Many startup companies that have not been importing from China find themselves making these simple mistakes that can actually damage their importing business. Here are seven mistakes that we have seen business make when importing from China.
1. Not clarifying your product specifications
It is vital to explain your exact specs in writing for the supplier to create and meet your expectations. Work with the supplier to ensure that you get exactly what you wanted. If you do not make your product specifications clear to the supplier there is a good chance you will not receive what you asked for.
2. Unrealistic price expectations
Most importing companies don’t realise that when you import in larger volumes this can result in the price being less. New buyers normally don’t push the price boundaries for new importers as they normally are not ordering in large volumes like other big clients that might order millions worth of products. Make sure your price expectations are realistic.
3. Confusing unit price for delivering costs
The cost of the unit price doesn’t include other expenses such as shipping, compliance testing, project management etc. When you are importing from China ensure that all these elements are included in your budget to avoid any surprise expenses.
4. Competing with price alone
Don’t try compete with big brands. Remember that until you have built up sales volumes, the supplier is not going to give you lower prices that they do for bigger brands. Don’t only rely on price, rather focus on importing superior products and building your brand and customer service to set yourself apart from others in the same industry.
5. Thinking in months not years (when doing customized products)
New importers always make this mistake which can cost you losing a lot of business. Buyers assume things move quickly when they buy domestically. Buyers plan for days when they should rather be planning for weeks or months. If you specialise in customised items remember that there are different processes involved in getting the final outcome. The supplier has to get the raw materials, they have to produce the product and then ship it through and this can take months even if there are no problems. Don’t accept any orders until you have an exact idea of the supplier’s supply chain process. Rather make your lead time longer for clients to avoid any disappointment.
6. Compliance comes at a cost
This is a vital part of the importing process. Your supplier might say that their products comply with safety and other regulation standards but local lawyers will be coming after you, not the supplier. Make sure that a compliance plan has been added to the budget as this can quickly leave you facing a lawsuit and destroying your business. Do your research about the different regulations to avoid any problems down the line.
7. Cutting down on quality assurance
Setting up a quality assurance programme is not expensive, but if you try get an unverified vendor to do a quality assurance programme on your behalf then you are asking for trouble. You still need to ensure that the products that have been sent by your supplier meet your specific needs such as the design and quality. If you can’t fit this into your budget then you shouldn’t be sourcing your products directly from China.