How do you conduct thorough research before importing products from China?

Regardless of the product you plan to import from China, it is crucial to conduct thorough research beforehand. Through your research, you can determine whether the product is easy and inexpensive to ship from China, as well as its profitability in the marketplace. It is also important to know if you have the relevant qualifications to import and sell the product.

 

However, many sellers often fail to do sufficient research when importing seemingly profitable products, and as a result, they encounter numerous problems, such as unprofitable shipping costs due to high shipping costs, or lack of relevant qualifications, and end up losing thousands or even tens of thousands of dollars. Therefore, in this article, I will share some practical tips to help you conduct in-depth product research before importing products from China.

 

I. how to choose the right products?

Whether you are an e-commerce seller or an offline store operator, it is recommended that you utilize some e-commerce strategies or tools to efficiently pick products instead of blindly choosing them based on personal preference alone.

 

Here are four principles to help you choose the right products:

 

Principle 1: Products that are valuable to customers and fulfill their needs

User feedback: Ask your target customer group about the usefulness of the product. For example, if you plan to sell cosmetic organizers, it is best to get feedback from female users.

 

Principle 2: Products that are less accessible to consumers in their daily lives

Unique products: Choose products that are not readily available to consumers in their daily lives, rather than importing common products (e.g., T-shirts, socks, etc.) that are dominated by large local retailers.

 

Principle 3: Products that can be improved to make them different from competitors

Differentiation: select products that can be improved to make them stand out in the market. For example, enhancing the competitiveness of a product through a unique design or feature.

 

Principle 4: Products that are already in the marketplace in volume sales

Reduce risk: As a new trader, choosing products that are already sold in volume in the market can reduce trade risk. By selling these products, you can gain import and market experience.

 

Tool Recommendation:

Jungle Scout: a common tool used by Amazon sellers to help discover product opportunities in different countries.

Google Search: select products by searching Amazon bestseller lists and new product lists.

When searching for direct sales product tools on Google, you will find many tools designed for direct sales sellers that are significantly different from Amazon’s search tools. With these tools, you can find many product ads that get a lot of interaction on Facebook. Typically, a product video ad with profitable potential will have 50,000, 100,000 or more plays. A highly interactive ad usually means that the product has high market interest and potential demand, and deserves your further research and consideration.

 

II.product price research

When you find some products of interest and want to know the wholesale prices of these products from Chinese manufacturers, a preliminary understanding of a general wholesale price is enough.

 

1. Find out the price through Alibaba

The most direct way is to search for products through Alibaba. Since the prices of many products on the platform are pre-set, you can directly view the prices of products with “ready to ship” buttons without additional communication with suppliers. These prices can be used as a reference for you to analyze the profitability of your products.

 

Note that the prices shown on Alibaba are usually based on small wholesale quantities. If you plan to purchase large quantities (e.g. orders of thousands of dollars), the actual price may be 10% to 20% lower than the price shown on the page. However, some products on the platform that do not have a “ready to ship” option may have incredibly low prices, which are usually designed to attract inquiries from potential buyers and cannot be used as a basis for judging the actual wholesale price. Therefore, it is very important to master the skills of how to use Alibaba effectively.

 

2. Determine the appropriate price range

When choosing products, in addition to understanding the approximate wholesale price, you also need to define the suitable price range for your products. Generally speaking, the retail price in developed countries is 6 to 7 times of the wholesale price in Chinese factories. Example:

 

Mid-range products: a stainless steel vacuum insulated mug may have a wholesale price of $2 in China, while the retail price on Amazon in the US may reach $12.

 

Low-value products: a high-quality iPhone USB cable may cost $0.50 wholesale in China, while retailing in the U.S. may be as high as $5 or more.

High-value products: Certain high-value products may have a wholesale price of $100 in China, while the retail price in the U.S. may reach $200 to $300.

 

By comparing wholesale and retail prices, you can better assess the profit potential of your products and choose a price range that fits your business model.

 

III. Transportation Options and Cost Studies

1. Overview of major transportation options

For small-scale new importers, there are usually four main shipping options to choose from: international express, air, sea and rail transportation. Of these options, international express and ocean freight are the most appropriate choices. International express services are mainly provided by well-known courier companies such as FedEx and DHL, while ocean freight is usually operated by professional freight forwarding companies.

2, international express transportation characteristics

Transportation time: In general, international express transportation from China to the United States takes about 7 days, compared with other modes of transportation, international express speed faster to meet the high demand for timeliness of import demand.

Freight Calculation: The freight cost for international express shipping is usually calculated based on the larger parameter of the actual weight or volumetric weight of the shipment. If the parcel weighs more than 20 kilograms, the shipping cost will be approximately $6-7 per kilogram. For example, suppose you want to send 10,000 disposable paper cups from China to the U.S., the actual weight is 45 kilograms, the volume weight is 105 kilograms, then the freight cost is about 700 U.S. dollars (7 U.S. dollars / kg × 105 kg = 735 U.S. dollars).

Scope of application: international express is more suitable for the transportation of higher value, relatively small volume of products. For low-value, large-volume products, such as the disposable paper cups mentioned above, the cost of transporting them by international express is relatively high and is not recommended. In addition, products containing lithium batteries, liquids or powders are prohibited from being transported by international express.

 

3. Ocean transportation characteristics

Transportation time and cost: from China to the U.S. shipping time is about 30 days, compared to the international express longer, but for large quantities of goods transportation, the cost of shipping is relatively low. The average cost of ocean freight is $200-300 for 1 cubic meter, including ocean freight and other costs incurred during the entire import and export process.

Minimum volume restrictions: Ocean freight usually has a minimum volume requirement of about 2 cubic meters. This means that certain products may not be suitable for ocean freight for small businesses. For example, a product such as hand sanitizer or nail polish would need to be filled with 2,000 250ml bottles of hand sanitizer or 10,000 bottles of nail polish to meet the 2 cubic meter minimum, which is clearly beyond the shipping needs of a small business.

Scope of application: Ocean freight is more suitable for the transportation of large quantities, large volume of goods, and for the product of the relatively relaxed requirements of the transportation time importers. At the same time, some products that cannot be transported by air, such as those containing lithium batteries, liquids or powders, can be transported by sea.

 

Based on the above information, you can make a rough estimate of the cost of ocean freight or express service for each product. For international express delivery, the main considerations are the weight and volume of the goods, and whether they are prohibited items; for ocean freight, you need to pay attention to whether the volume of the goods meets the minimum transportation volume requirements, as well as the costs of the entire transportation process. Through a reasonable choice of transportation mode, you can effectively control the cost of transportation and improve the profit margin of imported products.

 

IV. Research Guide on Import and Sales Qualification

1. Import qualification is important

Before importing a product, in addition to focusing on the mode and cost of transportation, it is also important to know if you are qualified to import the product. Import qualification mainly involves whether the product meets the relevant compliance standards and whether it meets the specific import requirements.

 

2. Specific requirements for import qualification

Compliance Certificates: For certain products, such as toys, electronics and medical products, a compliance certificate is required for importation. These certificates prove that the product meets the safety and quality standards of the importing country, which is a prerequisite for the product to enter the market smoothly.

Other import requirements: In addition to compliance certificates, there may be other requirements for importing certain products. For example, as a U.S. importer, if you want to import food, pharmaceuticals or healthcare products, you need to register as an importer with the FBA (U.S. Food and Drug Administration), and at the same time your Chinese supplier needs to register as a manufacturer with the FBA. Although for a small amount of goods, customs may not strictly check the relevant certificates, but in order to avoid product detention, do a good job in advance to investigate and prepare the relevant certificates is very necessary.

 

3. Ways to get import qualification information

Consult freight forwarders: Freight forwarders usually have rich experience in import operations, they can provide you with professional import qualification advice, help you understand the specific certificates and requirements for imported products, and how to prepare the relevant materials.

Ask the supplier directly: Communicate with your Chinese suppliers and ask them whether they have the relevant qualifications for exporting the products and whether they can provide the required certificates. The cooperation and support of your suppliers is crucial to the smooth importation of your products.

 

4. Market Qualification Considerations

In addition to the qualification of the import link, the market qualification of the sales channel should not be ignored.

 

Amazon sales qualification: If you plan to sell products imported from China on Amazon, you need to know whether Amazon has specific sales requirements for the product. For example, whether specific certificates need to be prepared in order to sell on Amazon, or whether there are other Amazon sellers who own patents on the product. If you sell a patented product on Amazon, you run the risk of having the product taken off the shelves, resulting in a loss of the money invested up front.

 

Qualification of other sales channels: For small businesses that sell products on their own website (e.g. Shopify store) or in offline stores, they usually don’t run into too many patent issues. But still need to pay attention to whether the product is in line with the relevant provisions and requirements of the sales channel to ensure the smooth progress of the sales process.

 

V. Analysis of all cost breakdowns

When importing products, it is vital to know the breakdown of the costs. Just because the retail price in other countries is usually six to seven times the wholesale price from the factory in China doesn’t mean you’ll make a high profit. The wholesale price offered by the factory is only a portion of the overall cost, so it is essential to conduct a detailed cost analysis before placing an order in order to determine if the import has profit potential.

 

1. Sample or Model Costs

Sample Costs: Obtaining samples is necessary before quality testing can be conducted. The cost of a sample usually ranges from $50 to $100, depending on the supplier and the size of the sample.

Model Costs: If you are planning to customize or develop a completely new product, the cost of making a model can range from $100 to $100,000 USD. It is also important to know the minimum order quantity for your product to better plan your budget.

2. Product Costs

Wholesale costs: The wholesale cost of the product that you need to pay to the factory is an important part of the cost, make sure you take this into consideration when purchasing.

3. Certification or qualification costs

Relevant certificates: If the supplier is unable to provide the relevant certificates required in your country, you will need to apply for them yourself. For example, the cost of applying for a CE EN71 certificate when importing toys is usually between $200 and $300. If the order quantity is larger, the average cost for individual products may be lower.

FDA Registration Fee: If you want to import any FDA regulated products, you need to pay about $4,000 per year for FDA registration. This is a significant expense for small orders.

4. Shipping Costs

Shipping costs: Shipping costs take up a large percentage of the overall cost, especially for low-value products, where the cost of airfreight can sometimes even exceed the price of the product itself.

5.Import Tariff

Tariff rates: For small orders, import tariffs have a relatively small impact on overall costs, but for large imports, tariffs of 5% to 10% can cause significant cost increases. Tariffs vary from country to country, and the best way to understand them is to visit your country’s tariff-tracking website or consult directly with your local customs office. For example, to learn about import duties for shipments to the U.S., visit cbp.gov or contact U.S. Customs, which is responsible for charging imported products.

6. Market Costs

Marketplace Inputs: When selling products on the marketplace, you need to invest accordingly. For example, the Amazon platform charges 15% to 20% of the retail price as a referral fee, in addition to delivery and storage fees. Therefore, it is very important to prepare enough budget to promote your products in order to boost sales.

 

To summarize

Overall, if you can realize a net profit of 20% to 30%, this is already a good business. And if you are able to sell unique products or build your own brand or patented products, the profit will be even higher. By having a thorough understanding of the various costs, you can better formulate your import and sales strategies to increase profitability.