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
Hi. Just wondered if I have a registered company in the UK but am getting a shipment sent from China to Marseille, France, as this is where I will be selling, will I encounter any problems when I go to collect my goods? Do I need to be registered in the country which is receiving the goods?
thanks for the great post
Adrian
Hi Adrian,
Thanks for stopping by.
Not sure about this one – I guess IF you import as a company, then yes – you would need to be registered in France to get customs clearance done etc.
If you import as an individual, then there shouldn’t be any problems.
Thanks,
Andrew
Hello Andrew,
I would like to first say, thank you for all your posts they are very informative and very good advice, reading them has made me start actually thinking serious about this!
I have a question, i have been looking around for products prices and comparing etc.. Just to get an idea before i jump right into it. I have came across a wholesale site where I can buy products straight from Chinese factories that seems too good to be true, as an example, i fail to find many products that actually have any shipping charge, most are free and thats all the way to the UK! Yet its a VERY costly part of this, iI looked into random products just browsing through. I found a Simpsons flash drive 8GB for £7.91 then the same supplier and same product but instead 256GB for £8.96 such a small difference for an extra 250 GB.
I’m worried i may be scammed by this site, I have looked up on reviews for this site and there was ALOT of negativity but a few were positive, saying you just have to be careful etc… They may have been looking into the wrong suppliers to buy off and had a horrible experience? If i were to share the site could you give me your professional opinion, or just your opinion from what I have described?
Thanks for taking your time to read this.
Much appreciated,
Thanks in advance,
Josh.
Hello Andrew,
I would like to first say, after stumbling upon this site, that this seems to be the think I was looking for – clear advice!
I now work in Indonesia and can see lots of potential in exporting furniture (amongst other items) back to the UK. I think I have found a company here that will source, pack and ship but it’s what happens when it gets to the UK.
Have you any advice on this?
Hi Karl,
When goods are imported in UK from a country outside EU (such as Indonesia), they will be hold by Customs until they’re cleared e.g., customs declaration is filled, import duty and VAT paid.
Most freight forwarders offer this service if you use air freight or sea freight.
If you use a courier company, they will automatically handle this for you and just invoice for service and taxes.
Thanks,
Andrew
Hi Josh,
Thanks for stopping by & it’s great to hear my blog has inspired you to finally take action!
Yes, sure! Post the link and I’ll take a look!
From the sound of it though it sounds like a scam.
But let me check the link first.
Thanks,
Andrew
Its http://www.dhgate.com
Thanks for checking it out,
Josh
ah, DHGate!!!! Well known site.
It’s pretty much same as AliExpress – there are good and bad sellers, fakes too.
If you stick with UN-BRANDED items only and buy from established sellers with good feedback, you will be fine.
STAY AWAY from anything branded there – ALL FAKES! (that includes Simpsons flash drives)
Thanks,
Andrew
I agree i wasn’t planning on buying branded i was just browsing the site,
Thanks for everything,
Josh
Hi Andrew,
Thanks for your helpful article. Our new business has just started importing from a company in China. We used Fedex door to door last time. The shipping cost more than the items! Our margins were therefore very tight. We need to get this sorted but don’t know how. We need a cheaper option – even if it takes a bit longer to get here. The do-it-yourself route is a frightening option for us since we have no experience in this area and we are some way from a shipping port (though close to Gatwick).
We order up to 80kg at a time of different items that come packed in 0.5m square boxes. To price individual items for sale we need to know the shipping costs per item. However, we only get given the overall shipping costs for the entire consignment. Is there a formula that shipping companies use involving volume and weight that we could us to help us, or is it just done on weight? We do know the weight of each item.
Many thanks for your eagerly anticipated reply,
Ben and Andrew
Hi Ben & Andrew!
Thanks for your comment.
You want to use a freight forwarding company, such as Woodland Global and get a quote for both Air freight and sea freight.
Air freight cost is more based on the weight of your shipment, even though they take volume in account too. Sea freight is pure volume, pallets or cubic meters.
If your items are more or less same size and weight, you can simply split the shipping cost equally across all. If not, you’ll work on this harder and maybe use the weight as your guidance – get cost per kg and then knowing weight of each item you can calculate shipping costs for each item.
Thanks,
Andrew
Thanks for your advice Andrew. I will contact Woodland Global and see if they operate from the region of China Shijiazhuang City.
Many thanks,
Andrew
You’re welcome!
Let me know if you need help with anything else.
Thanks,
Andrew
Wow great read!
Thank you very much Andrew.
I have 2 questions if you don’t mind.
1) I know 2 jewellery manufacturers who send in small packets of up to 0.5kg from China to EU using DHL (apparently below 0.5kg per package does not incur import tax). I guess this would work if the buyer is only selling on ebay for example right? However I was also told that the buyer also has his own website and sells to small retailers. From this I;m guessing the buyer is VAT registered? how would he do his invoices accounts etc?
2) Would you happen to know if small UK clothing retailers would be happy to buy from an offshore company? Or would they tend to shy away? IF so why?
Many thanks in advance
Hi Sammy,
Thanks for your comment.
1) VAT/import duty has nothing to do with parcel’s weight. It’s all about order’s value (if you don’t want to play any tricks and avoid taxes).
B2C or B2B – it doesn’t matter – you have to pay VAT and import duty on imports that qualify for tax, otherwise you couldn’t get your books correct.
2) Sorry, but I’m not involved in clothing industry so can’t comment on that.
Thanks,
Andrew
Hi Andrew,
Id like to seek your advice. Im just starting out importing products from China to the UK and use a Courier such as DHL as Im ordering small volumes under 500. The items are also small so the shipping cost isnt too bad. DHL automatically charge you the customs charges in the U.K but are there any additional charges you must pay as an importer. How would I go about paying these charges? I was reading that we should pay VAT..
Also Im looking at Electronic items and hear some need CE Certificates. Do you know who I can contact to confirm if the product Im importing needs a CE Cerificate or not. Its difficult to know if they need one or not.
Best Regards
Chris
Hi Chris,
Thanks for your comment.
DHL will charge you VAT and import duty and send you an invoice. So you don’t really have to worry about mechanics behind these, customs clearance etc. when using courier.
As for CE certificate, you want to contact Trading Standards with your questions:
http://www.tradingstandards.gov.uk/
Thanks,
Andrew
Hi Andrew,
Sorry if you have already explained above but tried reading through it but may have missed it. But I have used a online duty calculator to work out what duty I must pay but when asked for product value does that mean the value of each piece or the total cost for all pieces? It would be most beneficial if you did say the former! 🙂
Also in regards to costs I.e eBay, Paypal, shipping, import tax – are they all tax deductible expenses
Thanks,
Alan
Hi Alan,
Thanks for stopping by.
Total cost for all pieces, yes.
Yes, all those costs are tax deductible.
Thanks,
Andrew
Hi Andrew
Your blog is fascinating thanks. I am presently based in Egypt and am intending to start a business sourcing goods from here and selling on Amazon EU by using their fulfilment center in the UK. This is the first time I have done this sort of business. I was intending to focus on home ware items. as this category is open to new sellers without permission of Amazon.Do you think goods such as cushion covers, cotton sheets and towels, wooden salade bowels would be good products to sell online?
I understand that if you register for VAT as a company you can reclaim this back from HMRC, would you advise such a course as would save me money in the long run?
Also in order to sell on Amazon you need barcodes and EAN numbers. Is my understanding correct that I can simply register with GS1 UK to print these out ? I was intending to purchase a scanner to make sure that the goods scan and to validate the barcode. Can you obtain an EAN number for any product or do they have to be of a certain standing. I have not heard of EORI no but will do some research on this.
Many thanks .
Hi Zane,
Thanks for your comment.
* Yes, I think those kind of products are perfect for Amazon marketplace, especially if you can source them cheaply in Egypt and offer something different to what’s already on offer.
* Check out this guide about registering for VAT:
http://andrewminalto.com/ebay-tax-mistake/
* Yes, you simply register with GS1 UK to get codes and then you can print them out, use on labels etc. You really don’t need a scanner to test them out as any proper bar code printing software will print out workable labels.
Thanks,
Andrew
hi andrew,
how do you verify a supplier on sites such as alibaba? any other tips as to who is a good supplier?
also is vat charged for childrens clothing? is vat always 25% price paid?
thanks.
Hi Murray,
Thanks for your comment.
Check out this guide for Alibaba supplier verification tips:
http://andrewminalto.com/alibaba-scam-exposed/
Children’s clothing is VAT 0 rated. More info here:
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_CL_000138&propertyType=document
Thanks,
Andrew
thanks, this was very helpful, so what extras would i have to pay after the fob price if its childrens clothing?
also after checking/verifying, if the supplier doesnt accept paypal or escrow, how do you go about doing a bank transfer or letter of credit?, is it better to use these methods what with fees from paypal/escrow?
many thanks for your time
is it just alibabaexpress that is protected by escrow? cs on alibaba.com cant seem to find any, also if they are listed as manufacturer and trading company is this ok for it being true bulk?, so i know as to build up to a big order.
sorry i have too many questions
Hi Murray,
If company does not accept PayPal or Escrow, you’ll want to use wire transfer, via your bank. There’s NO protection for this payment so make sure you have done your home work and checked supplier properly.
There’s Escrow function on BOTH AliExpress.com and Alibaba.com
Manufacturing & Trading company – yes, this is totally fine.
Thanks,
Andrew
Hi
I am thinking of selling small amounts of Jewellry imported from China on my market stall in the UK. After reading all the above comments I am rarther bewildered by it all … I intend to slowly build my stock over time and would never exceed spending over £100 per transaction … Is it likely that I would have to pay import fees and VAT on such small transactions ??
Hi Paul,
Thanks for stopping by.
It’s law Paul, I can’t tell you anything else apart from what’s in law. If you import for your business, even if it’s £100 you have to pay taxes.
Don’t waste your time trying to come up with ways to avoid it – just work in those 25% on top of your prices and make it work.
Thanks,
Andrew
Andrew,
Reading your comments here I am a bit puzzled as to when EORI number and at what stage is required?
if I import first time from China x 200pcs=£1000, do I still need EORI number for this or is there any way to avoid it?
Thanks
Hi Angela,
Thanks for your question.
If you do a £1000 importing deal, then yes, you’ll need to get an EORI number.
Lately, from what I have seen, EORI number is needed for most shipments that are worth more than few hundred pounds.
Thanks,
Andrew
Hello Andrew
hope you can help with this question,i have been Looking on alibaba for a branded item Makita power tools
will they be 100% fake as I thought makia was made in china,i did read one of your relays above
IF it’s a BRANDED item coming from China, it’s 100% FAKE!!! You can’t buy genuine branded products in wholesale from Mainland China. You’ll either get fakes or receive nothing. China is only good for un-branded stuff.
thank you
gordon
Hi Fraser,
Thanks for stopping by.
Yes, they will be 100% FAKES, stay away! Makita items can only be purchased through their official distributors.
Thanks,
Andrew
P.S. It’s a Japanese company, not Chinese. Obviously, they do manufacture in China too but that doesn’t mean you can get these items directly from China. iPhones are also made in China, so….
Great blog Andrew — was unaware of the Air Courier/Air Freight distinction and all that implies for customs clearance, so thanks there!
One issue I don’t think that I see considered here is that of import VAT when supplier postage is listed as ‘Free’. Does 1) the courier/customs here add a real, derived or assumed postage sum to the whole for VAT calculation purposes, or 2) is the VAT simply calculated on the value plus Duty? Given that few things in life (and certainly business!) are ever truly free and the postage cost to the supplier will be factored into the sale price, if ‘1’ above is the case then it will be necessary to ask the supplier to change their stated item value to show the postage component, no?
cheers,
D
Hi Dave,
Thanks for stopping by.
1) It may depends on how customs agent forms this but logic tells that if shipping is free, they won’t take that into account and just tax the full amount as product’s cost. So for example if you ordered goods for 100 pounds with free shipping, import duty will be calculated from 100 pounds and then VAT from goods cost + import duty.
2) In your example yes, as there’s no shipping cost.
If your order is quite big, then yes – it would be worth asking supplier to show a separate shipping fee to reduce import duty.
Thanks,
Andrew
Hi Andrew, I jus wondered if you had any idea of the cost associated with a shipment of surfboards from China? There will be 10 items approximately 11feet by 3feet by 12inches x 10. They will be coming into Marsaille harbour, France? Do you think that the cost of a forwarding company is in the region of 25% of sale price?
thanks
Hi Adrian,
Thanks for your comment.
The freight cost has nothing to do with sale/product prices. All it matter is how much space those items take up – pallets, cubic meters etc.
Just contact a freight forwarding company to get exact price for sending your order.
Thanks,
Andrew
Hello Andrew
just been visited your site, its really great and useful experience for me as a beginner on eBay business.
we have great feedbacks from whoever bought from us,(100%)
at the moment we are not stable on selling, some time we even not selling one product for 2 to 3 days though the selling price is cheaper, what will be the best step to improve my sales.
Hi Rifat,
Thanks for stopping by.
Without knowing more information about your business, items etc., it’s hard to tell but if you have just few listings, best way to increase sales is to simply add more products to your range and list more.
Also, if you’re not a TRS yet, get it asap as that will help you greatly in search results:
http://andrewminalto.com/top-rated-seller/
And make sure your listings look spot on:
http://andrewminalto.com/perfect-ebay-listing/
Hope this helps!
Thanks,
Andrew
Just want to say what a helpful and informative site, especially the tax calculator.
Thanks.
You’re welcome Jenny!
Thanks for stopping by!
Andrew
Hi
Quick question
If I ordered items from Hong Kong that were Free Shipping (stated FOB) but ask for DHL $53.27 / ems $35.64, or some other delivery company, will those items be delivered to my door with everything taken care of?? are there likely to be further charges??
Thanks
Geoff
Hi Geoff,
Thanks for stopping by.
Yes, if you use a courier company for shipments from China, they’ll take care of customs clearance and deliver package to your door.
As for additional charges – depending on the value of goods sent you’ll have to pay VAT and import duty. Courier company will contact you about this and send you an invoice for these charges.
Thanks,
Andrew
Hi Andrew, hope you can help with this question, nothing to do with ebay etc. I am starting a new business and have found a manufacturer in China who can make and ship the items around the world for me, simply I find a buyer sell it and he ships it out for me.
What I need to know is if I register for VAT in Ireland do i charge everyone 23% vat on goods, even if they are outside the EU?
and how would I claim back vat for products made in china?
Thanks any help would be great.
Pat
Hi Pat,
Thanks for your question.
Unfortunately I won’t be able to help with this one as I have never done it…. You will have to ask an accountant for best ways to form your company, taxes etc.
Sorry about that.
Thanks,
Andrew
Hi Andrew,
I am looking forward to import 40hq from china. Freight part i am not worried as i got CNF prices from suppliers. I am just concerned about the overheads after container reaches port. Can you please give an idea of about how much expense will it take to make my container reach my warehouse excluding VAT (which i know is 20% and there is no duty on my products). In clear way loading and unloading, transport charges, port charges, custom clearence charges by agent and any other hidden charges. I hope you can clearly find out about what i want to know.
Thanks in advance
Hi Kamal,
Thanks for your comment.
It’s hard to tell exact costs as it will depend on who you use for customs clearance, how long your container stays at port (port warehouse charges can be quite high), where you need to deliver container in UK and so on. It will be at least several hundred pounds but just to be sure, contact a freight forwarding company who can give you an exact quote and organize everything for you:
http://www.woodland-group.com/division/woodland-global
Thanks,
Andrew
Hi Andrew,
Thanks for your reply. Can you suggest some few cheap n reliable freight forwarders so i can have a personal meeting with them as i am looking forward to play in big volumes. Mostly will bring goods to liverpool port and be delivered to manchester.
Awaiting reply
Kamal
Hello Andrew,
I am sure this blog really helps me alot during import goods from China.As i want to import agricultural sprayer from china in a 20ft container by seafreight so i am very much confused about shipment and custom clearence.Please suggest me the best way to get rid of this.I must value your words.
Thanks and Regards
Ashish Mangla
HI Ashish,
Thanks for stopping by.
As explained in the post, when importing from China and especially when using sea freight, your best bet is to use a freight forwarding company who will take care of everything, including customs clearance.
Contact WG and they’ll happily provide you with a free quote and terms:
http://www.woodland-group.com/division/woodland-global
Thanks,
Andrew
Hi Andres
I am based in the UK and looking to import from China and have been checking out Alibaba. All the prices I have seen have been in dollars. How does it work? do you have to convert from dollars to pounds sterling first or do the companies accept pounds sterling. How is the price calculated?
Regards
B Harrison
Hi There,
Thanks for your comment.
It depends on what payment method you use:
* With PayPal, it will automatically convert pounds to dollars when you make the payment.
* With a bank transfer – basically same thing – at bank they’ll convert the sum you need and send money in dollars. With large amounts, it’s a good idea to find an online currency exchange to get a better rate.
Thanks,
Andrew
Hi Andrew,im looking to sell children’s Un branded clothing which I intend to import from China. If I use a freight forwarding company will I be made aware of all costs before delivery as I don’t wish to be landed with a large bill to receive my goods. Also do I need to obtain an EORI if I am using a freight company & my business isnt registered yet? I am grateful for any advice you can give me.
Hi There,
Thanks for your comment.
1) YES! Just ask them for a Door to Door quote and you’ll know exactly how much you’ll have to pay for such shipments. Please note that VAT & import duty will be excluded from this quote. You can always ask freight forwarder to do a quick calculation on this too for you.
2) YES! if the order is decent sized and you’ll be using a freight forwarder, you’ll need to get an EORI number too.
Hope this helps!
Thanks,
Andrew
Hello Andrew
A very informative blog I must say.
I just stumbled upon by accident and what a find!!!
I have been searching for usb storage on Alibaba for few days. The idea is to sell on ebay and make some extra cash in these hard times. Some quotations were far too low (ive heard if its too good it aint true) but they directly came to my email.
Once I ask them to reply to my alibaba message centre they don’t contact you back!
I am aware that the reliable sellers are gold standard ones.
I have found a supplier who is a gold standard for last 2 years and has replied to all my questions.
However the mode of payment he is willing to accept is TT or Western union. Does it ring any bells?
Or should I stick to only Paypal and Escrow suppliers?
Many Thanks
Piyush
Hi Piyush,
Thanks for your question.
Unfortunately it’s not that easy to answer it….
There are legit suppliers who take only wire transfer and there are scammers who take PayPal. With memory products you have to be EXTREMELY careful as many suppliers sell fake memory (lower capacity than advertised). Also, stay away from any branded memory products as they all will be FAKES.
Only thing I can recommend you is find a long established supplier, at least 5th year Gold+, order some samples, test them and then increase your orders gradually and continue testing products you receive, IF you plan to place a bigger order, get product pre-shipment inspection done.
I wouldn’t buy any memory products from a 2nd year Gold supplier. This market is simply too risky to deal with new companies.
Hope this helps!
Thanks,
Andrew
Hi Andrew,
First off, great blog and just in this blog post and comments alone I feel more confident about starting importing from China.
You have touched on RoHS and the CE mark for importing into the EU. What I wish to do is import electronic components from China, items such as LEDs, resistors, and other prototyping parts for a kit I am putting together for the hobby electronics market. I have found all of the parts I want and am going to build some prototypes to sell on ebay to see how I go.
I have asked some of my suppliers for certificates of EU RoHS compliance all of which have supplied them – how do I know these are genuine? Some are just emailed. I have potentially one regular buyer for my kit already but this organisation will require that I supply certificates of compliance. What would kill my business is if I had to test each part at huge cost so I would rather it was done at source.I notice on Alibaba etc some suppliers state they are RoHS compliant is this verified do you know? Is there any other advice you can offer?
HI Gawain,
Thanks for stopping by.
This is quite a complex topic as answer depends on what kind of items exactly you’re importing and then what kind of EU and UK regulations/certificates they need to pass.
I would recommend you best contact trading standards office and find out exactly what you’ll need to import these items safely:
http://www.tradingstandards.gov.uk/
Thanks,
Andrew
Hi andrew I’m tarting to start my own business buy buying things from china etc and sellin on eBay I was talkin on alibaba found a product and bought a sample paid 80usd through WU and just saw wat u said about if seller using that it cud be scammer how u tell who’s scamming and who’s not ????? I have another supplier that and it a branded item through same WU is there any way of telling if it fake ??? I checked there compNy website and name matches skype nd name on site matches it but cud be it a fake website ?? Plz help
Hi Jamie,
Thanks for stopping by.
In general, WU is NOT a payment method you want to use when dealing with suppliers in China. Why?
1) It has no protection whatsoever;
2) When you pay via WU, you actually send money to an individual, NOT a company! What this means is that even if the company is legit, an employee could still scam you by receiving money and then simply leave the company.
With that being said, it’s ok sometimes to use WU for SAMPLES ONLY! That is if supplier doesn’t accept PayPal and the amount of transfer is very small, like $30 or $40. WU is simply cheaper and quicker than wire transfer, hence it’s ok for such small payments for samples.
IF it’s a BRANDED item coming from China, it’s 100% FAKE!!! You can’t buy genuine branded products in wholesale from Mainland China. You’ll either get fakes or receive nothing. China is only good for un-branded stuff.
Hope this helps Jamie!
Thanks,
Andrew
Hi Andrew
Great advice!. I have just recieved quite a large shipment from China for the first time. The seller said that shipping was “free” however I have just recieved an invoice from the company that cleared customs for me and the shipping comany has agreed fees of over £900 before tax or customs fees (a further 500)
These fees are for terminal handling, delivery order, china import SRVC charge, temp ROE differential, and bunker adjustment fee. I have queried it with the UK company and they checked with the shipping company who OKd the fees. I am going to contact them direct but wasn’t sure if you had any further advice?
Fin
Hi Fin,
Thanks for your question.
Yes, this is totally possible – £900 if the order is decent in size is nothing surprising…
The shipping alone (via sea freight) is actually very cheap – all the added port fees, sur-charges etc. adds the number up!
It’s a shame though that this came to you without warning. That’s why I always recommend using a freight forwarding company for all shipments from China so that you get an exact number for a DOOR to DOOR delivery. This way you know exactly how much you’ll pay, including VAT and import duty.
Thanks,
Andrew
Hi Andrew
To be honest, I am really fan of you and your work and your passion to help other people.
I used to do import and export business when I was in South Asia, where I am originally from.
Now I would like to start importing electrical household goods from China and set up market with own brand in UK. The different thing is I am planning to sell such products to the local retail outlet like, Tesco, Robert Dyas, or Asda for instance.
on this situation, would you please advise me how can i approach these company’s purchasing department and what are are the things that I should consider to start up ( i.e legally matter in UK ,supplier contract etc ). I am pretty much aware about pricing, costing and distribution , warehouse matter.
Thank you very much and really appreciated.
Regards,
Pintl
Hi Pintl,
Thanks for stopping by.
I don’t have experience really dealing with such big retailers so won’t be able to help you unfortunately… I am working with independent stores though as for my product lines they’re more suitable but it’s a whole different game as with independent stores it’s pretty easy to get in touch with a manager or even store owner to make such deals.
Maybe try doing some Google search or check out UK’s wholesale & trade forums to find more valuable advice that would help in your situation:
http://www.thewholesaleforums.co.uk/
http://www.ukbusinessforums.co.uk/
Sorry, not much of a help, I know!
Thanks,
Andrew
Thanks a lot Andrew. Beautifully written.
You’re welcome John!
Dear Andrew 🙂
I have one more question. Hope this is the last one 🙂 LOL
I want to order some fabric from China to make clothes and then sell them online. I haven’t register my business idea yet. Could you please advice if I should register it or wait till I start making money? If I register it, do I pay taxes, VAT etc straight away?
Thank you 🙂
Hi Marta,
No worries – you can ask as many questions as you want!
You don’t have to register yet at this stage really – you can do it of course but I would recommend you just get started and then register when you see that your business idea actually works. By law, you have 3 months time to register your business (in UK) from the day you start actual trading.
You’ll pay import duty and VAT on imports whatever you’re registered as business or not.
Thanks,
Andrew
Thank you Andrew! I don’t know what would I do if I haven’t found this forum. You are a star!
Good work on the blog. I have 2 questions for you however. Firstly, if I used a courier such as dhl, do I have to worry about declaring the goods etc? Secondly, if I use a courier who charges me a price per kilo, what advantage is there in buying in bulk other than perhaps negotiating a cheaper deal with the supplier?
Thanks in advance.
Hi Robert,
Thanks for stopping by!
1) No, if you ship via a courier company, they’ll take care of customs clearance and will just invoice you for taxes and small processing fee.
2) Because there’s a base cost with couriers and each additional kg usually cost less. Meaning the bigger the package, the less you pay PER kg. For example, a 2kg pack would cost $80 ($40 per kg) but 50kg shipment, just $$400 ($8 per kg).
So it does make sense to order more to save on shipping fees, even when using a courier service.
Thanks,
Andrew
Thanks for quick and well explaned reply. Keep up good work.
You’re welcome Robert!
[…] When you do your calculations, don’t forget about VAT and import duty. You can read more about this in my importing from China guide. […]
Hi Andrew,
Your article and the replies to your visitors really cleared my confusion, and for the first time I am able to narrow down my questions 🙂 and Thank you.
I was under the impression that when you order from an Alibaba supplier (I’m talking about products/ amounts small enough for Courier such as Fedex and UPS), that the supplier pays the courier and the courier takes care of everything up to your front door. Then you pay the total amount to the supplier.
I say that as I made an inquiry and the supplier quote me a break down plus total cost. If I assumed wrong then if anything goes wrong with the delivery, bad product quality etc,…you can only go back to your supplier in regards to the product not the delivery cost…I’m sure im confusing you, but I hope you make sense of it. Thanks again, your help is much appreciated.
Kind regards,
Nate
Hi Nate,
Thanks for stopping by.
But that’s actually what we usually do – we pay courier fee to supplier and supplier arranges courier shipping. First of all this is cheaper and secondly – quicker and easier for you too.
Only with Air freight and Sea freight we introduce freight forwarder and take shipping in our hands.
Even with couriers you can of course use your own courier account but in most cases you’ll end up paying more than price Chinese suppliers will quote you.
Hope this clears it up.
Thanks,
Andrew
Thanks for the quick reply Andrew.
That was the answer I was hoping for, because that way if anything happens the supplier is responsible. Thank you.
Kind regards
Nate
Hi,
Thanks for a really informative blog i took a lot from it.
I am not only a first time importer but new to business also! I have a few questions i hope you can help me with.
I am looking at manufacturing my own branded product, its very light in weight and will come ready packaged. The MOQ will be 1000 and i estimate the weight to be around 50 – 60 kg total in 2-3 parcels. I have been looking at courier services and the prices are really high! what is my best option here? what should i be expecting to pay? an average figure would be good to go by.
I am not a registered business as this i am very much in the start up phase. will i need a EORI to get my shipment through customs? Are there any exceptions? or does anything coming into the UK through customs need a EORI regardless?
When working out your costs and pricing how would you come to a trade & RRP price? are there any hard & fast rules?
Thanks so much for your time.
Kind Regards.
Lucy.
Hi Lucy,
Thanks for stopping by.
If it’s 50-60kg in 2-3, your best bet would be to use Air Freight service for this. Try getting quote from WG for this:
http://www.woodland-group.com/division/woodland-global
Couriers are more expensive, yes, but if those boxes are not super large, even using a courier service shouldn’t cost more than 250-300 pounds.
Yes, you’ll need an EORI number if you import such goods, even if you’re not registered as a business.
Pricing – this is too complex question to answer for you here via a blog comment.
Thanks,
Andrew
Hi Andrew,
Thanks for allowing me to pick your brains & taking the time to respond to me.
Kind regards
Lucy.
You’re welcome Lucy! 🙂
[…] stock bought from UK suppliers, imagine what kind of profits margins you can achieve once you start importing directly from China. You’ll definitely open yourself up to a whole new level of opportunity BUT there are some things […]
Hi Andrew
I am hoping to start importing goods in the next couple of months and I have approached several suppliers and received loads of replies and quotes (some more coherent than others!) Having looked at their replies, for me the biggest area of concern is the minimum order quantity that many of them specify.
My budget is likely to be around £7k but that’s inclusive of shipping costs, import duties and everything else so my net spend will be considerably less. I want a good variety of different products and many come in different shapes, sizes and colours so my spend per item will only be a few hundred dollars at best.
And that is the problem – many suppliers want orders in the thousands or tens of thousands of every item and even every size and colour! One single order could easily wipe out my entire budget and I don’t want to be lumbered with thousands of identical products that will only sell at a rate of a few a day.
So is £7000 really enough to start serious importing from China? Sites like AliExpress and DH Gate are useful but I don’t make a profit when I order from them due to the higher unit prices. To be fair many suppliers on Alibaba do accept low order quantities but will the higher prices and shipping costs then increase the price per unit to DH Gate/AliExpress levels?
Many thanks and sorry for the long message!
Paul
Hi Paul,
Thanks for stopping by.
£7k is def. enough to start importing from China. BUT you have to forget about the concept of importing all kinds of items at low quantities. That’s NOT how you make money online!
You want to buy in try bulk, directly from manufacturers or at leas good trading companies that offer decent prices. You want to start with few (1-5) products and buy them in bulk. Usually, with most suppliers you can order 100 or so, for cheaper products it can be 500 or 1000. Either way, this is how it works and this is what you have to do.
MOQs can almost always be negotiated by at least 50%. Also, there are trading companies who will deal with lower quantities – so options are out there.
To sum it up – forget about buying loads of various items and concentrate on just few good sellers you can then afford to import it true bulk.
Thanks,
Andrew
First real help for importing I’ve seen in a long time. Prices seem correct etc so a great help to people wanting to take the plunge.
My question is I’ve been importing from one company for 2 to 3 years (5,000 to £10,000 per year) and guess I was lucky when I ordered from them as they weren’t a scam company.
Looking to extend my range of items so need new Chinese suppliers. My question is how do I pick the good ones from the scammers? Is there something I should look for (the paypal advice was a help), or websites that I can trust to be honest in their appraisals of suppliers. If using alibaba.com what should I look for there, It seems you can buy a badge of honor for a price?
TIA
Hi Simon,
Thanks for your question.
Yes, I have created a 10 filter process for this:
http://andrewminalto.com/alibaba-scam-exposed/
Thanks,
Andrew
Sorry to bother you again dear Andrew! Thank you for your patience and time.
I want to sell some baby clothes, faked jewelry, phone cases, scarf, baby shoes, pens.
All sellers say that they can’t offer me the certificates.
Do I have to test all of them in UK?
Or I just need to test some of them in UK?
Thank you very very very much!
xx
Huanran
Please contact Trading Standards to find out exactly which products will need testing done. Testing houses you can easily find via simple Google search.
Thanks,
Andrew
Thank you for your kind reply, I will contact with them, I wish they knew as much as you 🙂
Take care
Huanran
Hello dear Andrew, your article is great, it almost covers all the aspects that a importer need to know,you gave me the confidence lead me to a bright way to do the import business. I was frustrated this afternoon because I was told that eveything (from China) I sell in UK, I have to have the products tested or let the business standarad people examine the certificates are real or not. To have the test wll costs a fortune. Can I ask is it true to have all the products tested before selling? Thank you very much, look forward to your answer. xx
HI Huanran,
Thanks for your question.
Yes and NO.
There are product groups that need special certificates/testing, such as kids toys, cosmetics and electronics while many other product groups do not require this. You should check out Trading Standards website for more information:
http://www.tradingstandards.gov.uk/
Reputable, long established Chinese companies, in many cases, will have these tests done and certificates in place. BUT you have to verify them as there are many suppliers who fake these.
Hope this helps!
Thanks,
Andrew
Thank you dear Andrew,you help me a lot!
I was looking for the answer for about one month and nobody gave me a clear one. You give me straight away!
Can I ask do I have to show the certificates when these products arriving in UK, please? Thank you 🙂
Sorry to bother you too much 🙂
Thankk you vey much! x
Hi Andrew
Many thanks for your prompt reply, which I found useful.
I was recently at the Canton Fair, and met my potential suppliers – they were happy to let me have a test order with small quantities (<100), but were clear that subsequent orders would need to be at least 1000 pieces (might struggle to fit all of these at home).
On pricing, I found that they were willing to reduce by c.5% for larger quantities but not more. The overall view of many I met there was that China was fast becoming an expensive a place to source goods from.
Would you have covered negotiating strategies with Chinese suppliers in your previous posts (or in the EAB series)?
Many thanks again
Monti
Hi Monti,
Expensive or not, still – China is the cheapest place to get most of un-branded products.
As for negotiating – I have had same experience – the more you buy, the smaller price you get. Apart from this, most manufacturers are not interested in going down on price just for sake of it by more than 10% or so.
There are always exceptions though.
Thanks,
Andrew
Hi Andrew
I enjoy reading your blog. I am considering starting a new business, importing an electronic item from China. Once I have a handle on all my costs, and if this still makes a good margin, then to test the market, I will order a 100 items to sell online.
I plan on storing the items in my garage initially (so may need start paying business rates!), but when this takes off, I’ll need more space in a warehouse, increasing the cost base further.
My questions are:
a) Would you know if it is possible to rent out a small section of a warehouse, and what sort of cost may be reasonable per cubic meter?
b) What was your ‘inventory storage’ strategy when you started out?
c) Would you recommend a product such as Fulfilled by Amazon as an alternative to warehousing?
d) Finally, for the test phase, would you set the selling price to include any warehousing costs that may arise in the future, or would you sell it lower initially (because I do not currently have any warehousing costs)?
Would appreciate your advise.
Keep up the excellent work.
Best – Monti
Hi Monti,
Thanks for your comment.
I’ll try to answer your questions one by one:
a) Yes, it’s possible but cost will vary GREATLY based on location, company, size etc. etc.
b) When I started out, I simply used my bedroom to store goods. For a very long time actually as I believe you have to keep costs down as much as possible in the beginning.
c) Yes, fulfilment houses can be great for some type of products (not many different products, decent value and margins). But for people who just start out, I rather recommend just getting a small self storage unit for goods storage. This will be cheaper and you keep 100% control on order processing.
d) Yes, you can do this but it will increase your final price. In future, you should be able to buy stock in greater quantity which will reduce your cost price, leaving more room for expenses such as warehousing and employees.
Hope this helps Monti!
Thanks,
Andrew
Hello, I’m currently studying in the UK but will go back to Russia in 2,5 months(where I’m originally from).
We’ve got an importing football business back in Russia(buying on AliExpress selling in Russia). But we buy branded things in China, so I don’t want to do it in the UK as I may be chased by the government because of trading illegally.
So, I decided to buy Iphone cases and sell them in the UK. Can you please tell me if it is legal(as far as I know, Iphone cases are not branded) and when I place the order, does it include VAT and any other fees automatically?
And, besides, do you think if it’s worth doing it as I’ll leave in 2,5 months?
Hope to hear from you soon.
Thank you, Nikolay.
Hi Nikolay,
Thanks for stopping by.
Is it legal to sell FAKE goods in Russsia, lol? 🙂
Anyway, iPhone cases are ok to import from China as long as they don’t carry any trade marks and other intellectual property – company logos (Apple), musician photos, movie star photos etc.
Only designs/graphics/plain colours are ok.
You’ll pay VAT and import duty when goods arrive in the UK. Courier company will calculate all this for you and you’ll just have to pay the invoice.
Is it worth doing it?
Depends on where you plan to sell these cases. If you think eBay, forget about it! Competition for such cases is EXTREME and you won’t be able to do anything in 2.5 months time.
If you plan to sell them offline, via market stalls etc., then of course it can work if you get large selection of cases and can offer decent prices.
Hope this helps!
Thanks,
Andrew
Thank you for the reply.
In Russia it is not legal but no one is gonna chase you if you do it online. So, there are some ways to cope with laws 🙂
But If I order football pillows, towels, football bed sheets with team logo on them, is it fine? Since, there won’t be any logos like Nike, Adidas etc.
No, it’s not fine. Team logos are also copyrighted! Products with team logos must be licensed and ones that come from China are NOT licensed!
More on that here:
http://andrewminalto.com/wholesale-disney-items-from-china/
Thanks,
Andrew
I used a company for shipping called Fenix freight.com
They were absolutely brilliant .
From collect to delivery . These guys knew their stuff and saved me a lot of money on shipping .
Now I am bring in more products by air and see.
Credit where credit is due.
Great website
Thanks
Jh
Hi James,
Great to hear that you have found a trust-able freight forwarder!
It makes importing SO MUCH EASIER when you don’t have to worry about shipping and customs clearance.
Thanks,
Andrew
Hi Andrew great article. I am shipping products to Ireland from china for the first time too. I plan to sell on email but the kind of product it is is fairly new and I’m afraid it won’t get searched enough on eBay. My question is am I able to sell to retailers/shops if I don’t have a company?
Any feedback appreciated.
Thanks
Hi Colm,
Thanks for stopping by.
Most likely no – retailers usually don’t buy stock from individuals, so you’ll want to form some sort of business to do this.
Next Monday I’ll have a post on how to do research for products that are brand new and not selling anywhere currently.
Thanks,
Andrew
Thanks for the reply Andrew.
What do they mean when they ask “the ce and rohs in the eu market, is it available?”
Those are quality certificates needed to sell that product in EU.
*ebay not email
Hi Andrew,
I’m starting to sell on ebay a certain product that I believe will sell quite well online as the demand will be fairly high. I am going into baby products i.e. clothes/accessories and I was looking at the import/VAT duty. I have found out that these types of products will only require 12% import tax and are exempt from VAT. This allows my profit margins to improve. The question I was going to ask is that I am just starting out with no previous expeience in business and was wondering whether I would need to register a business so I can get the items through customs?. I want to start slow and build the business up through profits. I am buying from china and would appreciate any advice/ideas you may have that can improve my profits/knowledge.
Thanks
Mat
Hi Mat,
Thanks for stopping by.
No, you don’t need to be a business to get such shipments through the customs, don’t worry about that.
As for improving your your knowledge, if you haven’t done it already, sign-up for my EAB course which will teach you importing from China and selling on eBay business in a step by step videos:
https://andrewminalto.com
Thanks,
Andrew
Hi Andrew,
I am also looking at Alibaba to source products from, however I don’t understand 1. Where the shipping price is quoted and 2. How do you organise a courier/freight and when does the money for it come out :s ?
Do you input the shipping address and they add it to the total cost?
Many thanks
Hi Rachel,
Yes, you simply ask supplier to get you a quote in case of courier shipping, and this fee will be added to your invoice.
On the other hand, if you use a freight forwarder company for sea or air freight shipping, you would contact them once your order is ready so they can pick it up from supplier and send it to UK, clear customs and deliver to you.
Andrew
Hi Andrew
Great article, I have found a few suppliers that have stock I need that offer free shipping from china, it does take about a month. I can get over this factor as I can order well in advance to keep my stock levels up. Most of my goods are small items but I will be buying in bulk, like 100 pieces at a time, the cost from each supplier will be around the 100-150 pound mark. If I order many shipments at this cost will I be able to avoid import duties and vat as the shipments are low, is there a limit that I can receive without paying these fees, if so I could do quiet well, any advice would be greatly appreciated
Hi John,
Thanks for your question.
IF you’re importing such products for business purposes, for resale on eBay/online, you have to pay import duty & VAT on full value, no matter how small you split these shipments.
Otherwise you won’t even be able to do book these invoices properly accounting wise.
So forget about avoiding VAT and import duty – that’s part of importing process and expense, you have to learn to deal with from day one.
Thanks,
Andrew
Hi Andrew
A friend is importing from China through FedEx but is worried that he isn’t paying the correct import duty/VAT. He says the parcels that he receives show a lower value than the price he has paid. If he pays what FedEx invoice him for, then has he fulfilled his obligation. I assume so but would be grateful for clarification.
Thanks
Dave
Hi Dave,
Thanks for stopping by.
In cases like these, he has to contact Fedex or HMRC directly and pay the difference in taxes. If he doesn’t do this, he’s breaching the law + he can’t even technically book such invoices from accounting perspective.
Chinese suppliers often declare lower value, that’s why I always ask them to show up REAL value on the package/invoice, to avoid this problem.
Thanks,
Andrew
Thanks for the reply Andrew. Any idea of which HMRC department to contact. I’ve spoken to them on his behalf and they seem to have as much idea as me!
[…] You import that product in TRUE BULK from China, via Alibaba. By TRUE BULK I mean – directly from manufacturers. If that means 1000 pieces of […]
Hi Andrew,
I am importing some goods from China to test market before putting too much resources in. The supplier have ask me for EORI number as she told me Fedex needed the number for the order to be proceed. Can you please advice?
I am a sole trader no company register yet. I have a look on HMRC website it seems like they need the company reg number to apply for EORI number
Thank You
Tiffany
Hi Tiffany,
No, you don’t have to be a company to get EORI number. Individuals and sole traders also can register for EORI.
It’s weird that supplier asks you for it though (maybe it’s because Fedex, I haven’t used it for a while). Your best bet is to simply call HMRC and find out. There’s an online application form available here too:
http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=vx_L5bRZb-c&formId=7127
Thanks,
Andrew
Thanks for the quick respond, Question 8-12 is the one i am not sure how to fill in.
I have buy goods in bulk from Malaysia previously and the sender use Fedex too but they not ask me for EORI number.
This is the first time i come across EORI number and i am glad i found your article,
8-12 – you would ask your supplier for these details.
Thanks,
Andrew
Hi Andrew,
Does this mean that you have to first arrange the import of your goods with a freight agent before you can apply for an EORI so you can fill out questions 8-12?
Is the information required in questions 8-12 relatively easy to get and would it be the courier that provided this information and not the supplier?
Sorry for the barrage of questions I just want to be 100% sure before I start importing my first lot of goods. : )
Thanks
Kez
Yes, exactly!
You want to apply for EORI once shipment is dispatched so you have airway bill number etc. to fill in EORI application.
Hi Andrew,
Great post. This has persuaded me that its time at the ripe old age of 20 to finally start my business. I have read several blogs and this one is up there with the better ones. If anyone has checked out startupbros they also have some very good information worth checking out. I have a product in mind that i believe could sell well and I have searched alibaba to try and find some reliable suppliers. I believe I have found one with good prices but I’m worrying about import tax and VAT chipping away at my costs as at first I want to start small and build it up. I’ve read somewhere that orders with values under £135 (I think) don’t require any import tax. Is this true?. A reply would be great and I would also appreciate any advice you could offer. Thanks
Mat
Hi Mat,
Thanks for stopping by and it’s great to hear you find my blog interesting enough to stick around! 😉
As for your plans, VAT & Import duty – here’s my take on it – IF you can’t get profit on product cost that includes VAT & Import duty, don’t even start. These two taxes will add max of 25% to your product’s base cost. Your margins should be way more than that.
Yes, there is a limit under which you don’t have to pay VAT & import duty but think about the excessive postage you’ll pay in this case (that will offset your savings).
To sum it up – if you want to do business by importing from China – buy in bulk, ship in bulk and have margins high enough VAT & import duty doesn’t affect that much.
Hope this helps Mat!
Thanks,
Andrew
Hi Andrew
I have to say this is one of the most comprehensive summaries I’ve read so far on importing so thank you very much!
This may be basic but I am not clear on how the import duty threshold (which I understand is (£135). I am looking into importing a couple of hundred clothing pieces from China at around £60 per item. Do I aggregate ? i.e. If i order more than one I am above the threshold, or is the £135 threshold per item?
Thanks!
Hi Roddy,
Yes, of course – the threshold is PER ORDER and not per item.
Thanks,
Andrew
Wow thanks for the quick reply. Thanks for the advice. I will take that information on board. The product cost that I have been quoted by a supllier is £1.93. I believe that I could sell anywhere in the region of £4-6 per item. Do you believe that it is a risk worth taking in the long run? Again thanks for the quick reply.
Mat
What you can loose really? Few hundred pounds? That’s nothing compared to what you can potentially gain by starting your own business.
Go for it & Good Luck!
Thanks,
Andrew
Hi Andrew
Great article it has really clarified everything for me.
I am about to place a small order from china. The products are small and light so I intend to use a courier company. With regards to custom and VAT charges coming into the UK do they take care of that and include in the fee or do I need to pay this once it arrives in the UK?
Thanks
Howard
Hi Howard,
Great to hear that!
VAT & import duty – courier will take care of this for you and simply invoice you for the amount + small processing/documentation fee (usually 10-20 quid).
Some courier companies deliver goods and then send you this tax invoice later on via post while others will ask to pay before or on delivery.
Hope this helps!
Thanks,
Andrew
Hi Andrew
Thanks for the quick response I appreciate your time.
My intention is too send the goods directly to a Amazon Fulfillment center so payment will have to be taken before this happens so will check with courier.
Have you ever used amazon fulfillment before?
Thanks
Howard
I wouldn’t do that in your place. If you do this, Amazon will have your supplier information and there have been rumours that they like to cut-out middle man and start selling same items on their own.
So you better send goods to your location first, then re-pack and send to FBA.
Thanks,
Andrew
Thanks Andrew
That is a real help.
Will keep you posted
Howard
Hi
Am thinking of importing bags from china, possibly about 1000 pieces weighing 1kg each.What would be the most economical and fast way to do this and how much should I expect to pay for shipping to London.Thanks
Hi Charles,
Thanks for your question.
The most economical way would be to use sea freight. It won’t be fast though (roughly 30-40 days) but the price will be low. I don’t know how many pallets this order will hold but expect to pay around 200 pounds for each pallet shipped to London. There will be extra charges like customs clearance, port fees, VAT, import duty etc. which will make roughly another 25% on top of what you pay for goods and delivery,
To make this whole shipping/customs process easier, I strongly recommend you use a freight forwarding company such as:
http://www.woodland-group.com/division/woodland-global
They will ship goods directly to your door, take care of all the documentation etc. for one, fixed fee. So get in touch with them and get exact quote for your shipment.
Hope this helps!
Thanks,
Andrew