IMPORTING FROM CHINA
We’re going to get into how to import from China.
Before we go any further, I want to make a couple of quick disclaimers. First of all, I am not an attorney and am not able to give any sort of legal advice. If I describe past personal experiences, don’t take these as legal advice. Everybody’s situation is different. If you have a legal question, you need to seek out an attorney and get their opinion and take their advice. Secondly, I am not an accountant or tax professional, so if I mention taxes or tariffs or anything like that as far as goods coming in, those laws and things change regularly. I am sharing personal experiences from my importing career. It doesn’t mean it applies to you.
What you really want is just the raw information; you want to know what to do and how to avoid mistakes when you begin to import from China. Well: here it is.
I started importing before I went to China. I had a candle manufacturing company where we manufactured a ton of those little inexpensive candles. My company was partially bought by a Chinese importer and we started importing the glass that we put our candle wax into. At the time we were paying about .60 cents a piece for glass. We imported the glass for something like .16 cents a piece.
I saw the benefits immediately of importing, but I had a partner who was a giant importer, so I didn’t need to learn all the ins and outs of it. A few years later, as I branched out into other manufacturing businesses and got out of the candle business, I needed equipment and supplies. I started selling a lot on the Internet and was thinking, “Man, it would be cool to direct import some products and sell them online.” But I was too big of a chicken to go to China by myself.
Finally, I talked a friend of mine into going with me on that first trip. He had never been to China either, so I don’t know why I thought he was going to help. The very first trip I went to China I was there for three and a half weeks. I ended up buying nothing, I was so doggone confused. I was more confused when I left than when I got there. I came back feeling really foolish after having spent all that money and time, so I started developing a little system: if I went back again, what would I do?
My system involved how to get the best sources, how to get the best prices, and things like shipping and duties. I documented it all, so the next time I went back to China, I had my homework done. I began bringing in a few products that I was using in my own business; I brought stuff in for personal use and I brought stuff in to sell.
I eliminated products based on things like the marketplace being too small or the competition too big. Eventually, some patterns started to rise and I developed a system for buying winners predominantly. Everything I have purchased has not been a winner, but I have figured out how to make money from the losers.
PLAYING THE RISK
There is an inherent risk in importing, if you don’t know what you’re doing. It comes from many different directions. It comes from a tax and tariff perspective; from agents and guys like that trying to screw you; from buying incorrectly and buying for too much. If you pay too much for the products you import, they may be worthless when you get them here. You have to take this seriously as a business.
The upside to the importing business is that I have met very few importers who have been importing for more than four or five years who are not very, very successful. You don’t meet a lot of people who have become importers without becoming successful. You meet a lot of people who become importers for a minute, lose all their money, and then go away. It is a little bit like stock brokerage or commodity brokerage: if you don’t know the rules and how the game is played, you can get beat up pretty good.
This book aims to give you a strong education in importing; a strong education in how to reverse risk and put it back on the sellers and other people; and even how to use other people’s money to start your importing business. Even if you don’t have a lot of money to invest, if you have the knowledge and connections, typically speaking there is more money out there than there are knowledgeable people to run a business like this.