What You Need to Know About Importing From China & The Far East To UK
You’ve done your research and you feel you’re ready to take the plunge and start importing your products from China and import to the UK. My advice is to consider the following 10 Points:
- Is there a market for your China product to sell in the UK, considering all the costs associated with importing from China?
- Have you researched all potential costs of purchasing, shipping and importing to UK and this is within your budget?
- Have you researched the options available to buy from China and potential pitfalls?
- Have you checked all safety and compliance standards as well as certification required for your specific product to sell in UK?
- Will you want your brand on the product, as well as your own packaging?
- Are you looking to have a new product developed or an existing product amended with your specifications?
- Will you want to work direct with a China factory, or content to work with a China wholesaler?
- Are you considering visiting China for a trade fair?
- Are you familiar with the shipping methods, options and the process of getting your goods from China to UK?
- Do you want to ‘go it alone’ or use a purchasing consultant?
For advice on all the above, continue reading . . . . . . .
Ways to Buy In China & The Far East to Import to UK
There are different ways to approach your purchasing & import from China, some will include the following:
- Via an online platform, as an example Alibaba, Made-In-China, as well as others, which are easy to find on Google.
- Using a Sourcing Agent, typically they will be located in China, or at the very least have contacts there.
- Visiting a Trade Fair in China.
- Use a Purchasing Consultant.
Pros & Cons of Working With Online Buying Platforms Similar to Alibaba
Online Platforms – The most well known amongst these are Alibaba (There are others). The good and bad points:
Pros:
- Huge choice of sellers.
- Easy to navigate platform.
- Comprehensive information on each supplier.
- Reviews to assist in your selection.
Cons:
- Many suppliers are NOT factories.
- Your first point of contact is with a sales person whose main attribute is a limited knowledge of English with little knowledge of the product.
- Often ‘staged’ videos, photos copied from other sites/suppliers and fake certificates.
- Alibaba generally favours the buyer on sample orders if problems can be verified, however for larger orders, the merits of the buyer and seller will be taken into account and a decision made. If Alibaba accepts the buyer’s complaint, they may not get the shipping fee or any other costs associated with the claim, as well as (possibly) having to return any defected goods back to the supplier. This doesn’t help the buyer as the transaction from sampling, production and shipping may take 2/3 months and if cancelled they may have missed the selling season or marketing campaign dates.
Using The Services of A Sourcing Agent
A sourcing agent is probe Bly best described as halfway to employing your own Purchasing Consultant. The job of a sourcing agent is to find factories to match your product and order requirements.
Pros:
- Should have the ability to source different factories to match your product.
- Ideally, should speak English to a high level to avoid miscommunication.
- Will look after the order process.
- Will liaise directly with the factory whose producing your order.
Cons:
- You may not have direct contact with the factory producing your order.
- Can change factories for repeat orders without you knowing.
- Open to a lack of communication and control during key elements of the manufacturing process.
- May not be fully transparent to the costs related to your order.
Visiting A Trade Fair in China
Visiting trade fairs in China to source your supplier is a good way of comparing products and speaking with different suppliers at the same time.
Pros:
- Direct communication with suppliers.
- Ability to compare products.
- Forge a relationship with suppliers.
- Request samples from various suppliers at the same time.
Cons:
- At time of creating this post (2022.03.26), foriegners are not allowed to enter China and this is likely to be for the rest of 2022 at least.
- Costs associated with travel and hotels, as well as your time away from the UK.
- Will probably require an interpreter throughout your stay in China.
- If it’s your first time in China, you may have a culture shock.
Use A Purchasing Consultant
This the safest way to import your products from China. A purchasing consultant works for you and follows your specific requirements. They will also negotiate on your behalf, quality control your shipment and arrange the shipping to your door. A complete after sales service is also offered.
Pros:
- Works for you and follows your instructions.
- Transparent costs, factory details and timelines.
- Carries out a supplier evaluation.
- Negotiate’s the best prices and options for your order.
- Confirms and amends, if appropriate the supplier contract.
- Approves & signs-off the pre-production sample.
- Quality controls the order during production.
- Final pre-shipment QC inspection
- Prepares all export documents for shipping and Customs control.
- Arranges the shipping from China to UK
Cons:
- Will be more expensive than a sourcing agent, but you won’t have any other outlay, as in effect they offer a one-stop solution for your purchasing, shipping & import from China to UK.
Research & Due Diligence on Potential China Suppliers
If you decide to use an online platform for your China import, due diligence is a must. never rely on what you see on a supplier profile. Typical points to check and have verified are the following:
- Supplier Business Licence and registration details.
- Supplier’s Export Licence.
- Company bank account.
- Bona Fide Factory Status.
- Product Certification to UK compliance standards.
- Ability to visit and check their production lines & machinery.
- Good level & understanding of English.
- Offers reasonable payment terms, typically 30% deposit & balance on completion.
- Ability to offer door-2-door shipping, if required.
- offers a warranty on their products.
- Ability to brand your products.
Selecting The Best China Factory & Supplier To Work With
When selecting the best factory or supplier to work with, it does not come down to price alone. Often the cheapest factory will not be the best factory for you or your order requirements. The factors to look out for when selecting the best factory include the following:
- The most important factor – understanding your requirements!
- Good communication.
- High level of product quality and can offer sustainable manufacturing processes.
- Allows you to visit the production lines (surprisingly, some suppliers do not).
- Quick responses including sample and production timelines.
- Beneficiary bank account is the same as the company name.
- Verified business licence & export licence.
- Verified Product certifications to UK compliance standards.
- Offers warranty on their products and a fair return policy.
- Can arrange all export documents and shipping to UK.
Product Sampling In China & Sample Sign-off
Before mass production starts, it’s imperative to have the sample confirmed and signed-off by both parties. This will be your reference to any faults found during and after production and will be relied on as to the manufacturing quality, as well as materials and components used.
Negotiating With Your China Factory & The Supplier Order Contract
The Pro forma from your China supplier is in effect your contract with the supplier. You must ensure that all the purchasing order details are correct as this will be relied on should you have any problems with your shipment when it arrives in UK.
Some points to ensure are included in the Pro forma contract are the following, although there will be many other points depending on your product:
- Full China supplier details and this should match the beneficiary bank account name.
- Full product details and specifications of your order.
- Price details including incoterms (EXW, FOB etc etc)
- Packing & packaging details. This should be clear and include photos of the master cartons with your shipping mark.
- Delivery timeline, when the goods will be ready to be shipped.
- Payment schedule for the initial deposit payment as well as the final payment.
- Warranty & returns policy.
As mentioned, the above is just a short list of points that should be included in the Pro forma.
Getting Your China Product Packaging & Packing Procedure Confirmed
Packaging is vital for a number of reasons, but primarily to protect the product from damage during shipping and delivery from China to UK. Confirming the product packaging as well as the master carton packing is important and this should not be left to the factory, without your input. You must also advise the factory of your Shipping Mark, this is typically 2 or 3 letters from your company name to signify that all the cartons belong to the same shipment.
Warranty & Returns to Agree With Your China Manufacturer
Whilst no-one expects any faulty items or returns, it’s inevitable that there will be a very small percentage of defected products within a shipment, this should typically be capped at between 1% – 2%. It’s important that there is an agreed warranty agreement as well as any returns procedure. Depending on your product, some factories may agree to a 1% of ‘spare parts’ to cover the warranty.
Payments to Your China Supplier - Who, When & How to Pay
Payment terms with your China supplier will differ from each supplier and vary with the total order cost. Typically this will be 30% deposit when the order is confirmed and the balance payment before shipment.
Some China suppliers will offer balance payments against ‘Original Shipping Documents’ being received by your UK shipping forwarder.
Payment currency will typically be in US$, although some factories will accept payments in other currencies, typically GBP, EURO & RMB.
Payments through a “Currency Exchange House” can often be cheaper than sending payments via your bank and are likely to give better exchange rates for your GBP.
Always ensure your payments are to the same company name in the Pro forma. Check the details closely!
Quality Control Inspection of Your China Order
3rd party quality control inspections for your China shipments are advised for all your orders, even repeat orders. A new/repeat order may have a new component supplier, which needs to be checked.
There are many quality control inspection companies you can choose from and this is a cost effective element for your China import.
Not to carry out a QC inspection may well result in false economy.
Types of quality control inspections may include the following:
- Pre Shipment Inspection
- During Production Inspection
- Pre Loading Inspection
- Container Loading Supervision
- Random Sample Selection
Export Documentation for Importing From China to UK
It’s important to have your China shipment export documents checked, as any errors when submitting to both China Customs & UK Customs can, and often will result in delays and additional costs.
Typical documents should include the following:
- Commercial Invoice
- Packing List
- Certification for UKCA or CE Compliance
Products that contain batteries will also require an MSDS (Material Safety Data Sheet) report.
Shipping From China to UK - Preparation & Options
Your China shipment should be prepared to suit the shipping method you’ve selected to reach UK.
Sea freight options from China, will be with either a Full Container Load (FCL) or Loose Container Load (LCL) for smaller shipments. If using LCL, you should ensure that the packaging is sufficiently strong to take account of all the man handling that will take place with loading/unloading at various points from the factory in China to your warehouse in UK.
Air shipment options from China to UK are either via Air Cargo (airport to airport) or door-2-door via an international courier, typically DHL, UPS or FeDex.
Over recent years, shipping by train from China to Europe and UK has become increasing ly popular, due to quicker transit times and daily train departures.
In all cases, it’s important that all your boxes/cartons are marked with your company initials, this is known as ‘The Shipping Mark’.
Comparing quotations for shipping from China to UK, and reading the small print regarding what the quote includes, can often save you money on your final shipping costs.
The Process When Your China Shipment Arrives In UK
If sending your China shipment to UK by sea, you’ll need a UK freight forwarder to handle the Customs Clearance procedure as well as Duty payments & delivery to your warehouse. I would advise against trying to do this yourself to save a few pounds. It will probably end up being false economy.
The same applies to air cargo shipments. Your UK forwarder will handle everything and deliver to your door.
Train shipments can be delivered to your door with all duties paid (incoterms – DDP). Your shipping agent should be able to offer the best option for you.
International express couriers will deliver door-2-door and will handle all the UK Customs formalities. Generally, you will pay the courier the Duty payments, either before or after the delivery takes place.
