Practical Ecommerce

The Basics of Importing Products From Overseas

Everyone knows there are great deals to be found overseas — items that can be picked up for a fraction of the cost. But what most people don’t realize is that almost everything they’re buying domestically was already imported. They’re just paying a mark-up cost to the middleman who did the actual importing for them. For those new in business, there’s nothing wrong with that. But for the established businessperson, importing directly can save a lot of money.

Three Things to Consider When Importing

  1. Your wholesale cost isn’t what you pay for an item. Your wholesale cost is the cumulative total for getting that item to your house, ready to be shipped to your customers. You may be paying 50 cents a vase, but after you pay a Customs broker, import duties, various fees, freight, consolidation, and insurance expenses, your actual cost of goods may be $2.25 each.
  2. You’ll have to allow significant lead time when placing an overseas order. It can sometimes take two or three months, or even longer, from the time you place your order to the time you receive the goods. Problems with Customs that can delay your orders even further. The costs of air freight are probably 10 times higher than the costs of shipping but it’s faster and less risky.
  3. You need look at the legal aspects. There are numerous government forms to fill out and a great many regulations regarding your imports. You are responsible for ensuring that what you bring into this country complies with safety codes and all other applicable laws.

How Do I Get Started?

If you’ve never done this before, your best bet is probably to start with a Customs broker. Says Kelby Woodward, of Tradeinnovations.com, “The Customs broker really helps you through the whole process…They can make sure that all the Is are dotted and Ts crossed and that you’ve considered all the different things you need to, in order to estimate your landing costs for your product.”

A Customs broker will also walk you through the regulations and legalities, insuring you’re properly declared, you’ve paid the correct duties, and you aren’t dealing with gray market products. If your goods get tied up in Customs, your broker can help expedite the process of getting them through.

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Comments ( 14 )

  1. Legacy User March 5, 2007 Reply

    The considerations in this article are very valid. There are two other issues to keep in mind as well:
    1 – The product itself. Is the quality what you want your name to be associated with? Make sure you get samples before you commit to purchasing (you may need to pay for them and/or shipping costs). Do you need to custom-package it? Be careful in your choice of designers and proof the packaging carefully (especially if you design it yourself).
    2 – Paying for the product. All of the information you'll read about importing will (rightly so) include something about using a Letter of Credit (LOC). In my importing experience, however, I've found it also valid to pay up front at times. In such cases, be sure about the relationship you've built with the overseas manufacturer/supplier so you are comfortable doing this.

    — *Russell L. Magidson*

  2. Legacy User April 1, 2007 Reply

    What is the range in prices for a customs broker. How do I know which to pick?

    — *Mark S. Tansopalucks*

  3. Legacy User June 2, 2007 Reply

    Mark – I can tell you that the fees I paid for my first import (from Korea) were less than I had expected them to be. The customs broker side of things was about $350, including entry and warehouse fees and customs bond. The shipment itself was $1200 for roughly 10CBM. Fees will vary and, to no surprise to me, arranging the shipping (freight forwarding) from Asia was less expensive than arranging it from the US.
    As far as which to pick… ask friends or business acquaintances for their recommendation. If no one has one, look in the phone book and make a couple of calls. Go with the first helpful, friendly and affordable company that you feel OK with.
    I was happy with the broker I used, although I'm a bit uncomfortable putting his contact information on the web without his approval. If you'd like to talk with me about my experience, feel free to email me at magidson@hotmail.com.

    — *Russell L. Magidson*

  4. Legacy User August 28, 2007 Reply

    My mom is trying to start a satellite makeup business in the US. The main office is in Cambodia. I am not sure where to look for regulations concerning ingredients and whether it should be on par with the ingredients found in makeup "made" in the US. Do I need to have chemical tests done for the products? Any comment will help. Thanks!

    — *Sophia*

  5. Legacy User October 22, 2007 Reply

    I have so badly wanted to buy items wholesale and sale resale such things as
    tennis shoes t- shirts or maybe even nfl items and I have searched what seems like forever to find decent prices ,,, they all call themselves wholesalers but we all know their prices are not comparable.. . please I have been looking for years … to no avail.

    — *sherry lynch*

  6. Legacy User December 29, 2007 Reply

    Hi Sophia – I would start with the FDA's web site. Look for regulations regarding make-up including registration of ingredients.

    Sherry – I have found a couple of China-based sites to have been useful. One you may want to try is made-in-china.com. You can browse/search many products and contact manufacturers and begin building a relationship with them. As I've mentioned earlier in this thread, it's a good idea to get product samples, even if you have to pay for them (you'll no doubt have to pay for shipping at least).

    — *Russell L. Magidson*

  7. Legacy User January 16, 2008 Reply

    Russell:

    Thanks…, I have learned an incredible amount of information within the first 13 paragraphs of this site. I am based in Los Angeles and have a personal friend who manufactures polymer furniture and other items of this medium. He has a high-end base price and a low end base price for these products and his success in bringing these items into the United States has been nill, even though he does well in the foreign market. He has also hired personnel that were to bring him business, but didn't. He claims he can undercut all other suppliers of this medium. My first steps are to review his brochure, acquire a sample of his product, qualify his product through the FDA and from there I am not sure. Would a customs broker be the next step? Do I really go through the Yellow pages?

    Ken

    — *Kenneth W. Weaver*

  8. Legacy User January 24, 2008 Reply

    Sherry (and Russell),
    My husband and I are in the process of setting up an import business with some products coming from China. Since our business partner's origin was China but is now established in this country, we had the opportunity to make contacts with some Made-in-China importers and go to see their factories. In general those companies were not nearly as well established or as reputable as companies we made contact through other means. While the site itself looks great and the companies seem fantastic (my husband was almost jumping out of his chair at their wholesale prices), you should be very careful in the company you ultimately are going to work with.

    I am very interested in anyone's advice on brokers that are good for working with in Canada. My brother hired a broker but didn't have a good experience with him and ultimately ended up acting as his own broker. Easy since he lives near the place his goods landed (not so for us).

    I am also interested in any advice about brokers that both recieve the materials in the place being shipped from and then packing it and recieving it in North America. Any experience would be helpful in trying to source a good broker.

    Thanks, Mina.

    — *Mina Dragovic*

  9. Legacy User April 1, 2008 Reply

    I am keen to know how to go about importing goods from the Caribbean. I will take your advise and begin by enlisting information form the custom and excise department and then take it from there.

    Thank you very much for your advise.

    — *sonia*

  10. bdwoz May 15, 2010 Reply

    I am interested in importing Korean / oriental medicine (liquid) from South Korea. It is not a clinical-type medicine, but made of nature products (no drugs). Currently, we receive the medicine for our own personal consumption via EMS (DHL/FeEX competitor) from my father-in-law (my wife is Korean) without any real problems so far (we were delayed in getting a package once as it was stuck at customs in the US). However, I’m thinking of importing and selling the oriental medicine in the US.

    Given that it’s made of natural products and you drink it, I’m thinking that there may be FDA requirements that I need to consider before doing. Furthermore, do you have any customs brokers that you would recommend?

    -Brian

  11. Kia Monique March 14, 2012 Reply

    I just got my wholesale license and I want to buy hair/weave from overseas. How do I go about doing that?

  12. Tamison March 5, 2013 Reply

    I have a partnership with a small Japanese distributor and I want to bring the food product to the US. Any other useful tips I can use? I have no knowledge in importing or distributing product. I will check the FDA website and look for a broker to start.
    Thanks
    Tami

  13. edwardr123 July 28, 2013 Reply

    Thanks for your blog post! I am currently researching importing from China and enjoyed learning the facts you posted. So far a good tip I have learned on how to import from China came from this blog post:

    http://www.howtoimportkit.com/is-my-supplier-from-china-is-a-scammer/

    It describes how you can check the phone number of a potential supplier in China against online databases to verify whether it is a real chinese supplier or a scammer.

    Keep up the good work!

  14. alex October 6, 2014 Reply

    HI i work for a pool construction company and one of our clients wants an under water treadmill. Luckily we found a company in England that makes under water tread mills but this is my first time purchasing something out of the country which I’m located in California. I hear that i need to hire a Broker for this. Is this true? Any advice on what i should do next after researching for a broker or what i should look for when searching for a broker.

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