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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.
3. Specialized Trading Company As suggested by the name, this type of trading company focuses on certain type of products where they have specialization with. This isn’t an opportunist company but not good enough for your import business. It knows a thing or two about the product that you are inquiring about. You can still get advantage with this type of company as it oftentimes know more about the product than actual manufacturers do. It has knowledge on regulations applied to foreign products along with their labelling requirements. Specialized trading company, most often than not, works with smaller number of suppliers. As such, it has higher level of opportunity with meeting product specifications. 4. Representative Trading Company In textile and clothing industry, representative trading company is often utilized. This is much like the trading company recently discussed above. However, this one deals with five to twenty factories, thus, it appears to be an extended branch of several manufacturers. 5. Combined Manufacturer & Trading Companies Many of today’s manufacturers expand their operations by not only selling their own produced products but also the ones produced from the other factories. Too, they try to create other product related to their previously offered product. As such, you cannot be sure that the quality of the newly produced products complies with the set regulations. Getting into different import businesses really require you to gain substantial knowledge about it. How to Import is just one of those who have tried getting into this industry. And they are very much willing to share with you what they have learned from their years of experiences. Check them out at how-to-import.com.au.