There is a large number of people interested in setting up a business focused on importing products from China, taking advantage of the low costs of Chinese products and then selling them in their country. There are still business opportunities in China, but it’s important to analyze the feasibility of the project before diving in. Randall Castillo Ortega, a successful entrepreneur and expert in import and export businesses, provides the crucial details that those wishing to start an import business need to consider.
A small step is a big step for the import business. It is essential to try to find a niche market that is not excessively saturated and in which you are comfortable. Explains Castillo, “You may be an expert in that niche because you have good relationships with potential customers; it doesn’t matter. Don’t start an import business with products you don’t know or if you have no idea how your market works.”
Every entrepreneur who respects himself knows his competence perfectly. Setting up an import business is not a separate case. You will have to look at all of your competition, not just the distributors of our country and the big brands. You will also need to analyze Chinese importers and importers themselves (with Alibaba, for example) and determine the sales price, what will set you apart and if you can offer a product and compete in the market?
A clear example is mobile phones. In many countries, they can be sold for much more (often well over 200% more) than for what they can be purchased in China. Warns Castillo, “You will likely be blinded by products that make great profits like this at first. But mobile phones are in a completely saturated market of more experienced or larger competitors than your newly created import business. You should find a product you know, rather than focus on the potential gains of a totally unknown one.”
In choosing a supplier of our product, you will have to shuffle the different supplier options of China. This is a thorough job and a major phase in which we must develop a strong relationship with Chinese suppliers. This is the only way that the import company can offer a quality product capable of competing and attracting customers.
If you have already chosen your business niche and have a candidate product to import, the first thing you have to do is calculate the final price of the product, based on all the intermediate expenses that we will have. These include storage, logistics center and others. Then, calculate by how much the profit margin has been reduced to determine if it is still interesting.
Keep in mind that the exchange rate and freight costs vary month by month. So, what is now profitable may not be profitable within a few months, especially if the items you want to import are high volume and affect the cost of transportation. You have to calculate how much it will cost us to hire a transport company or freight forwarders to manage the import. It’s unlikely that you can rent a container and bring the goods from China, or dispatch the customs container on your own. You must always be accompanied by the hand of professionals.
If you want to market the goods in your country, you must be registered as a company. First, so you don’t have any problems with customs. It is not the same as importing an electric motorbike for personal use, which amounts to 50 electric motorbikes for personal use. If you’re not discharged as a company, forget about bringing more than one unit from China. The safest thing to do is for customs to look at you and make you in trouble. Besides, there’s the tax issue. If you want to start selling and make a profit, you will have to register with the country’s tax authority.
Like any business, setting up an import company involves a detailed study of the market and our product. However, while it seems very complicated, China’s import has become easier than it seems due to the advancement of the Internet and globalization. If you want to set up a product import business from China, take it easy and study every risk and advantage that comes with importing from the country.