How to Order From China
If you’re serious about making money selling physical products online, then you’ll need to learn how to order from China. Importing products from China is the well-guarded secret to how many micro-niche online retailers get such a hand up on the competition. This post will focus on how to order from China. For more information on sourcing manufacturers, see How to Find Vendors.
Once you’ve located your supplier in China, contact them to request the MOQ (minimum order quantity), pricing, lead time, payment terms and product specs. Make sure to pay close attention to what you’re ordering, how much it costs, shipping details, and customs requirements.
Purchase Orders & Pro Forma Invoices
The standard way to place an order with a supplier in China is to issue a PO, or purchase order. This document basically outlines what you’re ordering, quantity, lead time expected, shipping method and more. You can find free MS Word templates for purchase orders here.
Generally, unless you have a long term relationship built with the supplier, you will need to pay 100% prior to shipment. Sometimes this is divided up into 2 payments. For example, 50% deposit prior to production, and 50% balance post-production/pre-shipment. Email your PO to your supplier and ask them to issue you a PI (pro forma invoice). The PI will act as your PO confirmation. Make sure to read over all the terms on the PI before sending payment.
Sending Your Payment
After confirming that everything is accurate on the pro forma invoice, you need to send payment, according to the terms within. Generally, unless you’re working with less than $1,000, your supplier will demand “TT” (telegraphic transfer), which is more commonly known as a wire transfer. Most of the time you’ll need to go into your bank and fill out the wire transfer forms there in person. Some banks allow you to call in or fax your wire transfers.
Now you’ll need to confirm to your supplier that you’ve sent the payment, and ask them to confirm that they have received it. Once they confirm that they have received it, production can begin.
Receiving the Order
When your supplier is ready to ship, make sure they accurately fill out customs forms, including the value you paid. Don’t try to have them claim it as a ‘gift’, or reduce the commercial invoice amount to appear like you’ve paid less to avoid fees. This is not only illegal, but it isn’t worth the trouble, and could cause your order to be held in customs for weeks, or even worse, confiscated and destroyed.
Once all the customs forms are in order, you just need to wait for the shipment to arrive. If you’re having the order shipped via an express courier like UPS or FedEx, the cost will be much higher, but the speed is much faster, and documentation process much more simple. Make sure to work in shipping and customs costs into your cost of goods when figuring out your profit.
If your order is much larger, you should contact a customs broker and have them deal with the shipment either by air or sea. A customs broker is like a travel agent for your order, taking care of all the details of shipment, customs clearance, etc.
This post is the very basic reader’s digest version of how to order from China. It is highly recommended that you do more research on the subject prior to actually ordering from China. You can find many books on how to order from china on amazon.com, or your local bookstore. Also check out Importing From China With Success for a very affordable instant download with much more information on the subject.
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Posted in Product Sourcing