Month: January 2018

How to arrange China Customs Brokerage and freight shipping from China

How will you get your products from China to your warehouse?

Don’t assume that the Chinese factory will do this for you or fail to include the cost in your price calculations. Did the factory quote FOB pricing – Free On Board?

You will need to find a suitable China freight forwarder to handle the shipping from China.

Firstly you should understand that China freight forwarders buy in bulk from the carriers or shipping companies. If your volume is large enough, perhaps 50 containers per year, you should look into contacting the carriers directly.

For most businesses however Chinese freight forwarders are the logical solution. Now when by buying in bulk to achieve discounts it follows that freight forwarders doing more business can achieve better discounts and therefore lower prices.

 

Contact at Least 10 China Freight Forwarders in Order to Find the Best Price

During this process use the same verification procedures that you used on the manufacturers to ensure they are real and capable of shipping your shipment and will not disappear while your container is half way across the Pacific – it happens!

 

Know the China Customs Regulations and Your Home Country’s Custom Rules

Question the China freight forwarder company on their customs procedures, ensure they aren’t making any short cuts which lower the price making them more attractive, but could lead to disastrous delays down the track.

Will your products require specialised inspections or a fumigation certificate for example?

Don’t take it for granted that the China freight forwarder will know this is required – this is how you end up with large bills for temporary storage fees while your shipment sits in customs.

 

Know the Shipping Route Your Shipment Will Take.

In many countries shipments will go through land borders and therefore may be faced by additional customs requirements.

For example we often ship to a client in Uganda, while researching the shipping route we discovered that during the land voyage across Kenya, the containers had a lower maximum shipping weight than they do during ocean freight.

From then on the client had to take this into account when ordering and we had to ensure containers weren’t loaded to exceed this new maximum weight.

Additional shipping checklist:

  • Who will arrange shipment from the factory to the Chinese freight forwarders warehouse?
  • Who will confirm that all the items arrived and they arrived undamaged?
  • Who will inspect and where necessary replace packaging?
  • Who will arrange replacement of damaged products?
  • In the event of multiple factories for one shipment, who will coordinate the factories to ship everything during a 1-3 day free storage window?
  • Who will oversee the actual loading of the container in China?
  • Who will ensure cartons are labelled correctly and packed to your requirements?

I could go on and on, but I think you get the point, shipping of your product is a crucial time where a lot of things can go wrong.

A lot of the tasks are mundane but if overlooked your shipment could be delayed or rejected at customs.

How to Manage and Control Production in China with China sourcing agent

Production control is another step which is often overlooked. Once you have placed your order and transferred initial payment it can be too easy to sit back and wait for the Chinese factory to contact you when production has been completed.

Don’t do this! Factories will always be late, they will lose your order, forget important details, overlook information in your specifications or forget about you altogether. It is essential that you continually follow up on orders to ensure they are on track.

Keen Sourcing Quality Control Office location

Communication in China

Communication with the factory is a topic for another article, however you must always keep in mind that English is a second language for your manufacturer, they often can read and write English better than they can speak, and can speak better than they can listen and understand.

Chinese learn by rote, that is they learn a word or phrase by repeating it over and over again.

This would be fine if your teacher had ever spoken to a native English speaker before! Keep your communication simple, use email or messenger software whenever possible and follow up with a call to ensure it is received or to imply the importance of what was said.

Confirm the contents of communication has been understood, Chinese will often change the subject or ignore topics they do not understand – you must repeat or find a way to make yourself understood whilst remaining calm and understanding.

Sales staff in factories are often hired because they can speak English but that doesn’t mean they understand complex legal or production terms.

Almost always, staff are very young and with little experience as the factory will keep labour costs down.

Communication often breaks down because of language difficulties particularly when buyers do not understand the limitations of the people they are talking to.

Example, a client of ChinaFind previously handled all his own sourcing and when he began sourcing from China he found a number of China manufacturers gave limited replies or stopped communicating at all.

After coming to us we quickly discovered that the manufacturers he was talking to simply did not understand what he was talking about, particularly when it came to legal topics.

Other tips to control production in China include:

  • Request photographs or product samples
  • Request a production schedule and follow up on process dates to ensure they are on track

How to Verify and Check China Company with China sourcing agent

I have so many clients that have come to me to save them simply because they failed to check the China company prior to placing an order.

I have cases where clients came to me after their manufacturer simply disappeared, where factories had slow communication or stopped replying in English, even extreme cases where manufacturers started demanding more money after the order was placed and deposit paid.

All these could have been avoided if the company had been properly checked out.

Not all companies in China are bad or scammers, in fact only a very small percentage.

How to Check Chinese company

However it is almost standard practice for factories to quote beyond their means – i.e. quote at a low price to grab your attention only to find out at a later stage the quote was for plastic instead of stainless steel etc. etc.

Communication can also be an issue, often the staff assigned to handle your order are fresh out of school, sure they can speak a few words of English, but do you feel comfortable with a 17 year old with no experience handling your order?

I have seen factories with dirt floors, with no roof, with finished products sitting in the rain – I could go on and on but I think I have made my point:

Screen and verify your manufacturers thoroughly and you will have a manufacturer you can work with long term at world beating prices.
So what do you need to verify:

  • Is the manufacturer a real and legit company?
  • Is the manufacturer is financially sound, capable of fulfilling your order, and in a dispute, able to financially compensate your loss
  • Is the manufacturer is capable of performing the contract, do they have relevant human expertise, machinery and technical capability of filling your order

As you are searching for manufacturers using the methods outlined in step one we assume you have dropped any of the following:

  • Manufacturers that list or promote any counterfeit or copy products
  • Manufacturers that are very difficult to find other than a minor presence such as on a free website, but they don’t have their own website or paid membership on sites such as Alibaba
  • Companies that demand payment to Western Union or direct transfer to personal bank accounts

Now you should be at the step of Screening and Verifying manufacturers with a shortlist of manufacturers.

Our goal here should be to gradually reduce the number to 2-3 manufacturers for the final step in the screening process of a site visit.

At this stage you will have obtained quotes from manufacturers. Use your judgement here because as I mentioned earlier some manufacturers will use tricks such as quoting very low prices to attract you to them.

However, you should be able to drop some manufacturers after they have quoted their price, product or service such as communication problems will be an indicator they are not suitable.

Sampling and Trial Orders

Another key step is sampling or placing a trial order.

Some bigger factories will offer a free sample, however in any case you should definitely arrange to inspect a sample in order to judge the quality.

A sample can also be useful later in contract negotiations as you have a physical product to base the quality level on.

The last step involves check into the company legal and financial status as well as a factory inspection to verify their ability to fulfil your order.

The China company background check will include:

  • Visit the company
  • Confirm chinese company registration and Chinese legal status with local Government
  • Due diligence on the company including references and company history

The factory inspection will cover:

  • The production machinery and technical capacity of the factory, what is the monthly production capacity.
  • The human element: Factory management, technical expertise of the staff and number of workers to ensure production ability and achieve maximum quality.
  • An assessment of the assets of the company such as buildings, land, machinery etc.
  • The registered capital of the company.

I haven’t simplified this process to highlight that it is difficult and very important.

Large companies have the resources to verify manufacturers themselves however small to medium sized companies often skip the step entirely because they can’t travel to China, can’t speak Chinese or do not have the resources to verify the manufacturer themselves.

They might get lucky and stumble on a great manufacturer, or their attempt to import from China could become their worst nightmare.
Hope sourcing agent provide China sourcing service and Chinese company check for any company large or small.

We are a trusted company with great experience in this area and I stress that it would be better to use our services in advance than find yourself in a situation where you have lost time and money far greater cost than your original order value