February 3, 2017 by Andrew Minalto - 18 Comments
Importing Cosmetics from China is NOT as Easy As It Seems!
I recently received an email from a blog reader, Arron, who’s looking to invest his £5,000 starting budget into creating a new brand of male cosmetics.
Is that a feasible budget or do you need more money? Or is the cosmetics niche simply too difficult, with too many rules and regulations?
That’s what we’re going to find out in today’s post!
To start, he’s the email I received:
I have become interested in creating a brand around male cosmetics and wanted a bit of advice.
I am looking at importing products from China however, I am aware that the UK/EU have a number of requirements/restrictions in place.
Have you ever worked within the sector before? Do you have any advice on best practice i.e. ensuring the supplier has all the certificates, and that they’re real!
As my buying power is rather small. £5,000 should I look at something “less risky”?
In terms of legal requirements and responsibilities, you’ve chosen one of the hardest niches possible – cosmetics.
Anyone selling cosmetic products in the UK has to comply with EU wide safety regulations – this includes manufacturers, importers, wholesalers, and retailers (whether you’re a large limited company or a small sole trader). However, if you yourself manufacture the product or you’re the first person to import them from outside the EU, then you’re deemed to be a responsible person under UK law and greater requirements and responsibilities apply to you.
The EU Regulation (EC) No. 1223/2009 of the European Parliament is enforced in the UK by the Cosmetic Products Enforcement Regulations 2013 which came into force in July 2013.
The main legal requirements as set out by the Regulations, are that:
- It is a criminal offence to supply cosmetic products that may cause damage to human health when applied under normal or under reasonably foreseeable means of use.
- The use of certain substances in cosmetic products is prohibited.
- The use of certain substances in cosmetic products is restricted.
- Cosmetic products must comply with detailed labelling requirements.
- Certain information and records must be maintained by the “responsible person” and available for inspection.
But before we go into these rules in more detail, I want to quickly cover what qualifies as a cosmetic product, as that’s obviously very important. And there is a specific definition as set out by the EC Regulation, so you can’t just say it’s not a cosmetic product and by-pass all the requirements! (more…)
August 11, 2016 by Andrew Minalto - 3 Comments
Product Sourcing on Alibaba.com – Buying Requests vs Searching Manually?
A little while ago I took a look at one of Alibaba’s new tools – the AliSource Tool. You can check out my full review of that here: Alibaba’s AliSource Tool – Does it Work?, but basically it’s a tool that allows you to automatically post a buying request for any item you find on Alibaba, AliExpress, Amazon, or eBay.
And in my review I spoke a little bit about how I personally don’t use buying requests and instead prefer to search for suppliers for a product manually.
There are a number of reasons for this, such as:
- It allows me to apply my filters when looking at potential suppliers;
- I can do some preliminary supplier verification;
- I can ask specific questions;
- Quality over quantity – this is really the main reason! I prefer to select and talk to a view different companies so I can get a proper feel for them, makes notes etc. rather than just being contacted by countless companies that I know nothing about.
BUT, this is all personal preference, it’s how I prefer to source products and find suppliers but for some people the ease of posting a buying request may be more beneficial.
So today I want to do a little test – I’m going to put buying requests up against manual searching and see which comes out on top!
How this works is very simple:
- I’ll select a product.
- I’ll post a buying request for that product using the AliSource Tool.
- I’ll manually search on Alibaba.com for suppliers myself (but in order to simplify the process, the only filter I’m going to apply is that they have to be a Gold supplier).
- I’ll compare the results (pricing and MOQ), in order to see if there is any real difference between the two sourcing techniques or if it really is just a matter of personal preference.
Alright, it’s time to get to it then!
Just as a reminder, I select products on a fairly random basis for these tests, it’s not based on profitability or anything like that!
Okay, for our first product I’ve chosen a 2L waterproof bag which I came across on AliExpress:
While on the product page, I simply click the AliSource Tool bookmark button and this buying request opens and the information is automatically pre-filled for me: (more…)
July 20, 2016 by Andrew Minalto - 57 Comments
Shipment Arrived WITHOUT Customs Clearance! What to do?!
I regularly receive emails & blog comments from people who have imported something from China – shipments that should have been declared through customs so that import duty and VAT are paid – but they arrive without any such charges.
This usually happens because Chinese suppliers UNDER-DECLARE the value of the goods sent to you. E.g. you bought something for £200 but the supplier marks the package as a GIFT and puts $20 as the value, which by law means there are no taxes to be paid.
For personal use this doesn’t create much problems BUT if you’re a business owner or sole trader, this is a big issue as you can’t properly book the transaction as you haven’t paid any taxes. And even if you do, if you get an audit from HMRC they will quickly find out that you haven’t paid taxes on these purchases which could lead to penalties.
If your goods are delivered via sea freight or air freight, then there usually won’t be any problems as the shipping company will by default process your shipment through customs.
Problems usually occur with courier companies and Royal Mail (airmail deliveries).
First, I will give some advice on what to do to PREVENT situations like these from happening:
1) Always, always ask your supplier to attach the REAL invoice with the REAL value listed on the outside of the package and to fill in any attached customs forms properly. In many cases this will help but it’s still quite common for Chinese suppliers to under-declare your shipment, even if you’ve asked them not to.
2) If your goods are being sent via courier (DHL, FedEx, UPS etc.) then once it’s been dispatched and you have the tracking information to hand, you should call the courier and inform them that this shipment requires customs clearance. They’ll usually give you the contact details for their customs department, who you can send the invoice and proof of payment to. This way, once the shipment arrives in the UK they’re already prepared and ready to do the proper customs clearance.
Now, let’s cover situations when you receive your goods without paying any taxes: (more…)
June 29, 2016 by Andrew Minalto - 0 Comments
Alibaba’s AliSource Tool – Does it WORK?
I recently came across a new development by Alibaba – called the AliSource Tool, which is basically a toolbar install that allows you to source products from across the web in one simple click!
But what exactly do they mean by “source products”? Well really to submit a buying request for that product on Alibaba itself, which then allows suppliers to contact you with quotations.
Now, long time blog readers will know that I’m not actually a huge fan of submitting buying requests on Alibaba! Of course the premise behind it is that it’s amazingly fast and will save you a lot of time, however I still prefer to contact suppliers one by one.
As that way I specifically choose which companies I talk to (I can apply all my filters and also do some preliminary supplier verification at that point), whereas when you submit buying requests, the companies are contacting you.
Also, my final reason is that I feel a lot of not so serious buyers submit buying requests and the suppliers probably know this – meaning the calibre of companies is maybe not quite up to par.
However, this is all a personal preference and many people do use buying requests with great success.
And using it in conjunction with the AliSource Tool provides a big benefit – it allows people to source products that they can’t necessarily find on Alibaba itself!
Say I’m browsing Amazon or eBay or even AliExpress and see a product I’m interested in; so I head to Alibaba and search for it as best I can, using the information/title of the listing I found. (more…)
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 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 - 21 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…)