Importing Goods from the China and the Far East

Benefits of Importing
There’s a lot to be said about buying your goods from established UK suppliers. You generally get to order what you need when you need it with the goods coming through the door shortly afterwards. The logistics couldn’t be simpler, which is good both for cashflow and stock control.
 
The problems associated with these benefits however are that you are probably selling the same goods as can be found in Southampton or Inverness and all points in between. Also your margins will be constrained by your suppliers’ price lists, whereby the best discounts are reserved for the very biggest clients - unless of course their ranges are coming under pressure in the market, in which case better prices will have come too late to be useful to you.

If you decide though that you wish to add something extra to your business, with better sales and better margins, you will almost certainly have to look overseas.

You will have to work at it to find the right suppliers and you will find that both your logistics and financing of purchases will be very different: But get it right; and the rewards are seriously worthwhile.

Importing from outside the EC - Finding a good agent
You may think that the Internet is the obvious place to start a search for suppliers but suppose you are in the stationery business. A Google search for ‘pen manufacturers China’ will throw up a list of three million websites.

When it comes to importing, especially from the Far East, a good local agent is essential but narrow the search down to ‘pen manufacturers China agent’ and you still get two and a half million entries. You must always bear in mind that what you will be looking for is the sort of agent who will act as your watchdog, making sure that the goods being sent to you conform to your quality and specification.

The agent you are looking for may be closer to home than you think. He or she may be based in the UK or some other EC country. Germany is particularly favoured but it may also turn out that your best bet is going to be in say, Hong Kong, Taipei or Singapore. So the question remains; how do you go about finding that good agent that you are definitely going to need?

Traditionally there are three ways to approach this:

The trade legations of the embassies of the countries you wish to investigate
Your trade association
Finding them yourself

The trade legations of countries such as China, (Including Hong Kong), Taiwan, Singapore, South Korea etc. tend to take their responsibilities seriously. They are usually well informed as to the specialisations of the agents on their books and can be of great assistance to you. Also these embassies often host small trade exhibitions which, although short on merchandise given their restricted size, will give you the chance to make contact with the sort of people who may be able help you to track down that extra something you are looking for. Contacts for the London offices of the chief Far Eastern trade and commercial offices are listed below;

Trade and Commercial London contact - China
Trade and Commercial B2B web links - Hong Kong
Trade and Commercial London contact - India
Trade and Commercial London contact - Taiwan
Trade and Commercial London contact - South Korea
Trade and Commercial London contact - Malaysia
Trade and Commercial London contact - Singapore
Trade and Commercial London contact - Thailand
Trade and Commercial London contact - Indonesia

Every UK trade and industry has an association and it is strongly recommended that you sign up to yours if you haven’t done so already. You can obtain information and advice on overseas agencies as well as a host of other matters some of which will be touched on later. You may even find what you are looking for through advertisements in their monthly magazine, so make sure you read it.

Just as every trade and industry has an association so they have international trade fairs. For example the world’s largest for consumer goods - such items as giftware; stationery, tableware and the like is the Frankfurt spring fair. Here one of the many massive halls, boasting four floors, is dedicated to smaller companies from all over the Far East plus India and Pakistan - nearly a thousand exhibitors in all. Some are small and medium sized manufacturers but the majority are export agents who will be offering goods from several different factories.

There are other major fairs in centres such as Düsseldorf; Nuremberg; Hanover; Milan; Birmingham (NEC); Paris; Hong Kong and Taiwan. Your trade association can point you to where and when the appropriate exhibitions are to be found for your business. The golden rule when it comes to any of these is that ‘big is beautiful’.

Minimum Quantities
Some Far Eastern operations are solely interested in shipping by the container load. This is known as importing by FCL (full container load). You should not encounter this very often however as the vast majority of shipments are classified as LCL's (less container loads). Here your order will be consolidated with a number of other orders leaving from your supplier's port with a UK destination.

It will be a fact that generally the quantities expected from you for individual items will be somewhat larger than your average order on a UK based supplier. Therefore it may be advisable when starting out on the direct import route, to restrict yourself to a limited range of goods for a promotional exercise at a peak selling time, unless you have something of such eye-popping quality and value in front of you that you know it will surely hit your UK competitors for six. Direct importing is like everything else; the more you get a feel for it, the better you get at it.

When negotiating with exporters the number one criteria must be that the prices under discussion are seriously competitive, with the prospect of substantially better margins than you would have any hope of getting from established UK suppliers. If this is not the case then importing will be pointless given the hard work and expense you will have to commit to. A good agent will understand this however and you should not be short of opportunities.

You may also come across an EC company which is well ahead of  the race, having already imported and established  the kind of goods you are after for their own domestic market. e.g. Germany; the Netherlands; Italy etc. If they have little or no distribution in the UK there will be a chance of striking the right deal, with them doing all of the hard work involved in importing for you; another reason why major international trade fairs could be important to you.

Logistics - Getting the goods in
Before you read on you should know that the sometimes complex issues touched on here are important to you when it comes to negotiating prices with potential suppliers. The management of these matters however is not something you will be expected to undertake yourself. A good shipping agent / freight forwarder or import / export agent will handle all of them for you.

Logistics when it comes to direct importing, are very different from those in force when simply buying from a regular UK based supplier. There are three considerations you must keep in mind - the time taken between the ordering and dispatch of goods, the time taken between their dispatch and arrival in the UK and the cost of doing so.

Quantity is the first issue that affects lead time. When dealing with export agents in small volumes it is not so much of a problem but when you are dealing direct with a manufacturer things are different.

Manufacturers do not carry stocks of finished goods; they only make to order and they will also have an order book which will have to be produced before they can start on your requirements. First come first served is the essential point to remember when planning to buy in this way. When it comes to importing for a seasonal highpoint such as Christmas, you will be expected to allow a lot more time for production. At such times it will probably not be possible to add to your order at short notice.

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