Take a look at eBay or Amazon. Even a cursory glance shows that there are dozens of sellers offering imported products to buyers. Moreover, they’re experiencing a lot of success on these platforms.
Did you know that many of these sellers don’t have huge companies?
Instead, they purchase products directly from Chinese manufacturers and sell them themselves.
It sounds like a lot of work. And there’s no denying that you’ll have to make the effort to turn your store into a success. But it’s possible, with the right advice.
To demonstrate that point, here’s the story of a man who turned importing to his advantage.
Case Study – Mario Scavuzzo
About five years ago, Mario Scavuzzo had an idea. He wanted to start his own ecommerce business that sold products from China. He’d heard about the process and seen other shops achieve success. But he didn’t know how to get started.
Hours of research using Google brought him to the China Import Formula website. After a little further research, he decided to buy one of our courses. He found much more than a few tips and tricks. Our course offered valuable information, including templated contracts. He learned how to negotiate with manufacturers and how to both sell and post his products.
He wrote a list of 10 products that he thought might sell. But then, disaster struck. A kidney cancer diagnosis set his plans back. Thankfully, he survived the cancer and decided to reignite his passion for selling online.
Mario came back to his list and ploughed more time into researching each product. Using our guide, he started contacting factories using the Alibaba platform. Crucially, he avoided going for the cheapest option. Instead, he decided to use the factory that wanted to build a relationship with him. This created the foundation for his business. Proper communication is the key when starting an importing venture. A partner that doesn’t communicate with you can’t help you when you run into issues.
With his factory and products chosen, he ordered 100 generic products. After quickly creating a logo, he used a variety of marketing techniques to build interest. A combination of pay-per-click Amazon ads and promo codes got his product selling. In less than a month, he’d made almost $2,000 from selling the product at $19.99 apiece.
That was just the start. The next month, he decided to use private labelling to brand his products. During that second month, he made $4,000 from sales. In the third month, he made $6,000.
Mario sold his very first product about in 2014. During his first year of selling, he generated $50,000 in revenue. During his second year, he doubled that figure. Today, his import business generates $200,000 per year.
All of this from a $5,000 initial investment.
Tips for Building an Importing Business
Mario’s story isn’t unique. There are many importers who’ve experienced similar successes.
The key is to know what you’re doing before you start buying products. Here are six tips for importing from China.
Tip #1 – Research Different Products
There’s one key piece of information to remember when deciding which product to sell.
What you want doesn’t matter as much as what the customer wants. A product will only sell when there’s demand for it.
So, how do you determine demand?
Amazon and eBay both offer tools that can help you. Create a list of products that you’re interested in and research them using the platform you’ll use to sell. Use the search terms that you’d use if you wanted to buy the product. If lots of results appear, there’s usually a demand for that product. Use this to inform your decision about which product to import.
Furthermore, there’s the issue of how much you buy. A product may not sell, even if the research suggests that it will. If you buy in bulk straight away, you may find yourself in trouble.
Once you’ve researched the product, order a sample amount. In the case study, Mario ordered 100 products to get himself started. How quickly you can sell this sample amount is your final bit of research. If there’s demand for the product from the start, you can start to focus on scaling up.
Tip #2 – Research the Regulations
Once you’ve selected your product, you need to find out about the regulations that surround it. Different countries have different rules in place for importing. In many cases, these rules extend to certain types of products, rather than just covering importing in general.
In Australia’s case, there aren’t any set rules for importing. But anything that you buy must clear Australian customs. The Home Affairs website offers a detailed list of restricted and prohibited items. Ensure your items don’t fall into any of the categories on that list. If they do, they’ll get held up in customs. In many cases, you won’t be able to get your items back.
This wastes time and money. Do the research early on so you don’t get caught out. Compliance to your country’s laws is a crucial part of running a successful importing business.
Tip #3 – Select a Reliable Manufacturer
Many new importers make the mistake of trying to buy as cheaply as possible. There’s a clear logic to this. If you buy low and sell high, you generate a larger profit.
But there’s a problem with always going for the cheapest option. You can never guarantee that the manufacturer will offer the reliability that you need to run a sustainable business. They may deliver shoddy products that you can’t sell. Or, they may become uncommunicative at key points. Both of these problems cause delays. Moreover, selling shoddy products damages the reputation of your online store. A bad reputation can thwart your efforts before they’ve gotten off the ground.
What you’re looking for is a reliable manufacturer. This isn’t always the most expensive manufacturer either. Plenty of factories that fall in the mid-range of your quotes can offer quality in this area.
It all comes down to the conversations that you have during the initial stages. If your vendor seems cold and unresponsive in the early stages, they’ll probably carry that through to later on. If they refuse to offer a sample, you’re setting yourself up for trouble too.
You’re looking for a friendly relationship with a vendor who’s there when you need them. Show them that you have mutual social and business objectives. From there, you can build a working relationship that benefits both parties in the long run.
#4 – Build a Detailed Contract
Never enter an importing agreement without a rock-solid contract in place. Even the friendliest of vendors may renege on the deal if you only have a verbal contract in place. Get every single thing into writing to make the relationship as clear as possible.
Your contract should go into specifics when it comes to the products that you want. Cover the prices and any discounts you may receive for ordering in bulk. But make sure you nail down the quality aspect too. As mentioned previously, selling bad products leads to a bad reputation. You can nip this problem in the bud if your contract specifies a certain level of quality. It also helps to create a returns procedure, just in case the products don’t meet your standards.
The use of International Commercial Terms (Incoterms) helps with this. This is essentially a trade language that all manufacturers and importers understand. Finally, make sure you know when the vendor needs you to pay and in what currency they want the payment. Nail down the payment method you’ll use and you’ll have a solid contract. Even so, it’s also worth seeking the advice of a legal professional to make the contract as strong as possible.
#5 – Don’t Feel Intimidated
You may have a temptation to accept the first offer that a manufacturer gives you.
Don’t do that. You have room to negotiate with most vendors.
For example, you may have a lot of cash ready to make your purchases with. You can use this fact to show the vendor that you’ll make prompt payments upon delivery. All manufacturers like getting paid quickly for their work. If you can do that, they’ll be more willing to offer discounts.
Think about your strengths and weaknesses as they relate to the relationship that you’re building. Use your strengths to increase your negotiating power.
Of course, you must keep things professional. Trying to push things too far, especially in the early stages of the relationship, could cause problems. But don’t feel intimidated either. This may be a new venture for you. But it’s important that you secure a favourable contract from the off.
#6 – Use Private Labelling
Many manufacturers offer a private labelling service for their products. This means that they stamp the product and its packaging with your branding.
This can prove very useful when you’re selling the product to Australian consumers.
Many buyers approach unbranded products with caution. Regardless of the product’s actual quality, they may assume that the lack of a brand means that it’s a bad product.
You have to adapt to this buyer mentality. Private labelling allows you to do that.
Create a brand and logo for the products that you choose to sell. Keep it consistent and make sure it conveys an aura of quality. You may want to hire a graphic designer for this rather than using a logo that you’ve created yourself.
The presence of a brand is an assurance of quality. It also shows the buyer that they have somebody to contact if something goes wrong.
Moreover, several selling platforms require the use of a brand for certain services. Amazon’s “Fulfilled by Amazon” (FBA) service is a good example. This service allows you to use Amazon’s facilities to store your inventory. But the company doesn’t accept unlabelled products.
Paying that little bit extra for a branded product helps you in the long term. It provides you with more options for storing your inventory. Plus, it increases buyer confidence in your products.
The Final Word
As you can see, starting an importing business isn’t as simple as it may appear. There are several pitfalls that you must avoid. To avoid making mistakes, do the following:
- Research every product that you intend to sell.
- Know about your country’s regulations when it comes to importing.
- Build strong relationships with your vendors.
- Negotiate a favourable and transparent contract.
- Attach branding to your products.
But this is just the start. There’s so much more to learn about importing products from China. You’re going to need help if you want to take your business to the next level.
China Import Formula can provide you with the information that you need. We hold seminars throughout Australia. Plus, we host webinars that can help you to build your business.
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