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A Complete Cost Analysis of Importing from China

By Edited Aug 6, 2016 1 1

This article presents you a sample cost evaluation when importing goods from China. This will also tackle some of the things that you are going to expect when you engage in this kind of business. I’ll try to cover everything in a few steps. When importing products from China, any businessman aims to find a particular good at the lowest price possible without compromising its level of quality. Also, a good shipping deal and a decent profit must also be considered without sky-rocketing your prices. If you are getting into this kind of trade, getting the process right the first time is important to avoid future headaches. Ok, so let’s start our journey into understanding how much it costs to import from China and making a cost study.

Tips on How to Appropriately Cost Your New Import Project

1. Obtain your PPC (Product Purchasing Cost) Right from the Start

This is considered as one of the most important things in this business. You need something that’s attractive, serves a purpose for your intended customers and is made of the highest standard. Meanwhile, the price should also correspond to the product you are selling as specified. Make sure that everything from the actual product to the packaging is covered in the agreed price between you and your supplier. That might also include the foam moldings, though.

2. Considering Your Freight Cost

Nowadays, there are a number of freight forwarders who are offering their services at a price that is very cost efficient. You just have to find out which freight mode is best for you. Are you the type who wants the quickest delivery mode? Read on. There are 3 modes to consider:

-          Sea Freight - this is the longest mode but also the cheapest.

-          Air Freight - while this mode is the quickest, this is also the most expensive among the three.

-          Sea and Air Freight - a combination of both which is rarely used.

Going back to step one, ensure that the supplier includes all the services they can extend in their quotations. Make sure that nothing is overlooked. Missing certain details can set back a delivery and that’s something you don’t want.

3. Dealing with Customs and Tariff

This is the next logical step. Tariffs may also depend on the type of product that you are importing as well as the quantity. You need to know what grouping your products fall in.

Other things you have to deal with are:

-          Tariff rates

-          Insurance

-          Freight and storage and others

You can hire a customs broker, though. In this way, it will relieve your workload.

4. Calculating Your Import Costs

It is very important to analyze your overall cost when importing because you are already shelling out money from the time you sourced out your product up to freight and handling, down to palletizing and storage of it. Make sure to include side costs, currency exchange fluctuations or rise of raw material costs.

5. Time to Make a Profit

After calculating all of your costs and making a proper accounting, you will now be able to add up your sales margin. When calculating your returns, consider some unexpected occurrences like fluctuations in the currency exchange as well as the cost of raw materials used to produce the good. It is also recommended that you set a validity date. For instance, if the unexpected happens, this will give your customers the sense of urgency to buy your product at its current price. And finally, decide on a price that your customers will find alluring while still reaping a decent return margin.

Ok, that’s it!

I hope you learned how much does it costs to import from China!



Aug 10, 2012 8:52pm
Informative article. Have you done much importing? If so, what do you recommend to import?
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