Are you planning on launching your own business venture?
Or better yet, are you concerned about where you would get quality goods from at affordable prices?
Well, you will be getting all the answers by the end of this article.
Many businesses based in USA import goods from China and have been doing so for years. There are several reasons why China is considered as the one-stop destination for manufacturing quality items.
Your chances of generating a considerable profit rely on the money you spend on importing items.
In this article, we will help you understand why importing from China to USA is feasible for you, what products you could and should get from there and how does the entire process work.
Products “Made in China” have surely amassed a widespread recognition throughout the world. From shoes and clothes to furniture items and electronic gadgets and everything in between, you can import anything from China.
The reason why many businesspeople prefer importing from China is exactly what you would expect it to be. Products manufactured in China are sold throughout the world at optimal prices.
Since the prices are affordable, you might expect the quality to be average at best, right?
Well, this isn’t the case at all! The quality of Chinese products is pretty decent and recommended by users across the world.
Although importing from China can be beneficial for a business, the process is quite complicated.
However, you can easily get familiar with the procedure by understanding the associated technicalities.
To help you understand the basic and advanced requirements for importing from China, we have put together a guide. Following this guide will make you fully understand what goes behind the scenes while importing stuff from China to USA.
Before importing any Chinese products, it’s important that you have the right answers for the following questions.
Yes and no. Let us explain…
While certain federal agencies require you to have an import license, U.S Customs and Border Protection lets you import stuff without demanding a permit or license.
To confirm your compliance with the set requirements such as FDA, FTC, Agriculture etc., you should own an import license or permit while importing certain items.
These items include copyrighted and trademarked material, prescription medications as well as food and dairy products.
Before we tell you whether a customs bond is required for importing from China to the usa, let’s introduce the term.
A customs bond basically helps the importer provide an assurance to U.S customs and border protection (CBP). The assurance is that the importer will carry out their obligations concerned with custom duties, penalties etc.
You should also know that the company handing out the customs bond should also be involved in the mix.
If you employ a customs broker to assist you with getting clearance for the imported products via CBP, a customs bond isn’t required.
You can simply compensate the broker for their service and utilize their bond. If you import FDA-regulated goods, you must purchase a customs bond.
Additionally, you are required to become a registered importer on FDA’s website. Even for clearing the products by yourself, you should purchase a customs bond from an authentic surety agency.
You will be asked to provide an importer number on the entry form during the entry stage.
If you run an IRS-registered business, then your importer number can be the IRS business registration number.
If your company isn’t registered with the IRS, then your social security number will suffice.
The SSN can also be used if you don’t have a running business.
Or, you can simply fill the CBP Form 5106, submit it to the entry branch of your nearest CBP port of entry and ask for a CBP allotted number.
To stay away from the hassle, you can recruit a customs broker to assist you with such technicalities.
Once you have taken care of all the prerequisites, you are already to import from China to usa. But before that, you need to know what kinds of products you can and should import.
Of course, you don’t want to run into any trouble while importing goods from China.
Before you finalize the list of products to be imported, conduct a thorough research about the items’ scope in the USA.
Once it is confirmed that the products on your list are legally allowed locally, you can proceed.
If you wish to stay safe from scam and fraud, you should only buy stuff from Chinese trusted suppliers. Here’s how you can find them:
Once you are done searching for suppliers and comparing quotes, it’s time to dive straight into action. You can start by placing a sample order initially.
Also, it would be better if you can request the supplier to provide you with a Proforma or Commercial Invoice. Ensure to request for a packing list that features product cost, description and packing information.
Once you have finalized the products that you need to import from china, it’s time to choose a shipping service. Here are some effective shipping methods and terms that you should be aware of:
Highly effective for goods weighing between 0.5 and 500 kgs. By using this mode of shipping, you can expect to receive your products within a week.
Freight Shipping is pretty common as well. Whether you choose sea freight or air freight, you will have to confirm if you plan on hiring a US-based freight forwarder or simply request your supplier in China to do the honors.
You can easily search for a local freight forwarder on internet. The freight forwarder will take care of every major task. However, you will have to ask your suppliers about FOB costs.
In case you decide to leave the task of arranging shipment to your Chinese supplier, ask them about the CIF rates. These rates will include insurance, freight costs etc.
Moreover, you will still need to hire a customs broker to help you get clearance for the products during the entry process.
International Postal Service has its pros and cons. Although it is highly affordable, it doesn’t provide you with a tracking number for your products.
Of course, you can get a tracking number or purchase insurance for your goods, but you will have to pay extra for these perks.
Moreover, you will have to confirm beforehand if the products being imported are legally allowed to be mailed via U.S Postal Service.
Anything priced above $2,500 cannot be transferred via mail since a formal entry has to be made for it.
If you are new to the import business, you would likely be recommended to get an ship agent for managing shipping.
Although enlisting the help of an agent will make your task easier, it can cost you some extra bucks. The following options will help you discover some cost and time-effective ways of managing the shipping.
As an importer, it is important for you to ensure your products are safe and do not create injury or release hazardous substances in the market. The U.S federal agencies specify the safety regulations and standards pertaining to each product category.
If you are an Amazon seller, besides the national standards, you also need to know which products require pre-approval before you can sell them on Amazon. For products such as hoverboard products, laser pointers, and specific products in the software industry, will require prior approval from Amazon. You can also find a list of Amazon restricted productsand FBA product restrictions on Amazon website.
To know which product certifications are needed for customs clearance, you can double check with your customs broker or freight forwarder to prepare for all the certificates.
All the products imported to the USA must have the country of origin label-“Made in China”; however the certification required for different products vary. For your ease, we list some of the most popular requirements by product category.
|Product Category||Regulations and Certificates|
|Children’s products, such as toys, etc||CPC (Children’s Product Certificate) |
|Auto, motorcycles||EPA compliant (Environmental Protection Agency)|
|Electrical and electronic products||FCC compliant (Federal Communications Commission)|
|Food, drugs, biologics, cosmetics, tobacco products, etc||FDA compliant (Food and Drug Administration)|
|Kitchen & Dining products||California Proposition 65|
Food Contact Materials Testing: FDA CFR 21
|Medical devices||Premarket approval under FDA|
Besides the above products, the FDA regulates a range of products to ensure the products available in the US market are safe. To know if your products are under FDA regulations, you can check here for more information.
For apparel and textile products, there are several federal agencies administering relevant regulations as shown below. For more information, you can check the apparel compliance requirements here.
|Consumer Product Safety Commission (CPSC)||Flammability, children’s products; hazardous substances|
|Customs and Border Protection (CBP)||Country of origin for most imported products|
|Environmental Protection Agency (EPA)||Pesticides, toxic substances|
|Federal Trade Commission (FTC)||Labeling (care labeling, fiber content labeling, environmental labeling, country of origin labeling, advertising)|
|United States Department of Agriculture||Organic claims|
To know more about the electrical compliance requirements, you can click here.
|Consumer Product Safety Commission||Children’s products, hazardous substances, labeling of hazardous products, consumer product safety|
|Customs and Border Protection||Country of Origin for most imported products|
|Department of Energy (DOE)||Energy efficiency|
|Environmental Protection Agency(EPA)||Toxic substances, Energy Star|
|Federal Communication Commission (FCC)||Radio frequency and digital devices|
|Federal Trade Commission (FTC)||Labeling, EnergyGuide standards, environmental claims|
|Occupational Safety and Health Administration (OSHA)||Occupational safety, nationally recognized testing program|
|Food and Drug Administration (FDA)||Food contact substances, medical products and devices|
Once you are notified about your ordered products’ arrival, you need to submit the required documents to the CBP to get clearance for your items.
You will have 15 days to do that before the goods get sent to a warehouse. Retrieving the items from warehouse will cost you an additional storage fees.
You will lose ownership of the products if you don’t claim them within 6 months of their arrival.
The entire clearance process can confuse you, especially if you are just stepping into the world of import.
So, you are recommended to work with a customs broker or forwarder. The mentioned personnel can assist you with the process of import clearance and document presentation.
Here are a few important factors that you should be aware of:
Declared value refers to the shipment value stated by the shipper. This value helps in the calculation of total freight charges in addition to reducing the carrier’s liability for delay, loss or other inconveniences. In many cases, it is usually considered as the shipment’s cost price.
As for an HS code, it stands for Harmonized Commodity Description and Coding System. Coined by World Customs Organization, the said system is a generally accepted standard worldwide for defining a commodity type.
HS code is used for the declaration of every commodity that enters or crosses various international borders, to customs.
Around 5,000 commodity groups are a part of the extended system. Moreover, every single group is represented by a six-digit code. The system also serves as a basis for over 200 countries’ customs tariffs.
The tariff rates vary for different products. For starters, tariff rate for clothing items, mainly those belonging to the cotton category, is a solid 16%.
For LED lights, a considerable dip can be observed i.e. 3.9%. Tariff on furniture items is 1% and as for solar products, an anti-dumping duty is imposed on them.
You can check the US tariff rates by heading over to the US import tariff website (https://hts.usitc.gov/). Then, search for the desired product by entering its name or the first 4 (or 6) digits of the HS code.
For Chinese products, simply view the value under the “General” column in Tariff 1.
If the products are priced below $800, customs duty will not be applicable on them. For products priced between $800 and $2,500, a customs duty will be applicable. It can be calculated with the help of the following formula:
Customs Duty = Customs Value x Duty Rate
The customs value can be retrieved from the commercial invoice. Duty rate, on the other hand, will be provided by the HS code and country of origin.
Shipments exceeding the $2,500 mark must file for a customs bond in order to get customs clearance.
It’s common knowledge that products won’t be shipped from China to the US overnight. It usually takes the shipment 14 days to arrive at the West Coast of America and up to 30 days to reach the East Coast (from China).
While your goods are being shipped to you, you can check the required documents. This can help save your time during the customs clearance process.
Upon the shipment’s arrival, you are required to make arrangements for your customs broker to clear the goods. Provided that everything goes smoothly, you are encouraged to receive your goods.
If you have opted for the door to door delivery service, you just have to anticipate the products’ arrival at your doorstep!
We hope that our guide helped you in understanding the complete process of importing merchandise from China to the US. Granted, there are a lot of technicalities involved, but you can easily master the concepts of importing over time.
Moreover, the availability of help at every point (brokers, agents, forwarders etc.) is a plus! We hope that you achieve immense success in your planned venture and find the right suppliers!
China is the ideal destination if you want to import a variety of goods that will help your business grow, and you can get these goods at a cheap price, and of good quality. Importing goods from China is a huge go-to option when you are planning to go international with your business.
Although importing goods from China is a popular option, and very profitable, there are certain risks that go with it. Lots of importers are still skeptical of importing goods from China due to the fact that the country’s trade practices are not as regulated as that of more developed countries.
As a business person, you are familiar with the word “you have to risk it to get the biscuit.” Importing goods from China is one risk you have to take when considering sourcing your goods internationally.
Lots of things can go wrong when you import from China, but if you can lessen the risk you will make a lot of profit, and you are on course to building a successful business.
When importing goods from China, the risk a new importer think they might encounter is the supplier taking their money and never shipping their product. The possibility of something like that happening is almost nonexistent. But the risks an importer is likely to encounter are:
When you import from China there are lots of risks you might encounter, one of them is getting products of substandard quality. If you are a regular importer from China, there is a possibility that you will one day get products of low PR substandard quality.
If the shipment has just some defected products, then the situation is salvageable, and you can still sell the rest of the products and make a profit.
But if most of the shipment are defected or substandard, then you have no option than to send back the substandard products to the manufacturers, that’s why you need to have laid down terms in your contract with either your manufacturer or your sourcing agent, just to help you mitigate these type of losses.
Whenever you are importing your goods internationally, whether from China or somewhere else, there is always that possibility of your product getting damaged or even lost in transit, whether the goods are getting shipped, by air or you’re even using postal services.
The best way to reduce your losses is by insuring those products. Getting insurance for your imported products will help you cover losses that may arise.
I have first-hand experience with goods getting damaged in transit as I have helped a friend receive goods from customs, and after taking those products home, it was discovered that those products which were electronic products have been damaged.
Some heavier goods were placed on top of fragile electronic equipment, and my friend mitigated those losses since he already insured those products beforehand.
Not all goods imported from China is a profitable success story. There are times you import products from China hoping to sell and make more profit, but at the end of the day because of a highly competitive market you don’t make the profit you expect, and sometimes you can even incur a loss.
Let’s take for example you import desktop computers for $150 each, hoping to sell for $250. But after you have listed the product for months without making a single sale, you decide to reduce your price to $200, then to $180, then $170, then you finally make a sale, you will realize you have incurred a loss of $10, as you imported the desktop for $30 per piece.
The best way to mitigate this type of risk is the incremental ordering of these products.
One very risky situation you will face when importing goods from China is that manufacturer producing something with materials that are hazardous to human health, or products that can cause property damages.
You the importer have a responsibility in terms of harm or damages your products may cause. That’s why it is important to have insurance on your products.
When you import goods from China, there is a high probability that the goods you ordered for are not what the manufacturers ship to you.
This type of error happens from the manufacturer’s warehouse, the manager in charge of stocks might mix up the goods to the be shipped, and you will end up getting the wrong product.
The only option is sending the product back, and request the manufacturer sends what you ordered for. And the shipment cost should be catered by the manufacturers. These conditions should be stated in your terms of contract with your sourcing company, trading company or the manufacturer.
When you send over your design to your manufacturer, and maybe you have a patent or trademark for that design, a manufacturer in China can still copy that design and use it to manufacture for another customer, and there will be little you can do about it.
The Chinese business culture follows a certain tradition, that you need to learn as an importer, and learning the Chinese business culture can take years. The Chinese value “guanxi” which means “relationship”.
Creating the right type of relationship with your manufacturer will help you lessen your Chinese importation risks. So you need to develop a very great working relationship with your manufacturer or supplier.
A business environment is a risky place, so is the importation of your goods from China. That is more reason why you should keep some measures in place that will help you reduce the risk you might encounter when importing goods from China. So how can you reduce your importation risks? They are
One wise way to spend some little extra cash in the importation process is to first order for product samples from the chosen manufacturers to check for the product quality of the final product.
If you’re satisfied with the product sample then you can tell them to go ahead with the production, but if you’re not convinced with the sample product quality, then you can halt the production, cancel the production, or tell them what they can do to improve on the product quality.
Getting a reliable purchasing agent will help you reduce risks and save time when sourcing your products from China.
A reliable sourcing company will help you verify manufacturer’s quality, help with the logistics, verify product quality, and help you with the importation process. This will help you reduce the risk you will encounter when importing goods from China.
This is a very important step in the risk reduction process. Before ordering your products from a particular supplier, it is advisable to do a background check on that supplier to be sure they can deliver top quality.
If you are outsourcing the importation process to a sourcing company, the sourcing company is responsible for verifying if the supplier is qualified and trustworthy.
When importing goods from China, you have the option of importing by air or sea. You can ship your products of the quantity is very large, and it is not needed in your home country urgently. Transporting by air is important when the products are urgently needed in your home country, and it is not too much in quantity.
Before you order your products from a chosen supplier, it is important you visit and inspect their factories before they can begin production.
The reasons for this is to allow you meet the company management to see if they are competent enough to handle your order, the check the factory’s level of technical competence, to see who else has placed order with that same factory and check reviews, to see if the factory complies with labor laws and regulations etc.
If they meet your requirements, then you can finally give the go-ahead for production.
Before importing a particular product, take your time to understand the market. Take your time to understand the demand for that particular product in your local market, how the pricing works, then take your time to learn about the manufacturers of the product.
Make sure you are versed in every single detail of that product before you start importing, it will save you a lot of stress and help you reduce any risk you might encounter.
To me, this is the most important way you can mitigate risk when importing fromChina. You must sign a contract clearly stating the terms of payment and delivery.
And if any party breach these terms then payment won’t be made, and you can present these terms to appropriate authorities when the supplier breaks the terms stated in the contract.
A reliable sourcing company/agent we recommended Leelinesourcing
Leeline sourcing company is involved in different sourcing business that will help your company’s growth, and make your international business better.
No matter how big or small your orders are, we will help you source quality and affordable products, and we will ship them directly to you.
• Product Sourcing: With over 10 years experience in this field, our team will keep your mind at peace, and you will be sure that the products are supplied through a responsible supply chain.
• Amazon FBA sourcing service: We offer you Amazon seller services, from product procurement, to brand labeling, quality inspection, packaging services, product photographing and also shipping of products to FBA warehouses. Just tell us what you need, and we will help ship your products to your warehouse at lightning speed.
• Business and sourcing ideas: If you walk into our office, we will share business and sourcing ideas with you, even if you are importing yourself, our ideas will help you avoid mistakes that will be costly to your business. Our advice will surely help your business turn out better.