Sourcing from China Over the Internet, Part 1 of 2

Sourcing from China over the internet

More and more we’re receiving inquiries from readers who are interested in purchasing product for import to the United States over the internet. It seems most people are interested in using either Global Sources Direct or Chinavasion, although there are likely many more companies offering this service.

Since you don’t need to work with factories directly, can order from the comfort of your own home or office, and use a credit card for payment, this can be a reasonable way to begin an importing venture, particularly if your initial quantities are low enough to use air shipping.

Fundamentally it’s important to understand that even though you may be purchasing in small quantities and using air shipping, you are still IMPORTING! There are rules and regulations involved when importing and it’s important you know the details of your transaction or you may be surprised at your final cost. For example, it’s easy enough to purchase food items or clothing made from certain materials online, but if there are import restrictions or quotas in place for this type of item, it may be seized or levied a high duty by the US Customs and Border Protection (CBP) once it hits the dock. If this happens, it’s your responsibility as the importer and not the responsibility of the company you purchased the product from.

All shipments arriving from outside the US must include certain information required by the CBP. While a U.S. Customs and Border Protection Declaration form is obtainable at most foreign post offices, declaration forms do vary from country to country and don’t always have all the information necessary. It is important to know that foreign shipments that are not accompanied by a U.S. Customs and Border Protection declaration form and an invoice may be subject to seizure, forfeiture or return to sender. You should make sure the seller is providing the following information, regardless of whether it is asked for or not on their own paperwork.

1. Seller’s Name and Address - Self explanatory.

2. Description of the item(s) in English - This is a legal requirement. You need to be as thorough as possible on the description. It is this description that determines the classification number (HTS Code) for the duty. It’s important to include all the main materials that are being used in the product. For example, ‘Scarf’ is not sufficient. You’d want to specify that it’s a ‘Silk Scarf’, or an ‘18-karat gold rope necklace’ instead of just ‘gold necklace’. If your description is not accurate, you could end up paying the wrong duty rate. Even worse, if you’re deliberately misleading (or the CBP thinks you are), inspected packages could be seized, you’d receive a fine, and you’d still be liable for the total cost of your packages, not the company you purchased from.

3. Quantity of Each Type of Item Being Shipped - For example, two watches (14-karat gold, 17 jewel), one leather purse.

4. Purchase Price in US Dollars - You’ll need to convert the cost into US Dollars and provide both the unit price, and the total cost for all items purchased. Many sellers will offer to understate the true cost to help the purchaser avoid duties, but this is illegal. Sometimes sellers will also understate the value of the goods to avoid package handlers stealing the goods. Therefore, you should always insure your goods, as this is the best way to protect yourself.

5. Weight of the Item(s) - Self explanatory.

6. Country of Origin - Seemingly self explanatory but it’s not. This is the country the product itself was produced in. For example, let’s say you’re purchasing gold necklaces from China but the clasps are actually made in Cambodia, you need to specify that.

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March 9, 2008 | Filed Under Sourcing Guides 

Comments

One Response to “Sourcing from China Over the Internet, Part 1 of 2”

  1. Al Edmund on March 11th, 2008 4:22 am

    Good info here. Great site overall. It would be great if you could put up some mention of price negotiation tips.

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