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Factors Which Influence The Conclusion On Whether To Import Goods From China
Importing goods from China and marketing them in the U.S. or abroad has been an attractive product sourcing choice for merchants, from the small time business to the the big boys like Wal-Mart. The relatively low-cost labor and production charges in China can result in a much greater profit margin as compared to what a retailer may get if he sourced his products in the U.S. (wholesale and even directly from the company).
However, merchants must understand that the cheaper the manufacturing costs of your products, the more your risks. This goes along with the old saying "you get what you pay for." Chinese manufacturers are recognized to accept rock-bottom pricing for their products and services, but what they won't tell you is that quality will need to be compromised, in the form of substandard quality of raw materials and/or level of craftsmanship. There is a trade-off between cutting down your prices at any rate, and the overall risks you are taking. Discovering the right medium is the most primary challenge in the import export business.
Maybe you've been aware of good and bad points regarding the import export business, like being able to obtain goods produced at 1/10th the cost as in the U.S.; high quality products like purses which could easily be marked up to 500% in the U.S.; and highly rated producers with quality control much like U.S. factories; but also evaporating containers, stolen intellectual property, substandard products. The adverse incidents could be averted entirely by carrying out your due diligence: mentoring under a skilled importer; reading books and trade journals on the subject; taking classes in your local community university; and conversing with an import export advisor who has experience on how to import goods from China.
The main advantages of outsourcing your products to China are making charges are much lower as compared to in the USA; Chinese manufacturers are usually very creative and adaptive; and if you're successful, you may ultimately own your own factory, offering you the lowest production costs possible.
The main challenges of getting your products sourced in China are that lifestyle, language and business procedures are quite different from those in the U.S. and so are not easy to understand and implement; so as to achieve the price point you wish,
You might be needed to purchase a higher quantity of items than you would from a US supplier; not to mention, importing and also any other new venture, needs a solid, well thought out business plan.
Your ultimate decision on whether or not to supply your products in China has to take into account these four points: (1) The real charges of importing your goods ; (2) An accurate monthly sales projection; (3) Income forecasts; and (4) Profit
Margin Assessment; and (5) if your business could manage the time lags involved in importing, since you may find yourself out of stock for a few products that your customers demand.
If you calculate that the overall savings realized if you import goods from china are 35-45%, then it is really worth deciding on it. If you are not obtaining more than 30% savings in comparison to your current costs, first go back to your current provider(s) or dealer(s) and see if you can negotiate a better offer. It will save you time, energy and money. You may always reconsider importing later on. Important thing: if you estimate that the savings from outsourcing your products to China certainly justifies the price, the truth is that if you do not practice it, your competition will (or is already doing it) and will ultimately lead your market. Typically, the overall savings are worth deciding on it. If you find this to be the case, make importing from China a top goal.
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