Articles
How to Do Good in Import Business: A Guide on Trading Companies Buying and selling of products is the basic principle of trading. It is one of the well known businesses in China that will never be limited to traders or even makers. Some businesses are engaged in buying products from set of manufacturers and then selling them to buyers who are located overseas. Trading Companies in China open big opportunity for number of importers. But there are still things to consider and need to keep in mind to be a successful importer from this country. 1. Hong Kong Offshore Entity Manufacturers in China usually invoice overseas clients from a legal representative of an overseas company which is commonly based in Hong Kong. These offshore entities may not be considered as real Trading Company and are often owned by another employer rather than the manufacturer itself. The connection between the manufacturer and the offshore entity may not be easy to prove. Thus, when the worst case scenario arises like any dispute regarding the product, the manufacturer can turn back from the deal easily. 2. The Small Trading Company Since China has an enormous manufacturing and trading industry, there is a very strong competition present in every business that has been established. Even with a simple product on the market, multiple suppliers can be found on this row even competing for the small trading companies. Most of the suppliers in Chinese market operate with its distribution and not with the production of these products. Most of these dealers are small buyers, trading for simple and little products considered as among the growing entrepreneurs. The following are found to be the most common reasons why serious problems arise in relation with dealing with small import dealers. -
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There is a tendency for directives to be disregarded since minor traders often buy products from different local manufacturers. This also creates issue as the products of local manufacturers are supposedly made exclusively for domestic market distribution. Small and disorganized traders often offer products at much lower price. However, there is no assurance that these products come in high quality. Thus, if you are into import business, make sure you avoid dealer with small traders of cosmetics, toys, and electronic products. Severe product quality is often a result of dealing with small traders whose knowledge is most frequently limited to small details of importing. They are also the kind of trader who lack technical knowledge. In line with the mentioned reasons, small traders neglect warranties and compensation with buyers and only focus on their own employees. This is because they do not have enough resources to provide this to their buyers.