Wednesday, December 23, 2020

5 Common Mistakes Companies Make When Importing From China ... How To Avoid Them

 

Since the entry into force of the Chile-China FTA, trade with the Asian giant has grown considerably, at rates above 15% per year, which made China the first trading partner of Chile in 2009. Due to this, the 98% of products of Chinese origin can enter our country with zero tariffs, which has significantly increased the number of companies and entrepreneurs who have seen in the eastern country a great opportunity to do business.

 However, there is still a certain degree of ignorance about the import process, generating typical errors that can be avoided.

 Knowledge of the Regulations

 Most of the products can be entered into Chile without any problem, but there are categories of products that require visas, approvals or special certifications before entering the country: Products of plant or animal origin, fertilizers, chemicals, medicines, cosmetics, Food, cement, among others, are products that require special authorizations. It is important for the importer to know what the specific requirements are for importing a particular product, and what is the protocol for certification, approval or entry authorization .


 Choice of Provider

 There are people who send money to suppliers without even being sure that the company exists. Fortunately, there are mechanisms for background checking on Chinese companies, and even intermediated means of payment, that make a transaction much more secure now than it was a few years ago. In the personal or small-scale shopping sites,  there are evaluations of people who have bought before from the same supplier, and there is even the possibility of confirming the payment once the product has arrived in Chile , which makes an import operation very safe. In the case of slightly larger purchases, although there are no evaluations, it is possible Finding out if the company is officially registered, how long it has been operating, if it has export experience, if it accepts secure payment methods, among other things,  and it is absolutely necessary to do before importing.

 Cost calculation

 This is a very important issue, and that sometimes makes the difference between a good business, a regular one, and a downright bad one. Many people consider only the cost of the product and the cost of shipping, but forget to include expenses such as import tax (zero if it comes with a certificate of origin), VAT, and other expenses that occur locally (deconsolidation, customs agent , other local expenses). In imports of less than one container, the expenses in Chile associated with an import can reach up to 40 or 50% of all expenses incurred (not counting the cost of the product). Before importing,  the importer must calculate all expenses until the product reaches his home or warehouse.

 Product specification

 Some importers make the mistake of buying without knowing exactly what they are buying, or without providing the necessary technical information so that the supplier knows what the importer wants. For this reason, it is necessary to  specify in as much detail as possible the product that is being sought, via a technical sheet, request samples, and then carry out a cargo inspection at origin  to guarantee that what is being shipped corresponds to the agreed specifications.

 Price expectations

 Many people think that everything in China is extremely cheap, which is partly true, since many profits can be generated by Import products from China. However, as in any other order of things, the higher the quality of the product, the higher the price and the higher the volumes, the lower the prices. It is important to manage and understand the cultural aspects that affect a negotiation with a Chinese supplier, and not to haggle too much on prices, especially if gray areas are left in the product specification and the volumes to be imported are not too high , since it is possible encounter surprises when receiving the product.

 For those who are looking for alternatives in China, “finding out the specific regulations for the product I want to import, take the time to look for and choose a supplier that suits my needs as an importer, be clear about the costs and expenses that are generated by When importing the product, specify as much as possible the product that I want to import and understand the way of negotiating of the Chinese suppliers. These aspects can make the difference between a successful business and another not so much ”.

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