6 Important Considerations When Importing from China

Manufacturers in China often produce articles much cheaper, so the profit margins in sales are therefore higher. If you want to import goods from China to Germany and sell them here or in the EU, there are a few things you have to consider. Here are five tips:

When looking for trustworthy suppliers, you should take your time and seek support.

Finding the best and cheapest transport route is time-consuming if you don’t know your way around.

Deal with the customs formalities – also to be able to calculate your sales prices exactly.

1.?Choose reputable Chinese suppliers

This point is crucial for various reasons. First, you must know that the importer is entirely and solely responsible for the products that he/she imports . Any compliance irregularities with regulations and certifications can lead to serious legal problems for the importer if it results in him/her being sued because the product causes injury to a consumer.

Second, if your supplier is not reputable and issues a false or incorrect certification, your products may be held up at customs. Do note that this actually happens fairly frequently in China. It will, at the very least, bring you logistical headaches and extra costs (in terms of storage and delays), and port authorities could end up keeping the goods and absolutely prohibiting their entry into the country.

In this sense, it’s important not to trust just any supplier who tells you that he/she complies with regulations; it’s advisable to go and get to know the factory and the product in person. It also helps to be accompanied by a specialist who understands the technical problems that can arise in relation to the product and which specifications apply in order to comply with regulations.

2. Make Sure the Product Isn’t on Prohibited List

While some products may be perfectly legal in China, importing them to your country might be illegal. As a buyer or an importer, you are solely responsible for bringing the product into your country.

As a result, if you import a product that is on the prohibited products list, you and your business will have to face serious legal consequences. So, make sure the product you intend to import from China is not on your country’s prohibited goods list.

Also, importing goods that do not meet the regulations or quality and hygiene standards can also have impending legal consequences. You may have to pay huge fines or the authorities may even pull the plug on your business permanently. Be sure to take all these factors into account before you start importing.

3 Transport Planning: Timing is Everything?

When transporting goods from China to the EU, you should look for a logistics company that is familiar with the different transport routes and, if necessary, combines transport routes. The cheapest and fastest transport option for you is best found from providers with digital platforms. You can compare different dates, prices and means of transport and book the best option for you directly online: it’s as easy as taking a flight on holiday.

4. Your Price Calculation: Import Duties and Financing

Remember that if you import goods from a country outside the EU, import duties are levied, not only on the value of the goods, but also on the shipping/transport costs to the place of arrival in the EU, packaging costs and insurance fees. There is no uniform percentage for the import duty: the so-called duty rate depends on the product group to which your goods are assigned. In some cases, excise taxes (for example for tobacco products) and of course the import sales tax are added to this, but you will get it back, because you have to add the sales tax to your sales price and thus pass it on to your customers. Nevertheless, you have to pre-finance the import sales tax, at least if there is no possibility to postpone the tax payment by fiscal taxation (more about this here). Depending on how often you have to report your sales tax to the tax office each year, this can lead to liquidity problems as you usually don’t sell all items immediately.

You have to consider all these costs in your price calculation so that you do not make a loss when selling your goods. The best way to calculate whether you can take part in the price war within your segment is to order from the manufacturer of your choice and include the additional costs and your profit margin in your sales price.

5. Shipping Documents: So You Get What You Ordered

A number of documents are also required for import from China. If your goods are transported by sea freight, you will need either a Bill of Lading (also known as a bill of lading) or a sea waybill. The bill of lading not only certifies the type of goods transported, it also serves as a title deed. Such a Bill of Lading is usually useful if you do not pay for your goods in advance. This is because the sender remains the owner until full payment has been received. An ocean bill of lading, on the other hand, is usually sufficient if the ordered goods have already been paid for.

In addition, a commercial invoice and a packing list for import from China are necessary. If you do not want to do the customs formalities yourself, but leave this task to a third party , this person/company will need a customs power of attorney from you.

6. Customs Procedure: Annoying, But Necessary

As a trader, you probably want to concentrate on selling your goods, but when importing from China, you cannot avoid taking care of the customs formalities. For example, you need an EORI number if you file at least ten customs declarations per year. This number identifies your company to the customs authorities. Your goods also need a customs tariff number which tells the authorities, among other things, which product group your items belong to. This number is used to calculate the rate of duty that you have to pay on your customs value (value of goods + packaging, transport, insurance). Also important is the HS code (the first six digits of the customs tariff number), which can also be used to determine the customs rates for your goods in non-EU countries.

You must declare your goods to customs upon arrival in Germany or the EU. However, you don’t need to worry about this personally if, as mentioned above, you give a third party customs authority.