this is probably the last thing you want to hear on a Monday morning, but today I want to talk about taxes – specifically the import and VAT that we, as importers, need to pay on goods bought from outside the EU (i.e. from China, USA, India etc.).
And actually it’s this dislike and general avoidance of the subject that has led me to write this post… as I recently received an email from someone distraught about an order they’ve placed because of the VAT and import duty.
Initially they had expected to make a healthy profit reselling the product on eBay, but they had miscalculated the import taxes! That goes completely against one of my main rules when importing – always do all of your calculations BEFORE placing an order, so that you know exactly what it’s going to cost you and how much profit you stand to make.
So today I want to share a simple and straightforward guide to calculating import taxes. Without further ado, let’s get to it!
First of all, exactly what taxes do you have to pay on goods imported from outside the EU?
And yes, this only refers to goods bought from countries outside the EU as imports within the European Union are import duty free. Just so that it’s 100% clear, the EU countries are:
Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
But when we discuss imports, 90% of the time it’s referring to China, and that obviously means there are import taxes to be paid, which are – VAT (value added tax) and import duty.
VAT is a set amount, currently 20%, whereas import duty ranges from 0% (duty-free) to 15%, depending on the product.
The exact amount is calculated using the product’s tariff code, which is a special number assigned to specific products. And by specific products I don’t mean – doll, clothes etc. I mean really specific, i.e. pyjamas of knitted cotton for boys under 14. (more…)
January 18, 2016 by Andrew Minalto - 8 Comments
AVOID SCAMS by using this one little TRICK!
One of the most common topics I write about on this blog is how to properly source and order products from China so that you don’t get scammed or get low quality goods. I have complete guides on the entire order process and supplier verification, I have detailed the top 10 most common scams so you know what to look out for, and I have revealed some extra tips and tricks to make the likelihood of you being scammed practically nil.
But still I receive messages, on pretty much a daily basis, from people worried about this aspect of ordering from China. And that’s completely understandable – after all it’s hard to send a relatively large amount of money to a complete stranger in another country in the assumption that you’ll get what you paid for.
And that’s why today I want to cover another quick strategy that you can use when ordering from a supplier in China (or any other country for that matter, I just say China simply because that’s the best place to buy products 90% of the time) that will significantly reduce the risk of your order going wrong.
Used in conjunction with all my other guides, and dare I say it, it’s practically impossible for you to be scammed!
But actually this method is nothing new, and in fact it’s something I have already written guides on before – just not in relation to scams. What am I talking about? Branding!
Anyone who has bought my Easy Auction Business video course will know how much importance I place on branding. In my mind it is the difference between being one of a hundred sellers with the same product on eBay, and being a truly unique business.
Custom branding is also one of the best decisions you can make in terms of ROI (return on investment), as small additional costs can lead to much higher selling prices and therefore PROFIT!
But that’s not the only reason to do it, as branding can also minimise the risk of you getting scammed or getting bad products when ordering from China. Now I know many of you will now be wondering “how?” and the answer is actually very simple: (more…)
January 15, 2016 by Andrew Minalto - 12 Comments
Taobao Wholesale Orders vs Alibaba & 1688.com
At the end of Part 2 in our Taobao series, which was published on Wednesday, we had finished comparing the pricing on Taobao vs our tried and trusted AliExpress, and honestly, the results were not good…
With the commission and added shipping costs, Taobao just couldn’t keep up with the low prices offered for single/small quantities. But other than samples, the vast majority of you reading this aren’t interested in single orders anyway – when I talk about importing from China I talk about bulk orders, as that’s the only way you’re going to be able to compete with other sellers ordering container loads at a time.
And that brings us to our final question about Taobao – is it worthwhile for larger orders? To get our answer we’re going to go back to the MacBook cases that we looked at it Part 2, but instead of an order of 10 pieces, we’re going to find out the price for an order of 500!
- £1300 – Cost of Products (500 x £2.60)
- £130 – Commission
- £300 – Shipping
= £1730 TOTAL = £3.46 Per Piece
So again another big drop in the cost per piece compared to ordering 10 units at a time, but that really is to be expected at such quantities and any other result would have been a huge disappointment…
Does this change my overall thoughts on Taobao in any meaningful way? Well no, not really, as I’m practically certain that I could easily beat that price for a quantity of 500 using Alibaba.
In fact, I found this after literally 30 seconds of searching:
Ignoring the shipping costs as that’s a courier vs freight for the Taobao example, the price per piece of $3.29 is equal to roughly £2.19, which is already 15% cheaper than Taobao! That’s for 100 pieces, I would obviously expect it to be even cheaper for 500 and once again this is without all the hassle of using a buying agent, paying commission, waiting longer for multiple shipping times etc. etc.! (more…)
January 13, 2016 by Andrew Minalto - 2 Comments
Taobao Part 2 – Price Comparison vs AliExpress
Hello and welcome back!
After introducing Taobao and going over exactly what it is in Part 1, as well as finding three highly regarded buying agents to use for our experiment, it’s now time to take a look at pricing!
After all, is there any point to Taobao if it can’t beat the pricing of a site like AliExpress, where everything is in English, you can simply pay using your own credit card, and no buying agent is required?
So without further ado, let’s get to it!
Really there were three different sites that I could have used as the “competitor” to Taobao in our pricing experiment – Alibaba, AliExpress, and eBay.
I decided that from the three, AliExpress is the fairest as:
a) Taobao is geared towards single quantity orders, not wholesale, so Alibaba is out!
b) Taobao is obviously based in China, which eliminates eBay. So that means the fairest comparison for us is AliExpress.
Alright, let’s get started with product no.1:
*Please note – I am not considering the viability or profitability of these products at all – they are chosen at random in order to compare pricing, and nothing more.
Syma X5SW RC Camera Drone
As you can see from the below screenshot, this item is readily available from AliExpress for $75 including shipping which gives us a price of £50 (at 1 GBP = 1.5 USD)
Searching for the product on Taobao produces a number of results, some initially appearing at a much lower price! But looking further I immediately see that these are for a cheaper model than the X5SW being offered on AliExpress: (more…)
January 11, 2016 by Andrew Minalto - 11 Comments
Taobao.com – Cheapest Way to buy from China?
Taobao – I’m sure many of you have never even heard of this company, never mind bought anything via their site, but Taobao.com is a hugely important company that could change the way you import products from China, and most importantly, what price you get!
But let me back up a little bit and explain what Taobao.com actually is.
Basically, Taobao is an online marketplace where millions of sellers list their products for sale. Although you often hear people talk about it as an Alibaba alternative, really a more accurate description is – the eBay of China (seeing as the items are sold in retail quantities).
Now I know what you’re thinking – great, but what’s this got to do with importing and how can it help me!?
Well, think about it for a second. This is the eBay of China, which means it is geared towards the domestic market, and not export/international orders, like AliExpress and Alibaba.
So this is a site designed for sellers in China, the cheapest place to buy items from pretty much every country in the world. And as these are domestic prices, in theory they should be cheaper than any other alternative!
As TaobaoFocus.com puts it:
No other online or offline business can beat the prices on Taobao.com: you can always buy items from Taobao.com at lower prices than anywhere else.
A bold claim, I know, and something that we will be investigating fully in a special 3 part series of posts. Part 1 is what you are reading now, in which I will introduce Taobao and explain what it is. Part 2 will be released on Wednesday, and in that I will pit Taobao head to head with AliExpress to test its pricing. And then we’ll wrap up the series on Friday, in Part 3, where I’ll give my final conclusions and recommendations, and also introduce another surprise site! (more…)
November 24, 2015 by Andrew Minalto - 16 Comments
Alibaba GOLD Member SCAMS!
The blog is turning in to a bit of a scam buster site now, as today we have a post all about Alibaba Gold Supplier scams, to follow on from last week’s one on Trademark applications.
Anyone who has read my very popular post “exposing the Alibaba scam” or the follow up article I did detailing the 10 most commonly attempted scams on Alibaba will know that I always recommend that you only deal with Gold Suppliers when sourcing products on Alibaba.
In fact, it’s the very first criteria I use when I’m searching for a new supplier and want to instantly filter out a large majority of the un-safe options. The reasoning behind it is incredibly simple – it costs a lot of money to become a Gold Supplier on Alibaba and most scammers are unwilling to spend that sum, when they know their account won’t last long anyway.
So does that mean only dealing with gold suppliers on Alibaba protects you completely against scams and makes you 100% safe? No, unfortunately not! You can still get scammed by gold suppliers on Alibaba and that’s exactly what I want to talk about today.
But before we get started with the meat of today’s post – I do want to quickly point something out: the absolute vast majority of gold suppliers on Alibaba are 100% legitimate companies. Of course I can’t put an exact figure on it, but I would estimate that around 1% of your dealings with these companies will be a scam. And no matter where you’re ordering from, a 99% success rate is very impressive!
So please don’t let this article scare you away from Alibaba, as that is the opposite of my intent! Instead I want you to feel more confident so that you can use Alibaba safely to source great products at great prices.
Alright, now that’s covered, let’s get back to the topic at hand.
From my experience and knowledge, there are 5 main instances when you may be scammed by a gold supplier, and we’re going to go through them one by one so that you know what to look out for: (more…)