A Beginner’s Guide to Sourcing Products from China

Are you an entrepreneur or small business starting your journey with product manufacturing and looking for a guide to sourcing products from China for small businesses?

Are you wondering “What is China Sourcing” and how do you get started? Do you have a lot of questions about how to import from China or Asia? If so, congratulations! We’d love to help you.

Conceptualizing a product and watching it come to life can be an exciting and rewarding experience. It also comes with several challenges to navigate, one of which being sourcing products from China, Asia, or any other overseas market.

As someone who is new to the world of sourcing and manufacturing, you may not know where to begin when it comes to product sourcing for small businesses. That is quite normal and understandable.

Our top piece of advice that we give to any burgeoning innovator in the industry is to team up with an esteemed product sourcing agent like China Sourcing International. (CSI).

Still, there’s more that goes into product sourcing than just that. Check out this overview as a beginner’s guide to product sourcing in China to help set you out on the road to success.

Success in Sourcing Products from China Starts with Research 

The research phase is important for any innovator, entrepreneur, or small business as it helps them understand what they know, what they don’t know, and what they need to know.

You first need to know what your rights are as an importer. Your rights will vary based on where you and your business are registered. If you’re from the United States, your company’s Internal Revenue Service Number (IRS EIN) will determine your importing rights.

Make sure you know this number and have it handy throughout the entire product sourcing and importing process. 

Another important piece of information you’ll need to find out is if the products you want to import are allowed in your country. The ability to manufacture in China is unfortunately not an automatic green light to importing it in the US or other countries.

Part of your research needs to be reviewing your country’s restrictions on imports to determine if you need to acquire any permits or will be subject to restrictions or regulations by the government.  

Finally, also make sure that you read up on health code requirements for importing from China. Unintentionally importing goods that violate health code requirements could result in extreme fines, penalties, products being detained, and destruction of property. 

Find the Right Product Sourcing Agent

This can be part of your research phase, but its importance merits its own section.

Partnering with the right sourcing company in China (like CSI) is crucial for all entrepreneurs, but especially for first-timers who may need a bit of guidance.

China is chock full of sourcing agents and sourcing companies, which is both good and bad.

• It’s good because there are so many options
• It’s bad because there may be too many options.
• We caution against doing a broad search for “sourcing agents in China”, as this will be too general and will likely not get you the results you are looking for. Instead, partner with a reputable sourcing company that has plenty of experience working with companies just like yours. 

Start Calculating Costs for Sourcing Products in China

Once you’ve done your research and partnered with a sourcing company you trust, the next step is to begin calculating costs. This will help you determine how much you need to budget and what is realistic for your first order or shipment. 

The first part of calculating costs is classifying your goods; then you can calculate your landed costs. The 10-digit classification number for each item you import from China, along with the Certificate of Origin, will determine the rate of duty you’ll pay when importing goods from China.

As per your customs importation, you will also need to know, or through the guidance of a sourcing company like China Sourcing International, what is the Harmonized System.

Code (HS Code) of the Item

HS code is a code denoting the product specifics to gauge on the duty rate for Customs in every country.  Even under one product there are many details in it. For example, battery items can be either a normal AAA battery, however, if you put an HS Code of a Lithium Ion battery then you might be charged a higher duty rate. From there, you can calculate the landed cost.

We advise calculating the total landed cost before you place your order to avoid overestimating or underestimating landed costs.   

Something to note is that freight shipping depends on Incoterms (International Commerce Terms). Some suppliers and sourcing companies in China can arrange freight transportation and logistics, which may simplify the process. Just make sure you partner with a reputable company so you have control over the cost, speed, and security of the shipment.

As a beginner sourcing products in China for small businesses, there are many things you’ll need to navigate. Let us help you simplify the process!

Reach out to China Sourcing International today.

Contact us online or call us at +1-888-659-1018.

We can also be reached by email at [email protected].