Many of you will choose to import goods from abroad (outside the European Union). If and when you do, it’s essential to fully understand how importing works; what extra costs are involved, time frames for delivery etc.
For many new traders, Importing sounds like a nightmare to go through. But in fact, it’s not that complicated at all IF you know the basics behind the importing process – payment, shipping, taxes and customs. In this blog post I’ll try to cover most of the important aspects of importing from China and other countries outside the EU.
What does “importing” mean?
In general, importing means that you’re buying goods from a supplier outside your country. However, in my examples I won’t be counting European Union countries as goods can be freely moved across the EU without paying extra import duty or VAT. For most of you, China and the United States will be the top two countries to import from, so let’s cover them in detail.
Shipping Methods
Shipping costs will make up a substantial percentage of your total product cost, so it’s important to keep them as low as possible at all times. As a general rule of thumb, the bigger your order, the lower ‘per item’ shipping costs you’ll face. There’s no point in importing one pair of unbranded shoes from China as the shipping costs will be far more than the cost of the product itself. Volume is the key to success when building your eBay business around an “Importing from China” product sourcing concept. But that doesn’t mean you have to start off with full container loads either!
Here are the 4 most popular shipping methods you can use to import goods from China:
1) Regular Post. This means normal, regular China Post which can take up to 6 weeks to arrive. No online tracking is provided. It can be used for parcels under 2kg. Usually, you will only use regular post for samples and again ONLY if time is not that important and you can afford to wait a few weeks for a package to arrive. China Post is not the most reliable system so be prepared for lost/stolen packages.
If at all possible, I try to avoid using China Mail for any shipments as the delivery time is simply too long.
If your supplier is located in Hong Kong, you can use HK Airmail which is way more reliable, comes with a tracking number and usually arrives within 5-10 days.
2) Courier. Shipping with a courier company will be the most suitable method for most people starting out IF it involves small, lightweight items. With courier companies such as TNT, DHL, UPS or FedEx you pay a premium price for each kilo BUT you get fast delivery times and an online tracking facility. These days most courier shipments take just 3-5 business days to arrive in any Western country from anywhere around the globe. I personally use TNT and DHL most of the time as their prices have worked out lowest for me. For a 50kg package, expect to pay around £4 or £5 per kilo.
3) Air Freight. This is somewhere between courier shipping and sea freight. Shipping times vary from company to company, but in general range between 5 to 10 days which is not bad at all! With Air Freight costs will be significantly lower than with courier companies, but extra work is involved when the goods arrive in your destination country. With Air Freight you’ll usually have to handle documentation and customs clearance on your own (unlike with courier companies), which for many newbies may seem impractical. Of course, you can always outsource these tasks to a freight forwarding company at an additional cost.
With Air Freight, expect to pay £2-£3 per kilo for a 100kg shipment.
Air Freight is usually cost effective once shipments are in the range of 100kg or more UNLESS very bulky items are involved; if that’s the case your only viable option is to use Sea Freight.
4) Sea Freight. This is the most popular shipping method used by big companies to import goods from China. The cost per kilo (£100-£150 per pallet, even less if you can order full or half-container loads) is very low but the downside is the lengthy delivery time. Depending on where you’re located it will be in the vicinity of 30 to 40 days in most cases.
Just like with Air Freight, you’ll have to take care of the documentation, customs clearance and delivery of goods from the port to your home or office. It’s not that complicated to be honest – I do this on my own on a regular basis, but I understand that for newbies it could seem too complicated and that’s why I recommend using a freight forwarding company that will take care of all the procedures and deliver goods right to your door.
Also, with Sea Freight it’s very important to calculate all the EXTRA COSTS involved once the goods arrive in your country. Your supplier will usually give you the FOB price, which means that the goods are loaded onto the ship. But that’s not the end of the story! Once your shipment arrives at the port there are all kinds of extra charges, such as:
- Unloading charge;
- Port fees;
- Docking fees;
- Storage fees;
- Clearance fees;
- Etc.
And I’m not talking small figures here! These fees can run into hundreds of pounds! That’s why it’s crucial to take these numbers into account BEFORE you order any goods so that you know precisely what your final product cost will be.
Again, the easiest way to keep these costs under control is by using a freight forwarding company. You can ask them to quote for door-to-door delivery which includes all the fees associated with Sea Freight shipping.
Even with all the additional fees Sea Freight is still the cheapest shipping method for imports from China. Remember that it’s cost effective ONLY if your order is big enough. Usually, a half pallet or one full pallet will be enough if your margins are right. Again, this will depend on the kind of goods you’re importing, their value and weight. Sometimes Air Freight offers the same savings as Sea Freight with the added bonus of much speedier delivery.
In general, Sea Freight is better for bulky items or in cases where the shipping time is not that important. Personally I try to stick to couriers and Air Freight as often as possible as I just can’t stand the long wait involved when using Sea Freight. (but then again I deal mostly with small, light weight items).
Advantages of Using a Freight Forwarder
Here is some good news – I have recently started recommending a freight forwarding company called Woodland Global. You may already have heard about them if you’re an active member of The Wholesale Forums as Darren, who works for them, is a member there and he helps people with questions about importing.
Woodland Global is a great company to deal with and so far I have only heard positive feedback about them:
- There are no yearly or joining fees;
- They’re UK based and very easy to get in touch with;
- They’re fast because they ship containers from China on a weekly basis;
- Their pricing is very competitive, even for small-time importers;
- They will deliver goods to your door and take care of all the documentation.
In a word – Woodland Global is a perfect solution for small-time importers! Their fees are very affordable and they’ll even deal with small orders. If you’re interested in their services and need a quote, get in touch with Darren on TWF or simply use the contact page on their website.
Imagine the kind of opportunities this opens up to you, especially if you’re just starting out on your journey and you’re still looking for the perfect niche? Most people stay away from bulky items as they don’t want or don’t know how to deal with Sea Freight shipments effectively. Now, with the help of a freight forwarding company, it’s suddenly not so much of a problem anymore!
Woodland Global can even pick up goods for you in China and deliver them to the nearest port. However, if possible, always try to arrange shipment of goods to a Chinese port via your supplier, as this will often work out to be cheaper.
Shipping from the US
If we talk specifically about importing from the USA, the cheapest option for sending parcels is with the US Postal Service. They’re reasonably priced, especially if you don’t opt for their fastest shipping method. You can send up to 30kg per shipment and the closer you get to that 30kg mark, the cheaper the price per kilo.
Even if your order comes in at 50kg, you can simply split it into 2 shipments and still send it via USPS. Of course, this will only work with small, lightweight or valuable items, not furniture or LCD TVs. For bulky items you’ll want to go back to using Air Freight or Sea Freight.
As you can see, each method has its advantages and disadvantages, but in general you should be able to make your decision based on these 3 major factors:
1) Size and weight of the shipment
2) How long you can wait before the shipment arrives
3) Value of goods
In other words, the best shipping method will depend on your order!!!
Payment Options
When dealing with ANY supplier for the first time, you have to be extremely careful. There are so many scammers operating out there in the wholesale industry, so before you decide to send money to your supplier, make sure you do all the background checks available to you to make sure you’re dealing with a legit company. And even then, always, always start with a small trial order to avoid huge losses if that supplier turns out a scammer.
When you have done all the checks and verified the supplier, you can place your first order. Which payment method is safest to use? Usually, suppliers will accept the following:
Wire Transfer – this means sending money from your bank account to the supplier’s bank account. This is the most common payment method used in B2B transactions. Wire Transfer doesn’t offer ANY protection, so only use this method with suppliers you trust 100%. Sending money to a supplier in China can take up to 5 working days.
Transfer fees will vary from bank to bank but in most cases will be in the region of £10-£30. Most banks offer international wire transfers at a reduced cost when you use the bank’s ONLINE banking facility. Finally, the fee you pay your bank to carry out this transaction is usually a fixed one which means that the more money you send per transaction, the lower per pound fee you’ll pay.
Most Chinese companies will accept wire transfer as a default payment option. If they don’t, it may be a sign that something dodgy is going on. Make sure you only send money to the company’s bank account and not to a personal bank account, no matter what story the Chinese supplier tells you.
It’s worth bearing in mind that even though your bank may charge you only a fixed fee for making the payment, that there are usually additional fees involved. Banks typically add a markup to the exchange rate and so you end up having to pay more to send money overseas.
TransferWise: Companies that specialise in international money transfers could save you a substantial amount of money if you’re looking to make frequent transfers to your Chinese suppliers.
FCA and FinCEN regulated, TransferWise are up to eight times cheaper than banks when it comes to making international payments. They always convert money at the mid-market exchange rate – ie. the rate you see on Google is the rate you’ll receive. The only fee you’ll pay is a small, upfront fee on the value of the transfer. You can also make global USD payments to your Chinese supplier and with their fixed fee of $2 + small % cost of currency conversion, their rates are very competitive.
Setting up the payment is simple as well. You sign up for a free account, set up your transfer by entering your supplier’s bank account information and state what currency you’d like to pay them in and then fund your transfer. Options include bank transfer and debit/ credit card. Your supplier won’t need to do anything. For them, it’s just like receiving cash into their bank account.
With over 3 million customers and co-founded by the first employee of Skype, you can be assured that your money is sent securely. However, just like with a normal wire transfer, your money is not protected if your supplier turns out to be fraudulent so it’s best used when you’re paying a supplier you trust.
You can find out more about TransferWise in my post here.
Credit/Debit cards – one of the safest ways to pay for goods is by using your credit card. Chinese suppliers will vary rarely take credit card payments but companies in the EU or US will, in most cases, be happy to accept credit card payments. Some companies may add on a small extra fee to cover the fees they have to pay themselves when they accept a payment by credit card.
Why are credit cards good for paying your supplier? First of all, with most card issuers you can initiate a charge-back if something goes wrong with your order or the supplier turns to be a scammer.
Secondly, most cards offer a cash-back or points system where you can actually get some money back in the form of bonuses from your bank – be they frequent flyer points or extra cash in your bank account.
Lastly, if the supplier accepts credit cards it’s a pretty good sign that he’s legit, especially if we are talking about suppliers in the UK and US. Why? Because it’s not that easy to set up a merchant account and start taking credit card payments. Companies have to undergo a strict verification process to be able to take card payments and this is something most scammers won’t do.
PayPal – I’m sure you’re fully aware of what PayPal is and how it operates. These days, most Chinese suppliers will accept PayPal payments. All your payments with PayPal are protected, so you can always open a dispute and request a refund if a supplier has scammed you. Now, you will not always win those disputes, but PayPal’s most recent policy is generally buyer friendly and sellers are the ones who have to prove that the transaction was legit and the goods were delivered.
Again, it’s not that easy to open a PayPal account in China, which is why scammers try to avoid using PayPal and will push WU, MG or other similar, unsafe payment methods. As with a wire transfer, make sure you’re sending money to the PayPal account of the company you’re dealing with and not a personal PayPal account.
Escrow – Legitimate suppliers know how important safe payment methods are to buyers and that’s why when dealing with suppliers on Alibaba, you now have the option of using Alibaba’s escrow payment system.
What is escrow? With escrow, you first send the money to an escrow company and they hold it for you until you receive and inspect goods and only then release the money to your supplier. It is by far the safest payment method as you ONLY pay your supplier once you have received and inspected the goods.
Western Union, MoneyGram etc. – NEVER ever deal with a supplier who only accepts Western Union, Money Gram or similar payment methods! The only time you should use Western Union is when you are ordering product samples as WU transfer fees are much lower than bank transfer fees.
But only do it with totally verified, trustworthy suppliers. When you use WU, you can’t actually send money to a company; only individuals can send and receive money via the WU network.
Most scammers will only accept payments via Western Union. If branded goods are involved, it’s a sure sign that you’re dealing with a scammer!
Personally I try to stick with PayPal when dealing with Chinese suppliers and PayPal or credit card when dealing with US based suppliers. Wire transfer is usually ok for European suppliers and manufacturers, if we are talking about verified suppliers.
Currency Exchange Rates
There’s not much really you can do about currency exchange rates; you simply have to accept them as an additional cost when dealing with suppliers abroad. If you’re dealing with large amounts of money (in excess of £10k+), you can look for currency exchange companies that may offer you better rates. Personally I have never used such companies as I’m only dealing in high profit margin items these days where 1% doesn’t have any impact on my bottom line.
If PayPal is the only payment method offered by your supplier, you simply have to accept PayPal’s exchange rate as it is. If wire transfer is an option, you could probably get a better rate from your bank BUT they’ll take a commission on an international transfer which will offset all the savings you would make on the currency exchange.
If you have a really strong, long-term relationship with your supplier, and you’re 100% confident they won’t scam you, try offering a PayPal Mass Pay option to your supplier – in return for a percentage from the total you have to pay (PayPal won’t charge any fees to a supplier using Mass Pay).
So for example, if you pay $1000 via PayPal in the usual way, PayPal will charge a fee of around $30 and the net amount the supplier will receive will be $970.
But if you agree to using Mass Pay, the supplier might charge you only $980, generating savings for both parties. $20 may not seem that much but that’s only if you send $1000. For larger payments this method can save hundreds of $ in fees! REMEMBER, only do this if you’re 100% confident about supplier you’re dealing with!
To sum it up – factor in currency exchange fees as an additional cost that you can’t do anything about! PayPal will probably turn out to be the best payment method for you, especially if you sell on eBay (buyers will also pay you via PayPal, simplifying cash flow for your business).
Taxes
When you import goods into the EU from abroad, you have to pay two kinds of tax before the goods are actually released to you:
- Value Added Tax (VAT)
- Import Duty
The VAT rate is different for each European Union country, so make sure you check your country’s specific VAT rate before making any calculations. The current VAT rate in the UK is 20%.
Import duties vary widely from product to product so do check the accurate rate with the help of this free online calculator:
http://www.dutycalculator.com/
Import duty will be usually be in the range of 2%-5%, but with some products it can be as high as 10% or even more. On the other hand, with some product groups you won’t have to pay import duty at all, so be sure to check out that online calculator to see exactly how much import duty you’ll have to pay for your particular goods.
REMEMBER!!! Import duty is payable only on the goods’ value, but VAT will be applied to the TOTAL of:
Goods’ value (price paid to the supplier)
+
Shipping
+
Import Duty
So VAT is calculated on the value of the goods + shipping + import duty. I just wanted to clarify this as people often get a nasty surprise when they see a bigger number than the 20% of the goods’ value they were expecting.
Register for VAT or not?
Many people who are just starting out importing will ask this question – should I register as a VAT payer before I import goods from abroad? The answer is NO, NO and NO! Without going into numbers and complex calculations, you will want to stay away from VAT registration as long as possible (that is, until you reach the maximum turnover after which you HAVE to register for a VAT number by law).
So just remember that you don’t have to register before you reach the threshold. The current VAT threshold in the UK is £77K over the previous 12 months. You can even ask for an exception to be made if your turnover exceeds this amount temporarily. You’ll find more details on the HM Revenues and Customs website. VAT thresholds vary from country to country, so if you’re based outside the UK, be sure to check the local laws regarding VAT registration.
Read more about VAT registration for small businesses here.
EORI Number
A few years ago the EU introduced an EORI number to monitor imported goods. This number is used for statistical purposes and there are no extra costs involved.
You’ll find more information about EORI on the HMRC website. As a general rule of thumb, if you’re a registered business it’s a good idea to register for EORI before you start your importing activities or else the process of receiving your shipment when the goods arrive in the UK may be delayed.
EU regulations, CE mark.
With some product groups you have to be extremely careful when importing goods from China, or any other country outside the European Union as you must ensure they comply with EU rules and regulations. Some sensitive product groups are:
- Health & Beauty products
- Electronics
- Children’s toys and equipment
- Food
- Chemicals, drugs, creams etc.
What you’ll find is that most Chinese suppliers will tell you that all the certificates are in order : DON’T take their word for it! If you can, verify that all the documentation is genuine so you can import those goods into the EU without any chance of them being seized and destroyed at customs.
Copyright & Patent Issues
Another sensitive question – patents. You’ll eliminate copyright issues as long as you stay away from branded items and items with branded designs (such as kids’ toys with Disney characters, company logos, movie characters etc.) With patents, the situation is more difficult as there is no easy way to find out whether an item you want to import from China doesn’t breach any registered patents. What you can do though is ask your supplier about potential issues with this BEFORE you place your order.
Patent issues often come up with electronics and specific instruments and devices, so if you’re dealing with some really fancy device or piece of equipment, make sure the supplier’s products don’t use any patented, protected technology.
Conclusion
Don’t be afraid of the importing process, but start small.
It’s not as complicated as it looks, especially if you use courier as a shipping method. With couriers you don’t have to worry about long shipping delays or customs clearance as they will take care of all the documentation for you.
Take it step by step – place a small order on AliExpress and see how it works out. On AliExpress you’re protected by an Escrow Payment System, so if something goes wrong with your order, you can always open a dispute and get your money back.
Good Luck!
Andrew
[…] http://andrewminalto.com/how-to-import-products-from-china/ http://andrewminalto.com/cnf-cif-fob-explained/ […]
Hi,
I would like to import baby play mats from China. Supplier delivers it to Felixstowe. Where and how can I pay import tax without going to Felixstowe myself? Is it possible to arrange to get goods delivered to my UK address too?
Thanks,
Rita
Hi Rita,
Yes, it is possible with the use of a freight forwarding company, such as WG:
http://www.woodland-group.com
Thanks,
Andrew
[…] http://andrewminalto.com/how-to-import-products-from-china/ […]
Hi can you help me please? I am looking to set up a new brand of graffiti spray paint in the uk and I am sourcing from China. I am looking to import all the products but don’t no much about importing. I am trying to get samples sent to me but some company are telling me that they will only send by sea as air is to expensive £90 for 3 cans by air as they are classed as dangerous. If I send them by sea I need to pay for 1 cubic metre is there any other way for me to send my sample? Or other ways to ship smaller amounts other then paying for 1 cubic meter?
Hi Nick,
No, I’m afraid there isn’t.
Paint spray is considered high risk item and you can’t send it via air, so only way to do this is via sea freight.
Andrew
Hi Andrew,
I’ll be organising a LCL shipment through Woodlands global in a month’s time, I’m sure I can put Nick’s samples with mine to help him out and then send locally at this end. Feel free to forward my email address to him (and you don’t need to publish this, obviously).
Hi Andrew,
Great article and really informative.
Just about to venture into the e bay selling arena and looking for a bit of guidance on how to proceed really. My first order is likely to be about 200kg with a value of $2100 +/- as I am yet to get down to the negotiations with the suppliers. Ideally looking to have the customs elements taken care of for me would a courier take this size of shipment? If not will have to look at airfreight / forwarding agent.
What sort of costs can I expect to pay upon arrival of the goods in the UK?
Thanks
Hi Mike,
Couriers can take really any size of shipment BUT costs will be outrageous!
For a 200 kg shipment worth just $2k, your best bet is to use a freight forwarder and ship via Sea freight to keep costs down to minimum. Woodland Global can do this for you, including customs procedure and delivery to your door.
You will want to contact them to get exact quote.
Thanks,
Andrew
[…] my blog and training courses, I mostly talk about brand new stock sourced from wholesalers or imported from China. But what about liquidation and clearance stock? Can you make money by buying and re-selling such […]
Andrew
I have read you blog with real interest (most of it anyway, so forgive me in advance, if after I ask my question below, it seems like you’re going over old ground.)
Basically I am carrying out a major home renovation project and want to order 100m2 of quality limestone tiles from China for my own use (not a business. – Min order quantity BTW.) My brother lives in Shanghai so he will organise big pallet at his end – probably going to be a couple of tonnes weight but not huge volume wise. This will cost me about £1500
As a very rough guide, what other costs do you think I might incur when the pallet arrives at a port in the uk and will I need to pay duty/ VAT?
Thanks
Peter
Hi Peter,
Yes, you’ll have to pay VAT and import duty when goods arrive in UK + additional port charges, customs clearance fees and other expenses.
Best way to know how much exactly it will cost is to use freight forwarder who can offer door to door service. This means you’ll know exactly how much everything will cost. Get in touch with this company to get a quote:
http://www.woodland-group.com
Hope this helps!
Thanks,
Andrew
Hi ,
Andrew
I want to buy a moble from ebay.com and the mobile is coming from china to India and the cost of mobile is $200 and shipping is free , I want to know what are the extra cost(duties) of the mobile coming mobile from china to india
I’m sorry but I’m not familiar with import tax system in India.
Please do some online research on your own to find out exact tax rates and procedure.
Thanks,
Andrew
Hi,
I’ve been using pandacourier.com for shipping.
They are really ok and trustfull.
I was using taobao agents. They are ok. yoybuy, buywithagents or bhiner. Very nice and safe.
Thanks for sharing this with us Michael!
Hi andrew
I have taken the jump and started looking into importing from china
i have done alot of reading up on best ways to deal with shipping
I have agreed a price with a company in china on a product
on the quote it says FOB Taiyuan which from what i have read means they will get it to that location inclded in the price and i have to get a frieght forwarding company to deal with it from there BUT on the quote they have put EXPRESS FEE TO UK $100 so im confused should there be a shipping fee if its FOB and if that is the price to deliver to me from what i have read $100 seems very cheap
I have done my checks on the company and they seem very good
as this is my first import i have only ordered small 12kg parcel of small hand tools (no blades) value of $180 is a fright forwarding company the best route for a parcel of that size
Many thanks Andrews
Hi Gavin,
Thanks for your comment.
From the looks of it, they have already included a courier fee for door to door delivery. $100 sounds about right for a small 12kg package if sent via EMS for example. You should of course double check this with supplier.
Thanks,
Andrew
P.S. And in general no, for such small shipments freight forwarding companies are not cost effective at all and you should stick with courier companies for packages less than 50kg or so.
Thank you very much Andrew you have eased my worrys
So when it comes to customs charges ect as its a door to door service do i not need to worry about all that or will i still have the charges once it gets to the UK.
Again thank you for your reply and keep up the good work on this site its gold dust to us taking the leap into importing.
Many Thanks
Gavin Rice
You’ll still have to pay VAT & import duty, yes, but courier will sort out all the documentation and just send you an invoice for you to pay.
Thanks,
Andrew
Hi Andrew,
Thank you for your very good explanation and recommendation.
I have just one question. I booked a flight ticket and I’m going to Canton Trade this spring.
I read a lot of about it. I have been successfully trade on eBay and Amozne, using mostly suppliers from Alliexpress and Alibaba. I was wondering if I could get better prices (and the same good quality) if I contact face-to-face with factory managers on trades. I read that it is not worth to buy items on Canton Trade (as they are expensive), but is factory offer better price then Alibaba and Aliexpress?
I don’t know Monica as I have never been to a Canton show myself. From what I have heard, it’s good for large buyers, I mean – really large buyers and people who just looking for new products/niche ideas as there in one place you can see so many different products. If you want better prices, better way to spend your time in China probably would be to get a translator/local person who is working with product sourcing and visit factories together (ones you have researched online and also new ones) and maybe make some deals that way.
You’ll find many factories on Alibaba so you can still get in touch directly with factories/manufacturers via Alibaba.com
Hello Andrew ! Great blog. I am just starting with trading bussines, I am reading and do research. I would like start import small amounts from China and when I get it, set up company and start trading. I have ordered 7 pieces of jewelery from China and planning resell it in the future. I don’t have any tracking number. I have two questions regarding EORI form and product certificates/ testing. I had a look on Application for Economic Operator Registration and Identification (EORI) for non VAT register. They are asking in point one of the form about Applicant’s trading name but formally I have not set up company yet so how I could fill in. Further in point five they are asking legal status, at the moment is not company, if so do I have choose other and in details below the form call it individual ? When I will set up company and legal status will be changed do I have to fill in this form again as Sole proprietor ? Also they are asking Contact details of freight agent to be used but I would like use DHL on start. Where I can get list of products needs certificates/testing ? Thank you. Kind Regards. Margarit.
Hi Margarit,
Thanks for your comment.
If that order is small, just 7 pieces of jewellery, you don’t need to apply for an EORI number at all so don’t over-complicate your life at this stage 🙂
Thanks,
Andrew
Hi Andrew ! Thank you for Answer. I am planing bulk order from China so I will need EORI number anyway. Section 8 of EORI form is: Contact details of freight agent to be used, what if I will be using DHL. In first section of EORI form they are asking applicant’s trading name. Is it means I can not import since I will register as sole trader and then fill in by the name of my company ?
Yes, contact details will be DHL in that case (company who ships the package).
Trading name – if you’re not registered as business yet, you’ll simply enter your name there and write – individual.
Hi Andrew,
I tried to get some information about free delivery through China Post but could’t find anywhere.
Basically, I am going to import a smaller amount of goods from China into UK for the very first time. Supplier I intend to choose says that delivery is completely free as it goes via ‘China Post Air Mail’ (taking around 3-4 weeks time). As I observed it is very common way of shipment to UK and a lot of suppliers offer that including those being a long time on Chinese market. I want to use this way as I need to save as much as possible on transportation for my trial order. My question is simple, how and when I will pay import duty fee and VAT to the Customs? Will I get a seperate invoice for that from the Customs? When exactly I will need to pay for duty and VAT? or will China Post (or UK local mail) deliver an invoice for me for duty and VAT due? Simply, how does it work with duty and VAT charges using this free shipment option.
Thanks in advance for your help!
Have a good day
Hi Jarek,
Thanks for your comment.
Yes, many sellers on China offer free shipping via China Post, especially for small and cheap items. But it is very slow indeed, sometimes it can take up to 6 weeks to show up and it doesn’t come with any kind of tracking so be prepared for lost shipments too.
As for paying taxes – these packages will be delivered by Royal Mail in UK, so you’ll simply pay VAT & import duty when you collect shipment from your local post office.
Thanks,
Andrew
[…] read your blog post on importing from China and was wondering if I could ask a couple of […]
Hi andrew im doing dropshipping currently and now i have restriction on my account due to delayed deliveries from my suppliers in china.will it be better them to just order in bulk and send it fr australia?or is there a way that i can use a more efficient cost effective postage for individual customers around the world?tnks veronica
Hi Veronica,
if you sell on eBay, dropshipping is pretty much guarantee to fail concept. You can read more about it here:
http://andrewminalto.com/dropshipping-business-model/
so yes, I would recommend you buy products in bulk (at same time getting better prices) and send them to your customers on your own. You’ll gain much better prices doing this way, offer 24 hour dispatch and quick delivery times.
Thanks,
Andrew
Hi andrew tnks fr ur quick response.im a member of dropshipcn too should i just cancel that then?also could i ask ebay to reinstate my status rather than waiting 90 days?tnks veronica
Have they suspended you for 90 days?
If so, better just to wait for that period to end.
Hi andrew they havent but i was reading forums where it says its usually about that long?does it take that long though?veronica
It totally depends on what kind of suspension you had?
Usually they say this in the suspension email you receive – whatever it’s temporary or permanent ban.
Thanks,
Andrew
Hi Andrew –
like many others on here i am starting up my own online business. Having completed my market research I’m confident that i have a good angle on things and I’m now looking at the importing aspect of the business and have taken on board the use of a freight forwarder to make my life a load easier.
Although i have read through heaps of messages and as always your great replies i am in need of clarification, a list or tick box of stages to complete. In my case i will be setting up as a sole trader and will not be registering for VAT (do i still have to pay vat if I’m not claiming it?).
Could you possibly provide a 1-10 steps of the start up process, please 🙂
The blog is awesome and has helped me a lot.
Regards
Martin.
Hi Martin,
Yes, you’ll pay VAT on your imports, even if you’re not VAT registered.
Let me know if you have any further questions.
Thanks,
Andrew
Hello Andrew,
I have been buying from my current supplier (based in china) for 7 months now never sent more than £2500 (via PP & WU), but as my business grows soon i will be sending £10,000+. What would you suggest is the safest method to send this amount to someone that i have never physically seen before. i am very sceptical about this as he is only a 2YR Gold supplier. I just feel like they are playing the long con. What would your advice be?
Thank you once again, Your a Godsend!
Sam
Hi Sam,
If you feel that they’re playing the long con, you should start looking for a new supplier asap.
Apart from that, I would stick with PayPal only OR do Escrow payments via Alibaba. Don’t use Western Union for such large payments. You shouldn’t use it even for current level payments.
Thanks,
Andrew
Hi Andrew
Thanks for your response.
Last time i tried to make a payment via Escrow on alibaba, it kept declining my debit card and i called my bank and they didnt have a clue abput what to do, have you ever heard of sn issue like this before?
You can’t use a debit card on Alibaba, only credit cards are accepted there.
ok thank you, last question which one of your products do i need to buy in order for you to help me take my ebay business to the next level?
Hi Sam,
I would recommend my EAB course:
https://andrewminalto.com
Thanks,
Andrew
Hello, I want to buy small jewelry pieces from Ali express to sell online in UK. Do I need to register as a business to sell the items online? And do I need a tax number / to import these ? What else would I need ? I’m not very business smart and would like to know that I am carrying things out correctly .
Hi Jay,
No, you don’t need to register as business in the beginning – you can import such goods as an individual, no need for a tax number or anything else. If it all works out for you and you start getting regular sales in, then you have to register as Sole Trader with HMRC. read more about this here:
http://andrewminalto.com/ebay-tax-registration/
Thanks,
Andrew
Hi Andrew,
I wonder if you could advise. I am an expat living in Hong Kong and want to sell products to UK consumers. I have no problems with finding the factories / inspection etc as this is my background. My question is what am I required to declare to the relevant UK agencies such as customs and HMRC when selling the product, as I will be classed as an exporter in HK and not an importer.
Thank you,
Peter
Hi Peter,
If you live in HK and register your business in HK, you’ll be paying taxes there and only register in UK, when you reach UK’s VAT threshold, to start paying VAT in UK. In the beginning it’s not necessary.
Thanks,
Andrew
Hi Andrew,,
Thank you for your reply, especially on a Sunday.
Am I correct in my understanding that if I shop direct to my customer and the value of the goods are under £40 then there are no import duties or VAT to be paid by the recipient ?
Thank you once again.
Peter
Please check out this guide Peter:
http://andrewminalto.com/import-duty-vat-threshold/
I am thinking of importing mobile phones from China to resell in the UK. The question is will the customs fully open the boxes, because once the sellophane wrapping has been removed and the items disturbed they will immediatley look second hand and i will not be able to sell the items as brand new.
Gratefull for any reply
Many thanks
Stuart
Hi Stuart,
Thanks for your comment.
No, customs will never open wrapped items, that is unless nothing is said on boxes themselves. And even then, they would probably contact you first, ask for more information about products, invoice etc.
Usually they just open the box if they’re in doubt what’s inside the shipment.
Thanks,
Andrew
hi I have read your blog and its fantastic well done you for putting in so much work to help others. I am trying for the first time to sell things on ebay and I found a supplier on alibaba from china and the package is 2.5kg in weight (£120 for items) and im just waiting for a quote from dhl for door to door delivery am I expected to pay anything more than for the products and to dhl i.e VAT, Customs etc and around how much extra am I to pay if that’s possible to answer with the info I have given you. Thanks in advance for your reply.
Yes, you’ll pay roughly 25% on top of that for VAT &import duty.
Thanks,
Andrew
thank you for your help and good day to you.
no worries, you’re welcome!
Hello andrew,
I have been looking around for products, and very recently I have contacted about 10 suppliers about hard drives most of the replies i have been getting they tell me to get into contact with them via skyps, then further on down they show there deals, which involve iphones etc… This is about 7 replies in a row i have had, should i stay away from these as they are advertising brand products?… Also how can people buy stuff from ebay from say Hong Kong or China and not het charged for import etc
Thanks In Advance
Hi Joshua,
Are they Gold Members on Alibaba?
yes a few (if not, all) of them are gold? and they are advertising IPhones as free gifts after spending a certain amount then they give you the individual prices.
even though the product I am asking them about is an unbranded hard drive?
Sounds like a 100% scam to me!!!
I have never received free iPhones as gifts when ordering from China, lol
Hello,
This article is something which i was truly looking for so far. Really informative.
I am planning to import little girl dresses from China like Tutu n Chiffon dresses. Is it mandatory to have IEC for that. I am working as a sole proprietr . Please let me know what percnt of import duty do i need to pay for this…
Regards,
Nikky
Hi Nikky,
Sorry, not sure what you mean by IEC?
You can calculate exact taxes on such imports using this website:
http://www.dutycalculator.com
Thanks,
Andrew
Hi Andrew
I am looking to start selling imitation jewellery in UK , importing from india. I dont have any import license and am a newbee to the entire process but a strong desire to start trading. Could you be kind enough to help or suggest what all I need to consider. Do i have to have import license, and what taxes, custom clearance etc is required. ALso if import license is necessary to import jewellery from india(even on a small scale) are there any vendors here who lend their license legitimately. I want to be trading legally.
Thanks in advace,!
Hi TG,
You don’t need any special importing licence. You can simply order goods and pay VAT and import duty (25% roughly) when goods arrive in the UK.
It works pretty much in same way as with importing from China, so feel free to re-read this article for more information.
Thanks,
Andrew
Hello
I would just like to thank you for all the time you take to help others start off,
I have read everything you have wrote and took the big step on 12 Dec to start my ebay business.
I have ordered a few times of my supplier and received the parcels them fedex have invoiced me with the Duty (No VAT as baby clothing) My first order was 1200 dollors and all was fine, My second order was 728 dollors i have just received an invoice from FedEx with duty and VAT, I have emailed them to see why this is and just received an email back stating it did not have the age of the child clothing on the invoice.
I really do not know where to go from here as i do not see why the first parcel with the same wording the invoice (Baby 100% cotton dress) came through no problem. Any help on the on this matter would be wonderful.
Hi Dawn,
Thanks for your comment.
You should call FedEx and ask whatever you can change invoice or send further details to them on items in the shipment as your order has been declared in wrong way. If you can get your supplier to amend the invoice to add age right beside Baby 100% cotton dress, that would also help probably.
Thanks,
Andrew
Hi andrew this has been most helpful reading through the posts, i just need to clear some things up if you can help,
we have been buying from china for a few months now most come through on free post, but one order has come through by dhl, if the correct value of the goods is marked on the package am i right in thinking that dhl take care of all the vat, import fees etc and we just pay them via a waybill which they send and thats it, all above board for resale?
also were looking to import and start selling sex toys is there anything we need to know in order to import these, such as licences etc ive tried looking on the hmrc sight but i cant find anthing about these products.
many thanks
Hi Adam,
Answer to your first question – YES, that’s totally correct.
As far as I know – no, you don’t need any special permits or licenses to import adult products/toys.
Thanks,
Andrew
Hi Andrew,
Thanks and keep on the good work.
I need to import some phones this company in China. Can you help do some checks about the company?
It is Shenzhen Electronic Co. Ltd. RM 1421, Green net Building. Zhenzhang Road. Huaqlang north st. Futian District. China.
Company authentication registered address number 301. Year of registration. 2005. Legal representative: Chengcheng legal firmfirm. Bureau date of issue 26/04/2008. Expiry 26/04/2018. Registered capital 1,000,000RMB. Sounds genuine?
But they will accept only Western Union
Hear from you.
Regards.
Piyam.
Any company that ONLY accepts Western Union is a scam in my eyes.
You can’t even send money via WU to a company – only to an individual!!! Any decent company will happily take bank transfers, many will take PayPal and even Escrow.
So if that company only takes Western Union, stay away from them!
Andrew
Hi Andrew
Thanks for all the information you have provided. Its really encouraging. It always appears very daunting to me trying to figure out how to bring a product to market.
I’m interested in having a product manufactured in China and go on to sell on ebay. I would like to have my own brand name on it.
Any advice you can offer on how I can do this? Do I have to pay any special taxes or follow a different process?
I have been trading as a sole trader doing various things but I have a strong desire to create and sell my own product.
Any advice will be very helpful! Help!!
Hi Ojay,
The procedure is pretty much the same as with any un-branded product you import from China.
Only thing, I would recommend that you register a trademark for your logo as sometimes Chinese Customs ask for proof of brand ownership. You can register a logo trademark online here:
https://www.gov.uk/intellectual-property/trade-marks
Thanks,
Andrew
Hi Andrew
Thats really helpful! Thank you so much….
I have found your site very informative. And the fact that you take time to reply to everyone is truly commendable.
I hope I can come back to you, if I have more questions..
Kind regards
Ojay
You’re welcome Ojay! 🙂
Just wanting to check. I have ordered one mobile phone from CooliCool at a cost of £103. The phone will be shipped from China so how much extra would I be expected to pay before it reaches my front door?
Thanks!
It will be approx. £25 in taxes when phone arrives in the UK.
[…] How to Import Products from China – More than 300 comments […]
Hi please help. I purchased a number of phones from a seller in China 10 days ago via direct payment into his bank account. After payment, the seller then informed me that I would have to pay customs tax of $380. He said that my items were stuck at china customs, and would be destroyed if customs fees were not paid. I’m really reluctant to pay any further funds as the seller initially informed me that he would cover the costs of customs fees. He refuses to allow payment via paypal.
Any help on this matter would really be appreciated.
Hi Shezzy,
Thanks for your comment.
I’m sorry to bring this up but unfortunately you have been scammed…
You’ll never see those phones or your money again. And if you send even more money, you’ll loose that too.
This is a very common scammers scheme. You should have really checked out supplier before you sent any money to them.
Thanks,
Andrew
Hi Andrew
Having read your article I am very seriously thinking of importing stock from China. My previous experience has been very limited to buying items from auction houses and reselling on eBay all within the UK.Which I have to admit has gone pretty well.
Now I have done some research into ‘hot sellers’ on eBay and am now keen to get started with a more focused target audience, however my biggest worry is ensuring that I buy legit products. As the beauty sector is prone to dodgy fakes that can be harmful I am very cautious about who I would use as a supplier.
It is proving a minefield when placing an order for stock on Alibaba as the requirement is for rather large orders but ordering on Aliexpress, which allows for more affordable and realistic small orders doesn’t allow me to be confident with the supplier as there do not seem to be the same checks available as if you where to order through Alibaba. For example; company registration number, A&V check, escrow facility etc.
As I am only beginning and have a students budget I am looking at ensuring I buy safe legitimate stock but that also allows for some profit (I guess that’s what we are all after!)
My question is, do you know of places I might start researching the buying of smaller amounts of stock from sellers who can prove they are reliable and trustworthy. This is of particular concern to me because fake beauty products could be harmful to customers and that is obviously a primary concern.
I must apologise if this is long winded.
Bw
Amy-Jo
Hi Amy,
Thanks for your comment.
Buying from Ali Express is actually safer than buying from Alibaba. On Ali Express all payments are protected by Escrow and you only release money to supplier once you have received and inspected goods. Also, there’s a feedback system in place which is usually a good indicator on any seller there.
BUT there’s another aspect – if you’re looking to buy BRANDED goods, forget about Ali Express, Alibaba and China altogether! You can’t buy branded products there! China is only good for un-branded goods and nothing else.
For branded products you want to look for UK, USA based wholesalers.
Thanks,
Andrew
Hi
Great article. Sorry I have a few basic questions. I’m looking at selling some jewellery on eBay and have bought a few bits but can’t seem to calculate whether I wll get charged this end. Firstly I have ordered a few small items off ebay, approx £1 per item, free shipping from China and Hong kong. Will I get charged this end on these items? Also I ordered some goods from ali express, cost approx £45 with free shipping, again jewellery. Will there be charges on this? Saw about keeping it under £150, should I keep my orders under this or keep under £15 with potentially no charges? Sorry bit of a ramble, hope this makes sense!!
Thanks in advance
Hi Emma,
There are few things you have to keep in mind so please check out this guide first:
http://andrewminalto.com/import-duty-vat-threshold/
Thanks,
Andrew
Hi Andrew,
Thanks so much for this post, it’s incredibly informative and I’ve already returned to it twice since finding it
I have a question about UK Import Declarations. I’m just starting out and I’m buying stationery items on Aliexpress to sell within the UK only. All my purchases are small (less than £15) the packages arrive from China with customs declaration sticker, completed by the seller.
When I read on HMRC website about importing, it mentions the CHIEF system and having to declare my imports. Is this the case for me, when it appears an export declaration has been made, should I still be declaring these goods as imports? Especially given the low value of the items.
In the future, I might start buying the same goods in slightly larger quantities – I checked the commodity code and it attracts 0% duty, and will have a customs declaration completed by the seller.
I’d be really grateful for your views on these two scenarios and whether I need to be declaring these once they arrive with me in the UK?
thank you again for taking the time to answer all of these questions 🙂
Claire
Hi Claire,
Thanks for your comment.
If you just import £15 worth of goods, you really don’t have to worry about this.
When you orders increase, courier company will do the customs clearance procedure for you and just send you tax invoice. So again, you don’t have to do this on your own.
Thanks,
Andrew
[…] was wondering if you could give me some advice. I’m looking to start importing from China and I think I may have found a profitable product to sell on […]
Hi Andrew,
I wish I had seen your blog much earlier… it was an eye opener and very informative…
May I request you to post some beginners guide stuff for exproting from India? BTW, am Raj from India looking to export Spirulina powder and hence this request…
Thanks a lot for the great work…
Hi Raj,
Great to hear you find my blog valuable! 🙂
Not sure I could provide on exporting from India though as I’m not based in India and don’t know anything about local laws and procedures…
Thanks,
Andrew
Hi,
Your article is fantastic, I have a question… Iam thinking of buying faux leather beds to sell online, could you recomend the right place/market where I can purchase.
Thanks.
Hi Yahya,
Have you tried looking for suppliers on same Alibaba.com?
Andrew
Andrew, once the supplier has sent parcel to airport, what is my next step?
Do i contact the chosen airport, and supply all relevant paper work ect?
Hi Leesa,
Is your shipment sent via a courier company or air freight?
if it’s a courier company, you don’t have to worry about anything as they take care of everything.
if it’s air freight, shipping company will contact you when goods arrive in the UK and then you have to organize customs clearance process and delivery of goods to your home.
Thanks,
Andrew
Thankyou andrew, it is via Air Freight… Once the shipping company contact me will i then notify HMRC to pay the Vat?? or will that shipping company do the paper work?
Appreciate your advise.. this site is so informative
Leesa
you’ll need to use a customs broker to do the declaration for you.
usually shipping companies also offer this service.
Andrew
[…] solution to this is to start importing products in bulk from China or another country where manufacturers are located. This is what most successful eBay sellers do to […]
great post thanks a lot, I was interested in how to get around customs taxs, I read on ebay that there’s a 98% chance you don’t get charged on ordering items on ebay from china, I have never been charged ever from china but America is a whole diff ball game Jesus there back and strict!
Anyway setting up a online business and this post helped. Thanks.
Im sorry but I do not consult on tax evasion.
And you should re-consider your business strategy if you can’t make it work when paying taxes.
Hi iv ordered some fabric from Bangkok at value of £32 how much will import tax be pls.
Hi Richard,
If the order value was just £32, you won’t have to pay any taxes when goods arrive in the UK.
Thanks,
Andrew
Hi Andrew
On the cusp of getting samples of a new product from China in readiness for importing.
This really is the most comprehensive article I have read on this topic. Many thanks.
Great to hear that Adrian! 🙂
Thanks,
Andrew
Hi Andrew
Thanks for posting a great deal of sound advice and for taking the time to answer all,these questions.
I am going to build my own house and have an idea to just buy all the solar panels, heat pumps, ply wood etc from suppliers in Chine chuck them in a container and ship to the UK filling up any space with extras I can pass on to others in the same position. The extras will cover the shipping. Do you see any problems do this?
Thanks again for your time. Richard
Hi Richard,
If you have a person in China who can do the “shopping” for you, then it might work yes. The biggest problem will be quality of materials you’ll purchase. I personally would never buy a heat pump or solar panel directly from some supplier on Alibaba for my personal house as you never know what they can send you… these items could be un-tested, or b-grade or something and last just few months.
Also, many of building materials probably require UK/EU certification to be used in your house in first place, so you would have to know what you can and what you can’t import.
Lastly, I can’t see you making much savings while doing this if you just import plywood and other cheap materials. Container shipping costs will probably eat up all your potential savings.
Thanks,
Andrew
Hi Andrew,
Thanks so much for this informative page, it was a great help to me. Can I ask you a question and it might be a silly one. I am looking at importing designed rugby jerseys into Ireland from china. I have built up a relationship with a company that I found on Alibaba. They seem great. I sent the design over and received the samples and I am really happy with them so I am almost ready to make an order with them. The total weight of the order is 93KG and the value of the items is total 4550USD. I understand that VAT & Duty needs to be added onto that but I am confused, since I am not registered for VAT, do I pay the VAT to the manufacturer in China or to Revenue in Ireland upon delivery?
Hi Ryan,
Thanks for your comment.
You’ll pay VAT and import duty in IRELAND, once goods arrive. Courier company will contact you about this when packages arrive in Ireland.
Hope this helps!
Thanks,
Andrew
Hello Andrew,
Thank you for a great guide. I am thinking of importing and selling ecigarettes on ebay. I have found a supplier on Aliexpress who will deliver free of charge via DHL from china.
I intend to start small with 200 or so pieces to start off with
In this case will I need to register on the EORI scheme, register with the CHIEF system and find the correct commodity code for HMRC purposes or will DHL take care of this for me?
Hi Paul,
Most likely you’ll have to register for EORI, yes. You can do this online from HMRC website.
As for everything else – DHL will take care of that when goods arrive in the UK. They will do customs clearance for you.
Thanks,
Andrew
Hi again
I just read my message again and realised I made a boo boo! OEM stands for original equipment manufacturer, got mixed up with the words. Sorry all
Demi
Hi Andrew
My son recently decided to import car accessories from China and hopefully if all goes well sell the on eBay. We. Have found accessories such as racing helmets, hans, racing seats, racing suits ect. All the items are FIA aprooved and the manufacturer states on the website as OEM for 15 years although only supplies on alli aba since 2012. My biggest concern is this. The items are branded with names like sparco, recaro, bride ect. Reading on one of your answers to a post you say never to buy branded items from China but looking into the OEM stands for original established manufacturer. is there any way I can find out if this is true and what kind of documentation should I be looking for? Any idea if I need a licence to bring these type of items to the UK? And if yes who should I speak to? Also when speaking to the supplier should I be open and ask them if these items are original, or knock offs? My biggest fear is bringing something to the UK and being illegal to sell.
Many thanks
Demi
Hi Demi,
Thanks for your comment.
OEM in simple words means that manufacturer can product goods with your own logo/packaging.
Now, as for Sparco, Recaro etc. on Alibaba – those are all FAKE goods you can’t import and re-sell in the UK. They’re knock offs as you say and illegal to sell.
Thanks,
Andrew
Hi Andrew
First I want to thank you for your quick reply and ask you this. If there all illegal as I suspected then why are they allowed to produce them and is it only illegal to sell them in the UK? I looked at their selling areas and 20% was in Western Europe and another 20% in North America the two areas with their largest sales. I can’t make any sense of it. Can you explain it to me please?
Thanks again
Demi
In a word – China is fakes paradise. Designer clothing, DVDs, mobile phones, handbags, sports equipment – all being copied in China 24/7. I don’t know why Chinese government allows this (I guess they just don’t care as it’s making money for them) BUT I know for sure that UK Customs, if they check your order, will destroy such goods and you’ll have to write explanations why you’re importing fake goods.
Thanks,
Andrew
I don’t know how to thank you enough Andrew! Looking forward to buying your dvd cause even though I was really disappointed with all this I still want to open a shop on eBay and will need all the help I can get. Is there anywhere else that I can reach you? I have a lot of questions (assuming you have the time for me,lol) and this page is getting very long.
Many many thank you
Demi
Hi Demi,
Once you purchase the course, you’ll get direct email access to me where you can send all your questions to.
Thanks,
Andrew
Hi Andrew, thankyou for this information…
I am wanting to import beauty products… one is a natural mascara and the other is chemical mascara, how do i know if they will be EU approved??
Many thanks Leesa
Hi Leesa,
You need to ask manufacturer/supplier whatever they have certificate that confirms the new EU cosmetics directive.
Once you get such certificate, you still need to verify it with the testing house that issued it as often Chinese suppliers make up fake certificates.
Thanks,
Andrew
hi andrew
thanks for the awesome article!
my question is some sellers on alibaba/aliexpress sell like phone cases with a brand name on them example spigen. when i asked them they are not legal in UK they say they can remove the name/logo. does it make it legal what you think?
also some korean brands like motomo legal to sell in uk?
Hi Leo,
Thanks for your comment.
IF logos are removed from the item, yes, it’s fine to import and sell them. Unless design of item is protected by IP, or it has patents registered. But with simple items like phone cases this won’t be a problem – as long as NO logos are printed on cases, you can buy and sell them.
Korean, Chinese brands – IF you’re buying from that brand directly on Alibaba, this is fine. But if from re-sellers, trading companies you have to be careful as in China – they even do copy Chinese/local brands. So you never know you get genuine product or not, unless dealing with brand owner directly.
Hope this helps!
Thanks,
Andrew
Thank you so much for sharing your very helpful experiences of how things work in practice Andrew.. They are much appreciated and valued. I totally agree with your observances. . Years of working in an adversarial system has made me tend to assume the worst.
Janet
You’re welcome Janet! 🙂
Hi Andrew
For everyone’s information the rules I referred to in my last post are Sourcing Transactions General Rules April 10th 2013
Click on escrow down left hand side of alibaba resources page then scroll to bottom of new page where all the general rules are listed to open
I have read them again and clauses 8 -12 are the important ones to focus on
8 relates to inspection and confirmation of product
9 is about sellers production of shipping document
10. Disposal of escrow funds
11 disputes
12 miscellaneous provisions and it contains a useful table summarising timescales that have to be complied with
I’ve noticed also that escrow is only available for express ie courier and shipping by sea. It seems to exclude air freight. Pay pal is not listed as an alibaba option. This may have been recently changed. Their general service agreement entitles them to change the rules by posting the amendments on the site, presumably by amending the rules, so you have to check them regularly .
I hope I’m missing something but it seems to me that there is very little buyer protection offered by alibaba and with escrow not available on air freight and loss of pay pal the situation is not good for buyers on a budget who have too much weight and or bulk b to courier and less than half a shipping container.
I would like to have another viewpoint
Janet
Hello Andrew
I would like to thank you and your contributors for all the invaluable information. I am about to import perfume materials from a trusted supplier in Bangkok and their UPS quoted cost is $980 for 25kg boxes and 1 10 kg so I am now getting my own courier quotes after reading this page.
I am also about to agree an order for around 12500 small perfume bottle from a china supplier. They are registered as a gold member for only 1 year as supplier but 9 years as a manufacturer. No references to them as a rogue trader I can find on the web and 1 5 star review on ali express for a small sale. After reading this page I decided to read alibaba escrow sale terms. I have been a litigation solicitor for 12 years. What concerns me about this escrow service is that there is a clause that deems the buyer to have inspected the goods when they pay and authorise shipment. Then when you read the timetable for action it appears you only have 15 days to authorise release of escrow money whether you have received the goods or not.
I’m going to read the terms again but it appears from the wording that after 15 days you can only raise a dispute if the seller hasn’t provided proper shipping documents.
I can see nothing in the agreement to protect a buyer from faulty goods if they do not inspect the shipment. Combined with the provisions for money to be released if no dispute raised within 15 days it seems that the escrow service only gives protection if goods are not shipped at all. Alibaba and Alipay also keep your 5% escrow fee in any event. I am now concerned about using this service.
This leaves paypal if seller will accept and the associated credit card protection. Pay pal exchange rates are the worst on the market, lower than HSBC and way below the commission free rate I get from an excellent currency trading platform with TOR FX which was very easy to set up. The larger the amount you trade the better the rate and no further commissions. Pay pal have a number of commissions which are hidden unless you ring them and ask. I haven’t worked it out as it’s a while since I spoke with paypal but I would imagine the poor rates of exchange and commissions of pay pal equate to something like the 5% escrow charge.
I also read a blog last night about pay pal dropping ali express due to the number of claims.
I would really welcome your views on my experiences Andrew. Im sure topics like this being openly discussed will help others to decide the best way for them. I’m tempted just to make an FX TT for my transaction but am looking into the cost of having my goods inspected and will read ali babas terms of inspection before I use their in house service. This may be money better spent At least I will know there is a manufacturing company and there are goods to inspect and a good but not guaranteed chance they will be shipped. I hope also I’ve encouraged others to read alibaba terms and conditions. You may have to read the important bits more than once as I did but it is doable.
Will the cost of an outside agent to inspect goods before shipping make the unit price too high for profit? Yet another consideration.
Janet
Hi Janet,
Thanks for sharing your views with us.
In general, Escrow is still safest payment method after PayPal. And much safer than doing a simple bank transfer. I haven’t actually had any problems with Escrow payments on Alibaba as suppliers who use it, are usually reliable and trustworthy. Also, many of my clients have used it with no problems.
In essence – if someone wants to scam you, they will scam you. Even with escrow, yes. That’s why finding an established supplier is the most important element here and doping a pre-shippment inspection is best thing you can do to minimise risks of getting scammed to minimum.
Thanks,
Andrew