1. Speak to our customer support team live today
    Dismiss Notice
Dismiss Notice
Thanks for visiting The Wholesale Forums! Register for FREE today and gain access to more information. Sign up with Facebook, Twitter, or Google.

My Blog - The Import Guide

Discussion in 'Import & Export' started by Import Expert, Dec 11, 2013.

  1. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Thanks for the Info Rick - I'll be in touch.
  2. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Latest post on my Blog - Older TWF regulars might recognise an old face mentioned who kindly gave me permission to use this story.



    How to lose £20,000 in one day


    [​IMG]

    The question as to whether to hire the services of an overseas sourcing / quality control agent usually comes down to money. How much can you afford to lose? I will go into this in more detail in future posts but for now I want to share with you a real life story that shows what lengths some Suppliers will take in order to scam an importer.

    This comes courtesy of a friend of mine – Daniel Cassidy, who moved to China from the UK early in 2012 to make his millions, which through pure hard work he is certainly on his way to doing.

    So, what happened?

    Along with product sourcing and manufacture, Daniel helps customers outside China liaise with suppliers and safely complete their transactions. He was contacted by a client who wanted him to check an order before payment was submitted to the Supplier.

    This customer had been dealing with a supplier in China for a few months buying and selling external hard drives in relatively small batches and wanted to increase his margins by ordering in bulk. Having had successful transactions with the supplier already he felt that they could be trusted, but due to the amount of money involved wanted to add an element of protection just in case.

    For those of you like me that don’t know a hard drive from a banana – this is what one should look like inside the casing:

    [​IMG]

    They asked Daniel to visit and check out his supplier, who agreed, and made an appointment to visit the girl he had been dealing with and headed down to her office.

    Through various broken communications he ended up meeting her away from her factory and she brought a sample to check the quality of her goods. The sample was spot on and she seemed like a lovely girl, happy to help. She was quite young, about 22 but that’s pretty normal in China as a lot of the younger generation spearhead the sales teams as they have a richer knowledge of the online sales platforms used for selling.

    It was explained to her that 1000 units were required to the same specification as the sample. This was to be a repeat order every 6 weeks and Daniel advised that he would need to visit the factory before the first bulk order could be confirmed. She was a little resistant to this but it was suggested that as they were in the area they should do it now. She made some phone calls and they headed to the factory.

    A factory visit in China is always a grey area as it’s often difficult to establish exactly who owns the factory. Many ‘middle men’ will say they do when in fact they simply buy from there themselves – Not a problem in itself as they are usually just trying to save face by acting as if its theirs and it’s often cheaper to buy smaller quantities from middle men, but sometimes it would be nice to get a straight answer.

    This particular factory looked good and although the particular model was nowhere to be seen, this again is not unusual as goods are made to order anyway. It was explained that Daniel would collect the stock in person the following week and would pay on collection. This is one advantage of being on the ground in China. She was uncomfortable with this as she explained that a deposit would be required before production. This again is normal – last thing anyone wants is to produce 1000 units for an order that never gets paid.

    A week or so later the goods were ready for collection and DanieI headed down to make the pickup and inspect the goods. The address given was that of the office rather than the factory. It was pretty obvious at this point that the girl was not a factory owner or employee, simply a trading agent, but as mentioned this is not an issue.

    The goods are there, boxed up with some unboxed samples ready on the table to be checked. Again the samples were good quality. A few random checks were made on the boxed items and all also looked good.

    When buying anything related to electronic storage it is very important to check that it does what it says on the tin. Memory costs money and it is a relatively common scam to order one size, but what you actually get has far less storage capacity than is stated. Daniel booted up some of the devices and used his laptop to plug into the hard drives to test the memory – all exactly as ordered.

    The girl was starting to act a little odd – a little uncomfortable while these checks were being made. She explained she has another meeting and had no more time. Daniel felt something was not right and decided to open up a hard drive. This is where it got interesting:

    [​IMG]

    The girls face was apparently a look of disappointment, not shock, no excuses. The hard drives were using a chip to make the laptop think that they contained 500 GB memory when in reality they were using a 128 MB SD card and would only ever hold a fraction of what they were intended for. To make the weight seem legit heavy fixing bolts had been glued into the casing. On opening a few more it appeared that all of the boxed items were the same. The goods were worthless.

    [​IMG]

    Realistically this girl lost a good solid customer all to make a short-term gain on one order instead of a steady income for a good time to come. This order was worth around £20,000 which would probably have been over a year’s salary to her, with a UK retail value of double that. This shows that large amounts of money can be made from buying from places like China, but if you take your eye off the ball money can be lost too. It is just a few button clicks away on a computer but a million miles away should something go wrong.

    Scammers make up a tiny percentage of the International transactions that take place every day. Don’t be put off – Just be sensible. As with this case, if you cannot afford to lose £20,000, use an overseas sourcing/QC agent. If you want some recommendations as to who to use get in touch.

    Do take a look at Daniels Blog if you get the chance. http://www.youngmoneychina.com/
    bizmanny, mandy_j and planner like this.
  3. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Thank you Mandy
  4. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Latest Blog Post - Simple stuff but hopefully useful to some.



    Delivery within the UK

    [​IMG]

    The final delivery of your goods in the UK once they have been customs cleared is seemingly an obvious procedure, so much so that I nearly did not include it here.

    However I heard about a tricky situation during the week that reminded me that things can be overlooked sometimes. As this guide is all about minimising your costs and making the process as simple as possible, it makes sense to include it here.

    There are two main types of delivery FCL and LCL. If you have read through the rest of this guide you will know that FCL relates to a Full Container – The big metal boxes you see on the road. LCL is Lesser Container Load – A part load if you like, and for the purposes of this will be applicable to both commercial sea and air freight.



    FCL

    Full load deliveries are pretty simple. You just need to tell your freight forwarder what time, what day and where you want your container delivered. If the shipping line is busy and they cannot do it on that day as they have no transport available, you will be advised of the first possible delivery date.

    To unload, you are likely to need a suitable ramp (you have to consider that the container is a few feet off the ground on the back of a lorry) and will need a forklift if the goods are palletised. If you do not have a forklift then a pallet truck might be suitable depending on the weight of the cargo (and the fitness of those unloading).

    More than often goods will be palletised, but generally shipments from Asia will be what we in the business call ‘handball’. This purely means that the goods are not palletised and normally in cartons that will pretty much be jam packed in the container to make the most of the space. This means that you will not need a forklift and a ramp is not necessary but definitely preferable. You will also need substantial labour as this will be hard work.

    Hauliers will allow you only a certain period of unloading time before they start charging you waiting time (called vehicle demurrage). This can vary but is usually around three hours. After that they will start charging you for the hour, or in some cases per fifteen minutes thereafter.

    Shipments from places such as America will generally be palletised. This is where the ramp and lifting equipment is a definite requirement.

    If a ramp is not available then you might want to consider using a containerlift. This means they lift the container off the trailer and place it on the ground for you to unload. The downside is that the delivery cost will be more expensive.



    LCL

    LCL deliveries can be done on a variety of vehicle types. LCL will normally be palletised by the forwarder at their warehouse for easy loading/unloading even if it came in the original container as handball.

    Depending on the weight/size of the individual packages you may or may not need a forklift or pallet truck. (If it’s only a few cartons you can simply unload these by hand off the pallet).

    You need to consider if a tail lift is required (there may be a small extra charge for this), but most importantly you have to consider both access restrictions and parking restrictions.

    The situation I mentioned at the beginning of this chapter was a new importer who was located down a tiny country lane down a dirt track. The vehicle that arrived was a 40’curtainsider that attempted the delivery but quickly got stuck half a mile away from its intended destination. The importer unsympathetically advised the driver that they should have known it would not be easy, but as he gets his 4×4 down there it should have been possible….

    If it is restricted access do tell them in advance so they can get a smaller vehicle in – usually there is no extra cost to this.

    One other example I should mention was a delivery to a shop in central London with no parking/unloading facilities, resulting in a parking ticket. Again a bit of prior warning and a solution can be found in advance.

    I should also note here that drivers are not insured to unload the vehicles. They are simply there to deliver the goods to you – To the ‘curb’. Of course some of them will help if asked, especially if they are running late and you provide them with light refreshments and possibly a biscuit, but plan in advance as if you have to unload yourself.

    For LCL deliveries you will only generally be able to request a particular day at no extra cost – Good forwarders/hauliers will be able to give you an estimate of a time as well if requested. You can pay a bit extra for a guaranteed AM/PM and a little bit more for a timed delivery.

    As these vehicles can do a large number of deliveries in a day, it is hard for them to stick to exact times as they can easily get stuck in traffic or be held up at a previous job where the vehicle is stuck down a muddy lane, so don’t get too angry if they are late.
    Stream Imports and planner like this.
  5. Andy_2000

    Andy_2000

    Joined:
    Feb 18, 2014
    Messages:
    2
    Good idea, interested about it, thx
  6. fuweijiang1988

    fuweijiang1988

    Joined:
    Apr 16, 2014
    Messages:
    5
    The link is can't open
  7. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Works OK for me?
  8. ruizhangear

    ruizhangear

    Joined:
    Apr 23, 2014
    Messages:
    6
    haha, learn and learn, then take action

    [mod edit - advertising info removed]
    Last edited by a moderator: May 22, 2014
  9. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    The curse of the ‘Cheap’ product

    [​IMG]

    China is the focus here again. Not because of any particular bias, simply that it seems to be the first Country that people look at when looking to source goods from ‘Overseas’.

    It has the World’s second largest GDP (to the US), but actually takes first place as an economy when the figures are adjusted for Purchasing Power Parity, which takes into consideration wages, price of goods and servicing.

    The quest for ‘Cheap’ products seems to be a common one judging from the enquiries I receive, and I have covered this loosely on other posts already, but I need to re-iterate:

    CHEAP PRICES MEAN LOW QUALITY PRODUCTS.

    Only this morning I received an email from someone asking if I knew of a manufacturer in China that could supply him with cheap USB sticks. I asked them for more information on specifications they required and they replied simply, “It doesn’t matter, as long as they are cheap”.

    NO!

    This is quite simply a recipe for disaster, and it is interesting that most people with this approach are new to importing. Most will not venture into importing again once (if) they receive their goods, which without doubt will be (excuse my French) a pile of crap.

    China is a manufacturing haven. You can pretty much order anything you want and you can be sure that there will be many suppliers providing exactly the same products, so you can to an extent haggle over prices, but you must do it the right way.

    The first question you should be asking a potential supplier is ‘can you provide this product to this specification?’ It even helps to add that you are looking for good quality. At this stage, price should be way down on your priority list. It’s cost you nothing so far right?

    Margins in the main are tight in China. It is not unheard of for a manufacturer to be working on a 1-2% margin. However, as soon as you say you want a cheap product, one of two things will happen. They will either dismiss you, advising you that they are not interested as in their eyes you are an obvious timewaster, or their eyes will light up. They will look at the product that you want for cheap, and strip whatever quality it may have had out of it, using the cheapest components, quickest manufacturing processes and absolutely zero quality control. They may however well end up making much more of a profit margin than they would have normally. Can you blame them?

    Manufacturers need to make a decent profit to survive, and to invest in the next generation of product. Trends run like wildfire – As soon as a product looks to be ending its feasible life span, they will move on to the next product. The factory next door will probably be doing exactly the same thing, with the exact same product.

    So, once your supplier advises they can supply the widget you are after, at your specification, that’s when you can start talking about price. Just be reasonable when coming to an agreement and bear in mind the margin the manufacturer is probably working to. You are not at a market stall in Marrakech.
  10. Wolster

    Wolster

    Joined:
    Oct 19, 2014
    Messages:
    2
    Thanks for that Darren.

    I'm new to learning about this industry and your blog helps to speed up the learning curve.
    Import Expert likes this.
  11. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Good to hear! - Many thanks.

    All the best,
    Darren.
  12. CharlotteF

    CharlotteF

    Joined:
    Oct 21, 2014
    Messages:
    3
    Hi Darren,

    Thanks for this post, it's going to help me a lot as I am just starting out!
    Import Expert likes this.
  13. CharlotteF

    CharlotteF

    Joined:
    Oct 21, 2014
    Messages:
    3
    Darren, I am going to be ordering a shipment from China very soon and I'm impressed with what you have done on here.

    I would like to consider using your company, what would you suggest would be my first steps?

    Kind regards
  14. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Hi Charlotte,

    Depends at what stage you are at now. If you have identified the product / supplier and conducted due diligence then you need to find out the size of the shipment so you can get a quote for shipping costs. You can then work out an approximate landed cost, before arranging the shipping itself. (That's the easy bit! ;)).

    Kind regards,
    Darren.
  15. CharlotteF

    CharlotteF

    Joined:
    Oct 21, 2014
    Messages:
    3
    Thanks for that Darren,

    I have a lot of that information, can you recommend someone at your company that I could discuss this further with or would you be able to help me?

    Many thanks
    Charlotte
  16. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Hi Charlotte,

    I'm always happy to help if I can. Drop me over an email to [email protected].

    Kind regards,
    Darren.
  17. PeteRoll80

    PeteRoll80

    Joined:
    Sep 11, 2014
    Messages:
    11
    Really interesting...gotta follow your blog. *ThumbsUp*
    Import Expert likes this.
  18. Leo at Deliveringchina

    Leo at Deliveringchina

    Joined:
    Dec 15, 2014
    Messages:
    50
  19. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Thanks Chaps.
  20. Import Expert

    Import Expert

    Joined:
    Oct 6, 2011
    Messages:
    3,331
    Due to work commitments my blog has not been updated for some time but I'm looking to start putting come fresh content on there on a more regular basis.

    I'd be interested to know from anyone who imports or is looking to import goods from overseas in the future, what topics or questions you would like to see covered?
Back to top

Share This Page