AboutHank S Expertise Ask me about sourcing products in China, finding manufacturers in China, importing from China, developing new products in China, moving manufacturing to China, price negotiations with suppliers in China, and logistics-related issues.
Experience I lived in China from 1993 to 2003 where I learned Chinese and worked in the fields of logistics, marketing and manufacturing services. I have visited hundreds of factories in China. I am authorized by the NYS Unified Court System as an interpreter of Mandarin Chinese. I have an MBA in international business and entrepreneurship. I work in a U.S. company as product development and sourcing manager.
Education/Credentials MBA, International Business & Entrepreneurship, City University of NY
BA, East Asian Studies & Chinese, City University of NY
Studied international trade taught in Chinese at the University of International Business & Economics in Beijing
Chinese language study at Beijing University & Nanjing University
Question Hank - been reading your other posts and have learned a lot. Without getting into too many details, I'm planning to import a relatively small quantity of clothing from China to Canada for resale. The quantity will be no more than 500 shirts, packed tightly in a box or two. Given this small quantity, how would you suggest I ship from China? I'm intentionally ordering a smaller amount to ensure I'm happy with the quality and responsiveness of the factory. Could this small quanity go by air at a reasonable cost?
On a related note, I'm working with a Canada-based fashion designer who has worked with many factories in China in the past. Given her experience I was feeling somewhat at ease about the import process, but after reading your posts I'm becoming a little more concerned about what could go wrong. Anything I should ask my designer before I blindly trust her to source the right production facility for me? For my small quantity purchase she suggested just letting the facility handle the shipping and building it into the price of the shirts... but I know you advice FOB and to handle the shipping myself. Thoughts?
Thanks in advance Hank.
Answer Hi Jeff, thanks for taking the time to read through some of my past answers.
Here are the answers to your questions:
1. One or two boxes should ship via UPS or FedEx. When you have your own FedEx or UPS account you give the vendor your account # and they use it to ship you the goods and you pay the shipping fee on your end. If you don't have your own account then you'll probably need to prepay the shipping costs, either by bank transfer or Western Union to your supplier. It's not unusual for your contact person to ask you to Western Union to them personally. This is probably ok, but it's not advisable to bank wire money to an individual's bank account. Wire transfers (also called "t/t" or telegraphic transfer) should go to company bank accounts, not individuals'. Your alternative is to have the vendor ship by regular (Chinese) surface mail (slow boat), using the Chinese post office. It will be cheap as hell but will take at least a month to reach you. Your volume of goods is too small to ship via freight forwarder. Whatever method you use, tell the vendor to mark the shipping documents "SAMPLES".
2. For your second question I assume you're talking about shipping for mass production, not a small amount of samples. Make sure your designer is familiar with the customs clearance process and will be able to get the goods cleared through customs and into your hands. Does she have a reliable customs broker? America's quota system has been abolished but importers still need to pay import duties on clothes and textiles. I'm not sure what the system is in Canada, but make sure your designer knows the specific duty rate for the items you're importing. Regarding shipping, as you know I don't like letting vendors handle the shipping because that's not their business. It's like asking a butcher to cook your steak. Once your designer has decided on a vendor to use for your production, confirm that she has worked with that specific vendor before using the model she suggests (letting them handle the shipping), and that there were no problems. Success with one vendor doesn't guarantee success with another one. Neither does past success with one vendor ensure future success with the same vendor but it does bode well.
Another thing you'll need to clarify is whether building the cost of shipping into the COGs will result in a higher import duty liability. I am not sure about this because I have never done it this way. For example, if the shirt costs $1/pc and the duty rate is 10%, then you'll pay $0.10 per shirt in duties. If the shirt costs $1.10 with shipping costs built in, then I suppose you'll need to pay $0.11 in duties.
Other than the above, your biggest risk is that the vendor does not make the clothes to spec, substitutes an inferior (cheaper) raw material, etc. This happens all the time and without someone there to check the goods before they ship you are really taking a risk. If you are paying your designer directly and she is paying the vendor, then she should really assume this risk, or at least most of it. Clarify this with her before placing any big orders.
Good luck, Hank
