How to Export Goods from China?
When evaluating the costs associated with importing an item, you need to determine whether it is profitable for your business.
Here’s a breakdown of how to calculate your total cost:
The Formula:
- Cost of a 40′ GP container shipped to the United States = A
- Cost of the products to fill that container = B
- U.S. Tariffs (25% of B) = C
- Your profit margin = D
- Total cost per item = (A + B + C + D) / Number of products shipped
Once you’ve calculated the total cost per item, compare it to local prices in your market to determine profitability.
For most importers, this formula is straightforward, and with China, the numbers often work out in favor of profitability.
Table of Contents
How to Export from China: A Step-by-Step Guide
Exporting goods from China can be a lucrative business, given China’s role as the world’s manufacturing hub. If you are considering starting an export business with China, here’s a clear guide to help you navigate the process.
1. Obtain an Export License
Before you start exporting from China, it’s essential to obtain the necessary export licenses. These are required for businesses to legally export goods. Depending on the nature of the product and your location, you may need specific permits or documentation.
2. Find a Reliable Freight Forwarder
A reliable freight forwarder or shipping agent is crucial for the smooth export process. They handle the logistics, including shipping, customs clearance, and managing duties and taxes.
Your freight forwarder will also be responsible for getting your goods registered with the relevant authorities in China and ensuring that they are properly documented for export.
3. Choose the Right Product to Export
China manufactures a wide variety of products, so it’s important to carefully select the ones that will be profitable in your target market. Conduct market research to identify products with demand in your country and ensure that you are not dealing in items that are already oversaturated in the local market.
4. Find Trusted Suppliers or Manufacturers
One of the most important steps in exporting from China is finding reliable suppliers or manufacturers. You can use B2B platforms like Alibaba, Made-in-China, or Global Sources to connect with suppliers. It’s also a good idea to check reviews, certifications, and even visit factories in China if possible to ensure their reliability and quality.
5. Understand the Chinese Export Process and Customs Regulations
The export process in China requires thorough understanding and attention to detail. Customs regulations vary based on the product category, so ensure you are familiar with the rules surrounding packaging, labeling, and documentation. Your shipping agent or customs broker can guide you through this process and help avoid any delays or issues with customs.
6. Consider Import Duty and Taxes in Your Target Market
When exporting from China, it’s important to consider any import duties or taxes that may apply when your products arrive in your destination country. These costs can affect the final price of your goods, so make sure to factor them into your pricing strategy.
7. Plan for Shipping and Delivery
Shipping from China can take varying amounts of time depending on your chosen method (air, sea, or rail). Understand the shipping times for your goods, as well as the costs involved. Work with your freight forwarder to choose the most cost-effective and efficient shipping options.
8. Maintain Good Communication with Your Suppliers
Constant communication with your suppliers is key to a successful export business. Ensure you are regularly updated on production timelines, quality checks, and any potential issues that may arise.
9. Track the Chinese Holiday Calendar
China’s public holidays, such as Chinese New Year and National Day, can significantly impact the availability of workers and production schedules. Be sure to account for these holidays in your production timeline to avoid unexpected delays.
10. Verify the Quality and Quantity of Goods
Before shipping, it’s essential to conduct a quality inspection of the products. Hiring a third-party inspection company can help verify that the goods match the agreed-upon specifications and are in good condition. This step can prevent costly disputes or returns.
11. Document Your Exports Properly
Ensure that all necessary documentation is prepared before shipping. This typically includes invoices, packing lists, export licenses, certificates of origin, and any other required documents. Your shipping agent will likely assist with this process.
12. Export Your Goods and Monitor the Process
Once everything is set, your goods will be shipped to your destination country. Stay in touch with your freight forwarder to monitor the progress of the shipment and be ready to handle any issues that may arise during transit.
What is a China Export License?
Many e-commerce sellers depend on Chinese suppliers to produce and ship goods globally. Ensuring that your supplier holds a valid China export license is a critical first step in forming a successful business relationship with Chinese manufacturers.
What is an Export License?
An export license is an official document that authorizes manufacturers to export their products to other countries. In China, export licenses are managed by the State Administration of Foreign Exchange (SAFE). For a Chinese manufacturer to sell their products internationally, they must first apply for the appropriate export license and then validate it through their bank in China.
Why is it Important for Chinese Suppliers to Have an Export License?
If a supplier or manufacturer does not hold a valid China export license, international payments (such as CHN or CHY payments) may be blocked by SAFE.
Additionally, goods from unlicensed suppliers may be stopped at the border by Chinese customs authorities. Therefore, e-commerce sellers should always verify that their Chinese suppliers possess the necessary export license documentation before proceeding with any transactions.
Do All Chinese Suppliers Have Export Licenses?
In the past, export licenses were often managed by third-party trading companies or export agents. Manufacturers would need to go through these intermediaries to export their goods.
However, the majority of Chinese manufacturers now handle export compliance in-house, making it easier for them to manage their international trade directly.
Despite this shift, export agencies still play a role in China’s export process, helping companies meet compliance requirements. These agencies typically charge around 4-8% of the value of the exported goods.
Not all Chinese manufacturers, however, have export licenses.
Typically, smaller manufacturers or those producing components may not hold an export license, as they often sell only to domestic businesses that specialize in assembly. These manufacturers generally don’t engage in international sales directly.
