Importing from china

Pump101

Hi all im considering buying goods from China for my water pump business as the prices are extremely attractive. Iv sourced the goods i need and the company who produces them. Now iv been sent a proforma invoice for $2400 which is good. Now iv asked about freight and they have said its C&F that its included in the unit cost to Ireland.

Now im wondering what charges im faced with from the Dublin side. Iv been enquiring about customs on the goods and have been advised its 1.7% on the goods im importing. So is tit $2400 x 1.7% =40.8 2440.8x 23% VAT? Am i correct so far? Then am i liable for handling charges for dublin port ect? The good are roughly 6"x6"x4" in size at 1100 units.

It would be greatly appreciated if someone could give me some advice on this.

Ian

rainbowdash

Pump101 wrote: »

Hi all im considering buying goods from China for my water pump business as the prices are extremely attractive. Iv sourced the goods i need and the company who produces them. Now iv been sent a proforma invoice for $2400 which is good. Now iv asked about freight and they have said its C&F that its included in the unit cost to Ireland.

Now im wondering what charges im faced with from the Dublin side. Iv been enquiring about customs on the goods and have been advised its 1.7% on the goods im importing. So is tit $2400 x 1.7% =40.8 2440.8x 23% VAT? Am i correct so far? Then am i liable for handling charges for dublin port ect? The good are roughly 6"x6"x4" in size at 1100 units.

It would be greatly appreciated if someone could give me some advice on this.

Ian

Best thing is just search this forum for the word "China" etc. as this has been done to death many times on this forum.

The long / short is get FOB terms from your China supplier and get an Irish company to quote you all the other charges in advance.

Anyway if you read all the old threads everything will be explained.

SeanSouth

Take it from someone that imports a lot of containers from China every year and who visits there a lot,that you're heading for real trouble.

Yes, the prices are very attractive however the products are not. They will be inferior in every way from something you will get in Europe or USA and wont last very long at all. They will be a lot more expensive in the long run. If these pumps have any electric components, be even more cautious. Your customers will initially be happy with the price but very unhappy after that. Its a bad business model

The Chinese are extremely good at "reverse engineering". They start with a picture of a product or a sample of a product and they will make their own product look exactly like it but thats where the similarity ends. Chinese production is very primitive in comparison to the Western equivalent.
Too many manual processes and very inconsistent quality.

If you insist on going along with this project you need to, as a minimum, specify every last component that goes into your product in precise detail.
I mean every single last component bar none. If you dont break down your product into detailed components, you will receive the cheapest components available and you dont have to ask me what that means.

I only import very simple products and even that is a huge challenge. No electrics, No motors, Nothing with moving parts, Nothing mechanical, Nothing technical. Everything we buy is inspected at the factory before loading in the container. Sometimes the inspection has to be redone three times and this is with factories that we have been dealing with for eight years !!

One time I was having a conversation with a very nice Chinese chap, owner of one of the factories, we deal with, and we were talking about "Quality"
He told me that his biggest problem was with Europeans coming to China and looking for the cheapest possible price and haggling to get it. The Chinese will happily give you a cheaper price but a cheaper price just means inferior parts.Here's a tip for you. When you go to China, buy the very best you can find and dont buy the cheapest !! Haggling for a cheaper price invariably means an inferior product. Chinese factories are working on very tight margins of about 10%.
They dont have room to haggle on price but they do know how to make the product "to your budget" "Sir"

I squirm here sometimes when i see posters getting obsessed about shipping costs. Shipping costs are the least of your problems. A few hundred here or there
wont matter too much in the end of the day. Concentrate on the quality of the product and how to achieve it. That is the mountainous hurdle to get over.

So,Is it all bad ? No its not. Ive visited about 36 factories in total all over China. Three of those factories are very good. Six or seven will get the job done if you keep a close eye on things and build plenty of safety checks into the system. The rest, to be honest are pure rubbish.

I know I answered a different question to the one you asked but I just couldn't resist .......

Best of luck in what you decide.

Pump101

SeanSouth wrote: »

Take it from someone that imports a lot of containers from China every year and who visits there a lot,that you're heading for real trouble.

Yes, the prices are very attractive however the products are not. They will be inferior in every way from something you will get in Europe or USA and wont last very long at all. They will be a lot more expensive in the long run. If these pumps have any electric components, be even more cautious. Your customers will initially be happy with the price but very unhappy after that. Its a bad business model

The Chinese are extremely good at "reverse engineering". They start with a picture of a product or a sample of a product and they will make their own product look exactly like it but thats where the similarity ends. Chinese production is very primitive in comparison to the Western equivalent.
Too many manual processes and very inconsistent quality.

If you insist on going along with this project you need to, as a minimum, specify every last component that goes into your product in precise detail.
I mean every single last component bar none. If you dont break down your product into detailed components, you will receive the cheapest components available and you dont have to ask me what that means.

I only import very simple products and even that is a huge challenge. No electrics, No motors, Nothing with moving parts, Nothing mechanical, Nothing technical. Everything we buy is inspected at the factory before loading in the container. Sometimes the inspection has to be redone three times and this is with factories that we have been dealing with for eight years !!

One time I was having a conversation with a very nice Chinese chap, owner of one of the factories, we deal with, and we were talking about "Quality"
He told me that his biggest problem was with Europeans coming to China and looking for the cheapest possible price and haggling to get it. The Chinese will happily give you a cheaper price but a cheaper price just means inferior parts.Here's a tip for you. When you go to China, buy the very best you can find and dont buy the cheapest !! Haggling for a cheaper price invariably means an inferior product. Chinese factories are working on very tight margins of about 10%.
They dont have room to haggle on price but they do know how to make the product "to your budget" "Sir"

I squirm here sometimes when i see posters getting obsessed about shipping costs. Shipping costs are the least of your problems. A few hundred here or there
wont matter too much in the end of the day. Concentrate on the quality of the product and how to achieve it. That is the mountainous hurdle to get over.

So,Is it all bad ? No its not. Ive visited about 36 factories in total all over China. Three of those factories are very good. Six or seven will get the job done if you keep a close eye on things and build plenty of safety checks into the system. The rest, to be honest are pure rubbish.

I know I answered a different question to the one you asked but I just couldn't resist .......

Best of luck in what you decide.

Thanks for taking the time for replying in such detail and its much appreciated. Basically Im buying these products here in Ireland already from a wholesaler that sources his parts from China. The goods them selves are only expected to last a couple of years anyway due to the nature of there use and are considered consumables i guess.

Can i ask you Sean do you know anything about this c&f freight thing? I can't seem to find much about it.

Thanks for your reply.

Ian

SeanSouth

OK regarding C&F.......

When you are buying goods overseas there are a number of "delivery terms" that you can agree with your supplier. they are sometimes called "inca" terms and the main ones are as follows

1) FOB (Free on board) It means that the price includes all costs as afar as putting the goods on board the ship in China. The buyer then pays for the shipping freight and all further costs from that point on.This is the one I prefer.

2) C&F (Cost & Freight) It means that the price includes the cost of the goods and the sea freight to Ireland. In other words all the costs are paid up until the arrival point in your country. The danger with C&F is that the seller may get a very good shipping rate from the Chinese freight company but when the goods arrive in Ireland, the buyer is loaded with costs. Before you agree to C&F, find out which shipping line they will use. Then find out who the shipping agent is in Ireland for that shipping line. Ring them up and find out what your costs will be when the ship arrives to Dublin. Very often they are not able to tell you in advance so you're flying blind. There are some horror stories about loading of costs at the arrival port.

3) CIF (Cost Insurance Freight) Same as No.2 except that the Seller also pays for Insurance

Duty and vat is calculated at the CIF value.
If the value of your consignment is $2400 on a C&F basis. You need to convert the dollars into euro and add any insurance premium. You then calculate vat and duty on that basis.

If you're registered for vat, you can claim the vat back through your vat return

Hope this helps

Sean South

Pump101

Thanks for that Sean that clears it up some what, I may get back in contact and get shipping details and try work out freight costs at my end.

Thanks for your time Sean.

Axwell

Contact this boards member and he will be able to give you advice and help you out.

http://www.boards.ie/vbulletin/member.php?u=222187

RUDOLF289

Pump101 wrote: »

Hi all im considering buying goods from China for my water pump business as the prices are extremely attractive. Iv sourced the goods i need and the company who produces them. Now iv been sent a proforma invoice for $2400 which is good. Now iv asked about freight and they have said its C&F that its included in the unit cost to Ireland.

Now im wondering what charges im faced with from the Dublin side. Iv been enquiring about customs on the goods and have been advised its 1.7% on the goods im importing. So is tit $2400 x 1.7% =40.8 2440.8x 23% VAT? Am i correct so far? Then am i liable for handling charges for dublin port ect? The good are roughly 6"x6"x4" in size at 1100 units.

It would be greatly appreciated if someone could give me some advice on this.

Ian

Hello Ian,

Your calculation of the duty and VAT is spot on.

I have posted on this topic several times (Imports from China, China Import Service Fee)

The problem is that freight forwarders / carriers in China take advantage of the fact that they know that by the time the goods are dispatched, the importer at destination has paid for them.

Therefore, they quote an extremely low rate to the chinese exporter / shipper. And then instruct their agent at destination to collect the difference between what they should have charged and what they did charge, from the consignee in the form of a China Import Service Fee.

In addition the agent at destination (over which you have no control) will add their own inflated charges to this which leads to a very high cost. Because you have already paid for the goods, they have you over a barrel.

Therefore, always buy on an FOB basis and obtain quotes through Irish based freight forwarders. On that basis you should be able to obtain a quote including all charges for the freight, clearance, handling and delivery. It is my experience, especially when dealing with groupage / less than container loads, you will get a better deal on this end. You certainly shouldn't end up with any nasty surprises.

I would be happy to assist you in sourcing a competitive shipping cost. Feel free to post again or drop me a PM

In relation to sourcing products in China, there are a number of sourcing companies in Ireland that source a wide range of products in China on behalf of Irish European and US based clients. These companies have a significant database of reliable suppliers across a wide range of products / industry segments. They can procure samples for you, ensure that product is manufactured / supplied to specification and because they understand business in China (often have Irish / European people on the ground in China), are able to eliminate uncertainty (never mind dealing with somebody here rather than several thousands of miles away)

I know a number of companies that may be able to assist you. Feel free to PM for further information

Cheers,
Rudolf289

DanTien

RUDOLF289 wrote: »

Hello Ian,

Your calculation of the duty and VAT is spot on.

I have posted on this topic several times (Imports from China, China Import Service Fee)

The problem is that freight forwarders / carriers in China take advantage of the fact that they know that by the time the goods are dispatched, the importer at destination has paid for them.

Therefore, they quote an extremely low rate to the chinese exporter / shipper. And then instruct their agent at destination to collect the difference between what they should have charged and what they did charge, from the consignee in the form of a China Import Service Fee.

In addition the agent at destination (over which you have no control) will add their own inflated charges to this which leads to a very high cost. Because you have already paid for the goods, they have you over a barrel.

Therefore, always buy on an FOB basis and obtain quotes through Irish based freight forwarders. On that basis you should be able to obtain a quote including all charges for the freight, clearance, handling and delivery. It is my experience, especially when dealing with groupage / less than container loads, you will get a better deal on this end. You certainly shouldn't end up with any nasty surprises.

I would be happy to assist you in sourcing a competitive shipping cost. Feel free to post again or drop me a PM

In relation to sourcing products in China, there are a number of sourcing companies in Ireland that source a wide range of products in China on behalf of Irish European and US based clients. These companies have a significant database of reliable suppliers across a wide range of products / industry segments. They can procure samples for you, ensure that product is manufactured / supplied to specification and because they understand business in China (often have Irish / European people on the ground in China), are able to eliminate uncertainty (never mind dealing with somebody here rather than several thousands of miles away)

I know a number of companies that may be able to assist you. Feel free to PM for further information

Cheers,
Rudolf289

Hi Rudolf289,

New to boards. Find this forum really interesting as I operate a product distribution company. Purchase most of my product (simple plastics) from UK who in turn source from China. I'm now at the point where I need to look at China myself but don't know there to start and have heard some horror stories. Keen to talk to a sourcing company. Coud I PM you?

DanTien

Calif

Try and check what rates and fees your bank are charging also. Compare your bank with other banks and with currency.ie

The saving by shopping could prove to be more than your shipping also.

DanTien wrote: »

Hi Rudolf289,

New to boards. Find this forum really interesting as I operate a product distribution company. Purchase most of my product (simple plastics) from UK who in turn source from China. I'm now at the point where I need to look at China myself but don't know there to start and have heard some horror stories. Keen to talk to a sourcing company. Coud I PM you?

DanTien

RUDOLF289

DanTien wrote: »

Hi Rudolf289,

New to boards. Find this forum really interesting as I operate a product distribution company. Purchase most of my product (simple plastics) from UK who in turn source from China. I'm now at the point where I need to look at China myself but don't know there to start and have heard some horror stories. Keen to talk to a sourcing company. Coud I PM you?

DanTien

Hello DanTuien,

apologies for the late reply. Feel free to PM me or send me an e-mail on [email]<snip.[/email].

I would be happy to assist you with your sourcing requirements and put you in touch with a number of reputable sourcing companies.

Especially starting out and not having dealt with China direct before, I would recommend to deal with sourcing companies. They have the experience and expertise when it comes to sourcing products. They have large databases of suppliers across a wide range of industry sectors and can arrange samples. They can also do pre-shipment inspections and take the uncertainty out of dealing with Chinese suppliers.

Obviously they charge for their services. However, compared to distributors margins, they would be significantly lower. On top of that, because of their understanding of the way business is done in China, coupled with the fact that they may have buying power for the products you are looking for, I am sure that overall their pricing will be competitive.

Let me know if you need any assistance

Cheers,
Rudolf289