Importing from China

Skybird

Help needed.

First of all we are not VAT Registered and at this time are just a Registered Business name. We have got product samples in from China having sourced same at a Trade Fair there in April. We are happy with these products and are looking at ordering Container(s). We have visited Manufacturer Factory and are happy with Quality, Delivery terms etc.

The items are electrical/mechanical and have CE certification.
We would intend to sell these to Wholesaler here and also from direct marketing etc. The quantitys are in the low 100s. Items would be retailing at approx 100 to 500 Euro.

There is a possability of becoming a Sole Agent depending on our volume etc.

We are OK with costs of goods, Shipping, Insurance, Import Agent Fees etc.
We have storage space and are OK with Insurance etc.

What I would like to know is;

Do we need any Import Certs/Registration/Documentation or any other paperwork before we can Import Container(s) ?

Are there any other issue that we should be aware of ?

Victor

At those volumes, you would likely have to register for VAT. I think once you go over €40,000 a year, you must register, lower than that and you only have to register if you want. See www.revenue.ie

A few points:

Be aware that list and actual price in the mech / elec trade vary hugely. This may eliminate your expected margin.

Can the products be considered "raw materials" and therefore not subject to import duty?

How long will shipping take? What if it is delayed? How much stock will you need to hold between shipments? What happens if this stock is unsold? How do you unload the truck?

I imagine if you have a chat with a shipping agent or courier, they would be able to fill you in on the documentation end.

monument

Victor wrote:

How long will shipping take? What if it is delayed?

Exactly, good point.

Apparently, customs are currently targeting containers with stone in them from China, (or any from China, or maybe just our company’s containers). They “search” them at Dublin, which can add days to a week to shipment time. It has caused minor havoc over the last week (we got it yesterday), as well as a few weeks ago when we were expecting our last container.

As well as delays, it is possible that customs deny entry to your container – it’s returned to the sender. It has happened to us at least once because of insects etc that could be on the packaging wood from China, because of this, chip wood or other manufactured wood is only allowed. Strangely, there is no risk of this from a country next to a large part of China – India, with no such anti-insect immigration restrictions. Although with what you’re intending to import they’ll probably not use wood.

Victor

Thats been going on for years and India is quite some distance from China (yes I realise they share a border). One importer got over it by having the Chinese quarry use the (euopean timbered) pallets from a nearby car factory.

PhilipMarlowe

We import several different items from china, one of them being ceramic pottery, and some fool managed to turn one over or dropped it on the docks in dublin this year... ceramic pots don't take kindly to being hopped upside down much.
Like what the other guys said, you can't necessarily operate a Just In Time system because there are so many unknowns/variables...

Usually with unloading a container, your shipping agent will allow a certain amount of time to unload before charging a fee - I spent 5 hours inside hot boxes this week lifting crap onto pallets because other people were on holidays - do you have a forklift / pallet jack / mexicans to unload the stuff?

If the stuff is liable for duty and vat, your shipping company may pay this advance on your behalf to release the goods from customs and then charge you COD (plus a fee). You can register with customs so that you don't have to pay this and reclaim it which would be worth doing if you are going to be importing on an ongoing basis.

How are you paying for the stuff? LC's or deposit up front?

Shop around for shipping fees too - give them a projected containers per year and get a rate for that...

mcguiver

I've imported from Hong Kong, usually electrical, for wholesale+ retail .
Delays can be a big problem, and you have to work around Chinese new year... everything grinds to a halt for about a month.
Electrical is a funny area to deal in, usually need to bring in big quantities to make it worth while...but I'm sure you've covered this end of things.

If you do become sole agent, tie up the waste disposal end of things in advance.... legislation is making the manufacturer/distributer liable for disposing of their products when they are broken/damaged, no longer useable. And the fees here in Ireland are escalating.

Let me know if I can be of any use to you...especially for who to avoid dealing with in the electrical field...some are very bad at paying bills.

Skybird

Thanks, Victor, Monument, Licksy and mcguiver for replys to my posting.

All your comments/advise is appreciated and noted.
We will need to check projected values and look at VAT route.
Logistics for storage/unloading of goods we are happy with for the moment.
Goods have have Duty applied due to HS Code.
Payment will be advanced T/T for Sample Container.
Will take note of Chinese Holiday and check delivery schedules again etc.


Questions

Commercial Invoice ... how exact has this to be, as the VAT/Duty is determined from this. Does it have to declare just the FOB Cost of goods or the Total for shipping, Insurance etc ? Assuming that the supplier in China has organised the shipper and is billing us also on the T/T for it for goods CIF to Dublin Port.

Have had issues with samples before where we thought we had paid all shipping costs but found that goods were consigned to Agent in UK before onforwarding to Dublin. Need to ensure for container(s) that they are discharged directly to Dublin port.

Specky

and you have to work around Chinese new year... everything grinds to a halt for about a month.

There are still a lot of European companies that shut down for the whole of August!!

Beware of the Chinese practice of being economical with the truth too. Particularly when it comes to shipping dates, I've had suppliers tell me product is "in the air" or "on the boat" and it hasn't even been made yet.

They're a very very long way away.

Look out for some hidden costs. If there's documentation comes with the product or if you need marketing literature you'll probably have to do it yourself because the anglicized chinese versions will probably be unusable.

It there's software with the product the same will apply.

Are they talking agency or distributorship? They're different things. What are their expectations in return? Some people in the far east have some odd ideas about market size over here that come from the fact that their market is so huge and the fact that they think Ireland=Europe=Irish company sells into the whole of Europe...which, I would presume, you are incapable of doing. Don't get too excited about the agency until you can be sure it won't disappear pretty quickly when "mega-distributore-one" moves in and offers them trans-European sales volumes.

Good luck, but be careful. Know your market and your industry before you commit to container loads of stock.