Importing from China is a viable business model for many businesses today. Importing opens up many opportunities for your businesses, as well as giving you a competitive edge over other suppliers.
2014 saw the United Kingdom import more than £498b, increasing with an annualized rate of over 6% from nearly £377b in 2009, making the UK the 5th largest importer in the world.
Now that’s pretty impressive.
In 2013, China became the United Kingdoms largest non-EU import partner, taking over the USA, with an import total of around £2.6b. This accounted for nearly 17% of the UK’s total non-EU import trade. China became the UKs 3rd largest source of imports.
If you’re are seeking to get a basic insight into what’s needed when importing from China, these tips will hopefully offer some guidance.
Planning your objectives & goals
Like with any industry, before you begin importing from China you need to clearly outline your objectives and goals. Outlining this beforehand will ensure you’re keeping to your original plans, making it easier to analyze and adjust any targets you may have set.
Identifying reliable suppliers
When importing from China, you need to ensure that you're identifying reliable suppliers; this is incredibly important for running your business. You need to ensure they meet your quality & delivering standards. Assess product quality, product certification, and other business related standards that you’d expect with any supplier.
Checking the documents and business information of Chinese suppliers doesn’t have to be difficult. Head on over to verifying sites like China Checkup for verifying Chinese Companies. Whatever site or company you use, remember to perform due diligence.
Sourcing agents can be very handy when it comes to sourcing products and importing from China. They can help reduce production costs by sourcing the products that would otherwise need producing. This also reduces the costs in travel to and from China. Due diligence is always needed when sourcing an agent as you’re handing the money over to the agent, not the supplier.
Sourcing agents such as IMEX SOURCING are specialists in this field, and because they are a TWF advertiser they are a legitimate company. Using a sourcing agent like IMEX helps ensure that you get a constant supply of items that are of good quality and sure enough to arrive at your door on time.
Building relationships with suppliers
It is said that building a relationship with your suppliers is crucial. If you have a bad relationship then this could affect you and the business you’re running. Understanding the culture of the market you’re working with will help to strengthen that. For example, spoken by over one billion people worldwide, learning a few phrases in Mandarin (the official language in China) won’t be a bad thing, and sure to enhance your opportunities when importing from China.
Getting the right deals
Again, this will be down to how strong that relationship is with your suppliers. Is there anything you can offer to your Chinese suppliers to make the process quicker, cheaper or just more efficient? Whatever deals you can negotiate with your suppliers ensure a clear contract is set out stating what it is you have agreed.
Set out a clear contract
As mentioned above setting a clear contract will help to reduce any risk that may occur. This contract should include payment and delivery terms, as well as what currency you are to pay your suppliers in.
Import documentation will be needed also. Importing from outside the EU (in this case, China) you will need an invoice and copy of transport documentation, such as Bill of Lading to ensure custom clearance. Anything over £7000 will need a valuation statement too.
Paying your VAT
Paying VAT from outside the EU should be paid to HM Revenue & Customs (HMRC). You can reclaim the VAT (if registered for it) by getting a C79 form from HMRC showing the amount of VAT paid on goods.
Using an import agent or freight forwarder can help with this. Although it is entirely down to you to ensure you have the right documentation before starting your import business.
Imports from outside the EU should be declared to HM Revenue & Customs using the C88 form, Single Administrative Document (SAD).
What transportation to use
The main options for importing from China are by air and sea. Ask yourself, will you handle the logistics yourself or outsource to a freight forwarder? It could be easier to outsource the work, especially if you’re unsure/ uncomfortable with the process.
Importing by sea takes much longer to deliver but can be at times considerably cheaper than importing by air. Air ensures higher levels of security and is much faster.
Commodity codes help to classify goods for imports and exports ensuring that you pay the right tax. You will need to find the correct code in order to fill out customs paperwork accurately otherwise you may be fined by HMRC, have your goods seized and delay their release from customs.
For more information into commodity codes head on over to GOV.UK.