How to Ensure That it is Worth Importing a Product From China

China has been part of the World Trade Organisation since December 2001 and has consistently pushed to lower tariffs and abolish market impediments where possible. This is a promising proposition for those looking to develop products in an easy and accessible business environment.

 

In particular, China has been a significant market for UK businesses, providing an easily accessible market to manufacture everything from technology to luxury food products.

With this comes a new challenge, and that is deciphering how you can make sure that it is worthwhile importing your products from China. The answer to this all stems from developing a deep understanding of your product and how profitable it will be in the marketplace.

Most importantly, working out the total unit price of your goods before importation is crucial to determining whether they’re going to be worthwhile to sell and whether your business is operating under a viable business model.

 

Below we have outlined the essential tips and tricks to ensure you are getting the best bang for your buck, and the unmissable costs that you need to take into account when calculating your total unit price.

Unit Cost - The most foundational cost that will allow you to see if you have any “wriggle room” and whether this product is worth importing is the cost per unit for your goods. This is the natural starting point provided by your supplier that will give you an idea of how much your products will cost overall. In some unique situations, you may need to also take into account additional costs stemming from services required to verify the quality of your goods or source your goods. Typically, these services are conducted by sourcing agents or factory quality inspectors.


Packaging & Shipping Costs - A significant consideration when factoring overall cost and whether importing your goods from China is worthwhile, is establishing the ballpark figures of packaging and shipping.


It is critical to assess your options with shipping, as it may be more cost-effective to look at purchasing your product in bulk and shipping via rail-freight or sea-freight. Alternatively, if you have time constraints, air-freight whilst more expensive will ensure your products are transported promptly. Other considerations revolve around your load type, and whether you require a Full-Container Load or whether it would be more useful to utilise a Less-than-Container Load for your goods. For further information, speak to our team who can assist you in assessing what the right options are for your logistics needs.


Customs Costs - As comes with importing goods from overseas, the costs associated with customs clearances, duty and tax fees can often be astronomical. For this reason, it is vital to have a solid understanding of the fees and costs associated with importing your product from other countries. Fortunately, in this regard, WTA can assist. Reach out to our expert team, who can help you work out the cost of your customs fees and any associated taxes or duties. We can also assist in clearing these on your behalf to ensure the seamless entry of goods when importing.

Do I Have To Pay An Import Tax From China To The UK?


Storage Fees/Warehousing - While this one can often be difficult to estimate, storage fees are one cost not to be forgotten. It is helpful to consider how long your products may remain in storage for, to provide a general idea of how much storage will cost you. One way to help predict these fees is to create a forecast of the speed of your sales to gather an understanding of how long the product will remain in storage facilities.
Something else to keep front of mind is that if you’re paying for a warehouse to hold your stock, then the cost of the product increases each week that the goods don’t sell, especially if your products are large. To counter this, it is important to assess all storage options and speak to professionals who can assist you with all your storage needs.

 

Marketing Fees - An often overlooked expense when assessing the total cost of your goods, is the cost associated with marketing your product. This is especially important if you are using paid advertising through Facebook, Instagram or Google.


If you are selling your products via a marketplace is if also crucial to consider the fees that are often charged for selling them. An example of this is if you are using the Amazon Marketplace to sell your goods. You should also research the options available and determine how much the marketplace fees may set you back.

 

To determine whether your product is worth importing from China, you should take into consideration all the above costs and work out the total cost per product. From here, you can then decipher the price that you would sell your product and see whether your profit margin would cover the expense, as well as bring in a little bit extra.

 

If you find your profit margin is slim, the product you are looking to import may not be the best business decision.

We recommend stepping back and revisiting the drawing board. You should be sure to assess all your options carefully and lower costs where possible.

 

It may pay to also speak to professionals to assist in finding the best logistical solutions for your goods and ensure you are selecting the most cost-effective options.

 

For those who find their product not only is breaking even but is producing a healthy profit margin, you may just be onto a winner!

 

If you would like to seek help in assessing the best logistical route, be sure to reach out to our team who would be more than happy to develop the best strategy for your business.

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