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Tips For Beginners on How To Import Goods From China

It is obvious to raise hundreds of questions while getting started in the importing business. Especially, in China, where language barriers can be the biggest hurdles in products sourcing. Apart from this, you may face difficulties in finding the answers of these questions – How to find suppliers? What are the profitable products? How to determine what product to sell first? How to reduce risk of scams and from where to start?

Here are the basic tips to start a successful business and Sourcing products from China.
Pick out good product: It is extremely necessary to research and select the best product to import and sell. It can be a quite difficult for you, if you are going to manage on your own. To avoid frustration, consult with reliable China sourcing company. They assist you in finding and selecting suitable products.

Reach out to the authentic supplier: Once you decide your product, the next step is finding out a good supplier for you. Sourcing companies offer great help in finding authentic suppliers or vendors to avoid the scams. They play a great role in making price negotiation, quality control, product development, logistics etc.

Order and sell some samples: It is better to place a small sample order to test & validate your product. This not only reduces the risk but also helps you to understand or analyze the product value? After analyzing this, you can think about private label branding & expanding your product line.

Importing from China – Websites, Tools and Resources for Importers

We’ve prepared a list of useful websites for those who is thinking about starting to import from China.

Importing goods from China is a long process. Buying online from Chinese websites are quite risky, you may face the scam at any stage. Finding a reliable supplier from China is the key to do successful business in china.

So we endorse the following websites to boost importing from China.

1. Alibaba
Alibaba.com is the largest Business to Business portal & quite famous, here importers can find products and suppliers from China. Most of suppliers can be found on Alibaba. No, 100% of Alibaba suppliers are not scams. But you should be careful while searching the suppliers.

2. Import-Genius
There is one more way to search the suppliers from China is Import-genius.com. As Alibaba is free of charge, Import-Genius charge for searching Chinese suppliers. Import Genius tracks shipping activity around the world shows exactly what is going in the import-export business.

3. China-TradeFair
Rather than trusting any website you can meet suppliers personally by visiting trade fairs in China. This website gives you details related to forthcoming trade-fairs. Using their simple search engine, you can choose a date, industry, or city in China and browse among selected trade shows.

4. DutyCalculator
To calculate Import Duty correctly you can use DutyCalculator. It helps you to calculate your profitability.

5. QAIZENGROUP.COM
Qaizen Group is a specialized China sourcing company. Businesses of all sizes can gain advantage of product sourcing from China. Their special services not only help to find the right suppliers, but also ensure that you get the right price and quality from them.

Factory Visits in China: How to Efficiently Plan and Conduct Them

Importing goods from China, without a prior visit to the manufacturing facility is absolutely not advised. However, considering the sheer size of the country and its cities, this isn’t a very easy task.
Here is how to plan your factory visits, while saving time and money:

1. Visit only two factories a day.
This way you can conduct a more comprehensive survey of the premises, which may not be possible if you have too many visits scheduled for a single day.

2. Sales office or factory?
Often you will be provided with two different addresses of your supplier. If not mentioned specifically, they are likely to belong to the sales office and the factory, and not necessarily, the two will be located closely. The prevalent China product sourcing practice is that the importer arrives at the sales office and is helped to the factory by the supplier, or his aides. However, if you are short on time and want to visit the factory directly, confirm its address first.

3. Hiring a car for the visit.
Finding a car-on-rent for your factory visits is not a very difficult job. All you have to do is surf the internet. But do keep in mind that the daily ride limit is 10 hours. An extra charge is levied if that limit is exceeded. Gas fees is not included in the rent by some companies, while some provide free gas up to 100km/day. Also verify with the service provider, whether the rent price includes parking/toll fee.

How to Efficiently Plan and Conduct Your Factory Visits in China

Almost anyone would advise against importing goods from China, without a prior visit to the manufacturing facility. However, this not at all easy, considering the sheer size of the country and its cities. Your factory visits must be carefully planed, so as to save both time and money.

Here is a guide to how you may effectively do it:

1. Visit no more than two factories a day.
When you restrict factory visits to just 2 a day, you can conduct a more comprehensive survey of the premises, which may have to be compromised with, if you have too many visits scheduled for a single day.

2. Sales office or factory?
It is likely that you will be provided with two different addresses of your supplier. If not mentioned specifically, the addresses would be of the sales office and the factory, and it is quite possible that, the two will not be located closely. The prevalent China product sourcing practice is that the importer is led to the factory by the supplier, or his aides, after his arrival at the sales office. However, if you are short on time and want to visit the factory directly, confirm its address first.

3. Hiring a car for the visit.
It is not very difficult a job to find a car-on-rent for your factory visits. On simply surfing the Internet, you will be discovering quite a few options for the purpose. However, do bear in mind that the daily ride limit is 10 hours, which if exceeded, is subject to an extra charge. While some companies provide free gas up to 100km/day, gas fees is not included in the rent by many others. It is also important to verify with the service provider, whether the rent price includes parking/toll fee.

Why You Should Hire Sourcing Companies to Import Products From China?

Without taking assistance from China sourcing companies , it is difficult to import products successfully from there. One of the biggest problems in sourcing is that to find manufactures who can supply products in small quantities. It is a very daunting task to find out such suppliers who are willing to accept your small orders. Sourcing companies have a vast network of small, medium and large manufactures. So, it is not difficult for them to find a suitable one for you who can meet all your business requirements.

China has emerged as a manufacturing powerhouse. Factories and manufacturing units are able to produce items in a less capital and time. China has abundant natural resources. So, it is easy to get raw materials for the production of items. That’s why China has become a favourite manufacturing destination for many businessmen.

Nowadays, importing goods from China is not a big obstacle as before, business to business (B2B) platforms are giving enough confidence to many overseas businessmen to negotiate and make deals with Chinese suppliers. There are many sourcing companies which will make your importing much simpler.

The best part about sourcing companies is that they deal for you in every possible way. Sourcing companies help you in product development, cost negotiation, shipping, warehousing and logistics. They will assess merchandise for you at each stage. They also hire an inspector who checks the quality of the products. It means there is no need to go to the China for QA.

Communicating With Chinese Suppliers Introduced at the Trade Show

A Trade Show is undoubtedly the best place to begin your ambitions of sourcing products from China. This is where most deals initiate. But the Chinese culture is significantly different from the West and most are unsure of the communication process with suppliers. Here’s how it may be approached at 3 different stages:
1. At the early stage – acknowledge the suppliers’ e-mails. Convey that you are still into researching your options; and avoid making queries on product specifications and China product sourcing in general.
2. Later on, you could consider initiating talks with around 20 suppliers, who make products which are familiar to you.
You should kook to create a shortlist of 5-10 suppliers, on a criteria based on a few questions concerning non-price factors:
a) Responsiveness, an understanding of your needs and product specifications.
b) Minimum order quantity; lead time; location – whether the manufacturing facility is situated close to airport or major city for you to visit; location of specific and Key raw material/component suppliers.
3. After having settled on a short list, then you might want to ask them some more specific questions assuming that you have a specific product in mind.
a) It is highly recommended that you try to make a factory visit in this stage.
b) Some important points to investigate would include:
a. Basic credit reference check on the supplier
b. Number of years the supplier has been in the business
c. Previous products/samples that they have produced
d. Ask for a reference (another customer) whom you could contact – possibly a customer in another country.
Make sure you follow the same process for every supplier – then you are able to compare their responses.

Planning a Business Trip to China: Places and Events to Visit

Trade Shows are synonymous with China product sourcing, and though virtual market places like Alibaba are great for finding a deal, few can afford to give the fairs a miss. A face-to-face visit with suppliers can go a long way in strengthening the bonds, which, especially in this part of the world, can greatly help you in securing preferential treatment.
There are a few tweaks to getting the most out of the Trade Shows:
Review the exhibitor list and be prepared with information pertaining to the suppliers you would want to meet at the fair. Without predetermined ‘targets’, it is very likely that you could skip a few good suppliers at the fair
Make sure that you have discussed a few points with the suppliers in your ‘target list’ ahead of the Trade Show. Failing to do so could consume valuable time in enquiry, which could otherwise be invested in getting down to business
It is very important that you have done a fair bit of research beforehand, on the product(s) you are interested in. Coming to a fair, with the hope of finding a new product, which might seem feasible in sourcing from China, may not yield much instantaneous results
But your China visit should not wind up with Shanghai or Guangzhou. The small town of Yiwu is home to the largest wholesale market in the world and offers some great prospects for procuring a variety of commodities for less. The more knowledge you can acquire about a foreign location, the better it is for your business. The Cross-Border E-Commerce Conference in Shenzhen is an excellent platform to pick up a few lessons, and should hence, find a place in your itinerary, before you board your return flight.

Reasons Why You Should Start Importing Goods From Vietnam?

Compared to other countries, most importers had not given Vietnam much consideration for sourcing their products. Indeed, even with the positive economic developments and reforms in Vietnam, it was still known as a normal developing country with having a humble sourcing capability. But after the emerging as a sourcing giant, importers are showing their interest in Vietnam. Importing goods from Vietnam is becoming easier than before as rules and other factors of sourcing are less stringent compared to other countries in Asia. Vietnam continues to develop from a low-cost labour economy to a high-quality enterprise marketplace. According to many economic surveys, Vietnam will make its place in top 10 fastest growing countries in the next few decades.
Vietnam’s manufacturing and sourcing sector now accounts 25 percent of Vietnam’s total GDP, it shows that this country has established itself as the leader in low-cost manufacturing and sourcing. While Vietnam is widely known for its textile sector, there are many other sectors too that show a significant growth in the country. It includes electronics, pharmaceuticals, automotive, Coffee in which importers are showing their interest.
Strengths of the Vietnamese sourcing include:
Having a young population of 90 million.
Cheap labour.
Less stringent rules.
Amongst the highest internet penetration in south-east Asia with almost 32 million having broadband access.
Good manufacturers.
Quality in production and packaging.
Economics & trade data show that Vietnam has proven to be quite capable of producing and sourcing labour-intensive products like leather goods, automotive parts, footwear etc. And, it is now starting investments in technical manufacturing to win over technology and automotive companies of other countries. As a result, many electronics companies are sourcing products from Vietnam in larger quantities.

Vietnam, the Distant Land of Multiple Business Opportunities.

Vietnam is an emerging business destination in Asia. There are many advantages when you are sourcing from Vietnam, almost the same as what China offered in the early 90’s. With many options available for importing, it is better to choose a good sourcing firm in the process. A mediator can have core expertise in solving all the hassles and smoothing the process of import or export. Also, since this is their core business, they are less likely to make mistakes. A good sourcing company can help you with the following
Give you information and contacts in overseas markets
Identify opportunities in the overseas market
Cut the cost of setting up your own offices overseas and recruiting and training your own employees to work there
Keep more control over your product, for example – the last price negotiation, packaging and shipping
They do raw material acquisition for you
They look after the quality control process for you
They make sure that product development should be carried out as per the importer’s requirements
A mediator becomes more important when you are importing from countries whose geopolitical and trade conditions are different from yours. Language also acts as a barrier if you are importing from Vietnam and a few other Asian countries, including China. Nowadays, importing is not a big obstacle as before, business to business platforms is giving enough confidence to many overseas businessmen to negotiate and make deals with Vietnamese suppliers. Importing is quite easy from Vietnam due to less stringent laws. A much improved infrastructure is also helping Vietnam’s position in the international market.

Tips for Keeping Product Costs down While Importing First-Time from China

Being a newcomer in the business of importing products from China, most of the businessmen struggle with the limited resources, time and money. So, in order to sustain in the new venture, you need to follow the following tactics to get the most out of the specific capital you have.
Prefer only one or two products: As a start-up, it is not a good idea to launch your entire products as you have limited resources of capital. It takes a lot of time and money to get right suppliers, samples and logistics. So, it is better to invest them smartly. Experts say that, being a beginner, your only strength is that your expertise, so focusing on one or two products can be a good step.
Keep your design simple: Due to the less experience, many importers spend too much time on adding extra features in just one product. Especially, in the software sector, it is not really particle to get hung up on features that don’t really matter. These types of products can be very expensive and time-consuming too. So, it is better to focus on important features of the product. You can add new features in the product when it becomes popular in the market.
Take assistance from reliable China sourcing company: Seeking help from the good China sourcing company is not only a cost-effective deal but also saves you from lot of troubles that may occur due to less knowledge. Sourcing companies help you not only in finding authentic suppliers that meet your requirements but also sealing deals on your behalf at the lowest possible prices.

Identifying Trading Companies from Manufacturers and Dealing with Them

A Trading Company need not be avoided for doing business. But they must be identified and dealt with accordingly.
A common issue trader’s face when importing goods from China is that of a supplier turning out to be a trading company, instead of a manufacturer. Though often this is a part of a scam, there can be a few merits of doing business with a legitimate trading company.
Most would prefer a manufacturer when sourcing products from China, for the sheer benefit of procuring the goods at a lower cost. A Trading Company would commonly sell at 20% higher. The investigation must begin with a scrutiny of the company’s documents; while an inspection of the facility, personally or by a local contact, will be conclusive. A manufacturer will require a large production facility; a trading company won’t. Besides, not many different materials are to be found at a manufacturing unit: two or three at most. Too many; and you may smell a rat.
Yet, a Trading Company may offer you certain advantages. After having identified one, you may exchange the heftier quotes for ‘by-your-terms’ business. If you want your shipment by the 1st; then the 1st shall it be! A large manufacturer may have his own tantrums; a Trading Company thrives on occasional orders – it is unlikely to let go of any! Which means that you will always be in a good position to negotiate with a Trading Company!
However, a Trading Company will have lesser decision-taking abilities. If you don’t appreciate a multi-tier-approval-system before your suggestion is acted upon, go for a good old manufacturer!

Determining the Legitimacy of a Chinese Company from Its Website

As China has progressed as an international business destination, so has scams become common here. A good number of those who import products from China, take it for granted that a website confirms the legitimacy of a company, which can hence be traded with. Beware! Scamsters easily manipulate information to create well-performing ‘virtual companies’.
AVOID THE TRAPS
Successful sourcing from China will require extensive online research and analysis. Especially if you are located far away, your source for procuring information pertaining to a company could well be limited to its website. All important information, for instance address, registration number etc. provided on the website must match that in its official documents. Discrepancies shall be an indication of a possible scam.
An informative, well laid-out website, seldom arouses suspicion. Instead, it almost instantly, secures the visitor’s trust. This is very well known to Chinese scammers, who attach great importance to building appealing web sites as well as to quick communication. Such socio-tecnical strategies work very well in laying a trap. Though they may fail to deceive an experienced importer, a novice is quite likely to fall prey, without any hint of what’s going on behind the scenes. By the time of realization, the money for ‘the deal that never was’ would have made way into an account in Hong Kong or some ‘Offshore Banking Unit’.
However, it’s also noteworthy that many large operating factories in China do not possess a website, or have one that has not been updated for a decade!
So how do we determine the legitimacy of a Chinese company? That’s something, best accomplished with professional help – and certainly not through the company website alone.

China or Vietnam? Which Destination to Choose for Product Sourcing

Both China and Vietnam are established manufacturing hubs. Choosing the ideal location for your product sourcing requires some research.
While China continues its dominance in outsourced product manufacturing, importing from Vietnam too is flourishing in parallel. Since labour wages are on an average three times lower in Vietnam than China importing goods from Vietnam are on the upswing. However, a few other factors are crucial in deciding where do you source your products from:
1. Product Type. A fact that cannot be ignored is that China product sourcing has been existent since a long time before Vietnam even opened its doors to outsourcing. Hence, the Chinese market is a lot more experienced than the Vietnamese. If the goods that you would be dealing with doesn’t require much expertise, Vietnam will surely save you a lot of money. On the other hand, China would be a safe bet for relatively complex products, which require some level of specialization.
2. Your Existing Supply Chain. Though Vietnam has done a very good job in building its infrastructure, it is way behind China’s. The latter has 7 of the world’s 10 most busy ports, besides a massive network of roadways, railways and airways, which greatly enhances the conveniences of establishing and monitoring the supply chain. Thus China is the obvious choice for complex products requiring various raw materials; though simple products which do not require many components, may be efficiently procured from Vietnam – expectedly in a shorter time.
3. Foreign-Owned Manufacturers. A lot of manufacturing units in Vietnam are actually Chinese-owned. Thus, the experiences of business with the Chinese can be invested in Vietnam too. As a bonus, Vietnamese staff are often proficient in both Chinese and English. This makes transferring existing QC checklists, specification sheets and other documentation much easier.

The Bag Industry of Vietnam: Low Cost, High Quality Product Sourcing

The abundance of natural materials like bamboo, rattan, water hyacinth and seagrass has helped develop the handicraft industry in Vietnam.
This thriving industry is supported by artisans from over 3,000 villages across the country. These handicraft artisans has directly contributed to the development of the present day Bag Industry in Vietnam. Handicrafts are among the many products which business owners, especially from developed nations, prefer importing from Vietnam, rather than manufacture locally. The country’s rich heritage of craftsmanship has a lot to do with it.
Sophisticated manufacturing processes, that increase efficiencies, while manage to keep production costs low, have revolutionized the bag industry in Vietnam. Yet, to stay afloat in the highly competitive market and to encourage sourcing from Vietnam, the quality of products is not compromised with. In fact, since Vietnamese handicrafts are invariably destined for the international market, most factory owners ensure that their products conform to the standards.
For investors operating manufacturing facilities in China, the Bag Industry in Vietnam also serves as a viable alternative.
The competitive advantages include:
Great flexibility in creative design and technical skills capability
Huge pool of employable artisans
Bags manufactured in Vietnam portray a superior level of craftsmanship
Plant-based materials grown locally and available in abundance
Small orders (MOQ) accepted without levy of additional charges
Sophisticated production procedures and inexpensive assembly
While a number of international brands have already established their production units in Vietnam, many others are considering Vietnam as their ‘China Plus One’ business strategy for alternative low cost manufacturing in Asia.

Import of Indoor Furniture from Vietnam Has Some Good Potential

Traditionally, Vietnam has been a producer of outdoor furniture; but of late, the country is rapidly moving towards the production of indoor furniture.
There is already a long list of products which dealers and retailers prefer importing from Vietnam. Here we review the Furniture Industry in Vietnam and explain why you should consider Vietnam as the destination to source Indoor Furniture.
WHY PREFER VIETNAM OVER CHINA?
Vietnam, which is a major exporter of electrical equipment, footwear and machinery, is also the second largest furniture producer in Asia after China.
The country’s furniture industry is supported by the Vietnamese Government Wooden Product Export policy, influencing the industry to deviate from the simpler, less skilled outdoor products to the more skilled indoor furniture products.
On the other hand, recent changes in Chinese Government policies are directed towards the development of high-technology industries. Thus the focus seems to shift away from labour intensive industries such as furniture manufacturing.
THE ADVANTAGE OF VIETNAM OVER OTHER COUNTRIES?
Around half the world furniture production comes from low-income countries. This Asian nation qualifying as one such, implies that there is a significant potential in furniture sourcing from Vietnam. The country also has access to legal sustainable wood, such as rubber wood and cajuput wood.
When it comes to production costs, Vietnam scores over its neighbors Thailand and Malaysia, which are relatively more expensive markets. Meanwhile, Indonesia still has some political issues.
High income countries, such as Germany, USA, UK, Canada and Italy only account for 45% of global furniture production. At the same time, Southern European Countries and Canada have
witnessed sharp declines in furniture production since the beginning of the economic crisis.

Why Importers Need To Learn Some Basics of the Chinese Language

A tricky aspect of China product sourcing is having to deal with the Chinese language and culture. Language challenges can result in misunderstandings and mistakes with orders. Though not absolutely essential to successfully import products China, some basic understanding of the local language will definitely help you to better communicate with your supplier.
The Chinese language is vastly different from English. The most striking contrast is that, unlike English, in which written words are simply a pronunciation guide for the spoken words; there is absolutely no connection between written and spoken Chinese.
The Chinese script consists of numerous characters, which represent basic objects and ideas. If a specific set of characters are not available for a particular reference, multiple characters are combined to represent it through something similar to it. Thus, Chinese characters are absolutely critical to the Chinese language. For instance, the characters for ‘Fire’ and ‘Vehicle’ would be combined to represent a ‘Train’.
Ideally, your supplier should be able to look up your words in a dictionary. But that may not be all that straightforward. The more complex your product, the greater will be the difficulty in explaining it. There lies the merit in communicating through pictures. Unlike words, pictures can hardly be translated incorrectly.
Ensure that your supplier recapitulates what you convey to him; especially if you’re describing anything technical and subject to confusion.
Miscommunications can cost you time, money and cause a great deal of frustration. Some homework early on though, will keep nasty surprises from ringing your doorbell.

How a Private Labeler Can Increase His Competitive Advantage

Until a few years back, sourcing China would simply involve procuring the products and listing them on eBay. Many still believe, that’s how it ought to be for private labelers. But the dynamics of the market has changed, and successful sourcing today, would require you to do a bit more:
The demand for certain products can fade pretty rapidly. Before importing goods from China, verify what is currently in demand in the target market; then make them available as quickly as possible
Break your shipment into smaller segments after arrival, to ensure better logistics management
Quality control is a no-tolerance issue. Take measures to ensure that your customers receive only the best quality products
Ship orders efficiently to customers, with no delay
Create thorough and informative product descriptions, accompanied with photos and perhaps videos
Ensure high-quality packaging and proper product documentation
Promote the products on different channels including: listing products on Amazon, eBay, and your own website. Seek professional services for managing PPC campaigns display advertising
Maintain a dedicated team for customer service, which will be handling customer inquiries via email and telephone; besides warranty claims, etc.
As the consumer market has grown, so has their expectations. It’s cut-throat competion out there, and those offering sub-standard service, is bound to perish. However, if private labelers are able to adapt their strategies as per modern trends, the internet can take businesses to heights, which otherwise, may not have ever been possible.

Doing Business in Vietnam: The Different Barriers to Look Out For

Startlingly low costs of production, proximity to important ports and a rapidly developing infrastructure contribute towards large scale importing goods from Vietnam. However, there still are a few challenges to doing business in this country:
STARTING A BUSINESS
Getting started in Vietnam is complex, with as many as 10 different procedures to be undertaken. Most overseas companies are unfamiliar to the tasks facing new corporate entities.
DEALING WITH CONSTRUCTION PERMITS
Getting permits for construction in Vietnam involves 11 procedures and requires interaction with several official departments. This could take up to 110 days.
GETTING ELECTRICITY
Procuring an electrical connection for a startup in Vietnam is among the most rigorous tasks. It may take up to 115 days to complete and cost a significant percentage of income per capita.
REGISTERING PROPERTY
The process of registering property takes 57 days to complete – significantly higher than the Organization for Economic Cooperation and Development (OECD) norm.
GETTING CREDIT
Vietnam has a pretty stable credit environment, where obtaining capital is a relatively smooth process for businesses. However, the absence of a private credit bureau can make the process a little more complex for overseas firms.
PROTECTING INVESTORS
Although sourcing from Vietnam is a major contributor to the country’s economy, Vietnam fails miserably in investor protection.
PAYING TAXES
With 32 corporate tax payments to be made each year, taxation is a burden in Vietnam, which takes an average of 872 company hours to complete.
TRADING ACROSS BORDERS
Though cross-border trade is inexpensive, it is also complicated and requires a stream of documentation for both importing and exporting.
ENFORCING CONTRACTS AND RESOLVING INSOLVENCY
Enforcing contracts takes 400 days to complete and 34 procedures. Resolving insolvency is a far more laborious process, taking five years on average to complete and with a low recovery rate.
CULTURE
Vietnam is a collectivist country. Here, community concerns always comes before business or individual needs.

Contemporary Vietnam: The Exemplary Economic Reform and What It Means

From being among the poorest countries in the world, Vietnam is today considered more competitive than six European Union countries. This enormous transition has taken less than 30 years. Already one of the biggest mobile phone exporters in the world, importing from Vietnam flourishes in a number of other sectors too.
THE ROAD AHEAD
Vietnam is a leading manufacturing hub today and there is a continual effort to increase sourcing from Vietnam, to further develop its economy and to strengthen its position as a competitive market.
With new Free Trade Agreements (FTAs) that Vietnam has agreed to participate in, FDI and exports are expected to rise. FTAs will also be influencing the creation of more pro-business policies
An increasing demand for domestic and foreign products in the upcoming years by an evolving middle class can be foreseen from the country’s stable GDP growth
However, Vietnam also faces a few challenges, which must be overcome to continue its economic momentum, and to become a more efficiency-driven economy:
Two key factors for building competitiveness in the long run are higher education and training, which leads to employee productivity and technological readiness. Incidentally, Vietnam needs much improvement in these areas
The country also needs to revamp its financial system in the short to medium term. Too many banks, as well as non-performing loans exist in the market. Consolidation of the banking sector is crucial. The interrelation between the banking system and state-owned enterprises is also needed to be reduced.

Businesses Benefit as Vietnam’s Export and Import Tax Law is Revised

With amendments to the country’s Law on the Export and Import Tax, sourcing from Vietnam will be more advantageous than ever. The new regulations include separation of preferential tax rates into preferential tax rates, special tax rates and ordinary tax rates. The ammendments have been incorporated to comply with the tax reduction commitments in the framework of export taxes under several Free Trade Agreements (FTAs), such as TPP and Vietnam- EU Trade Agreement. The revised law is in line with the trend of the international integration and the commitments relating to export duty. This will enable to create conditions for the implementation of tariff commitments in which Vietnam is participating, while also helping importing from Vietnam.
The ammended Import and Export Tax Law adds provisions on the tax rates applied to goods imported from non-tariff zones into the domestic market. The preferential tax rates are applicable to the imported goods originating from non-tariff areas and from countries with most favored trade relations with Vietnam. The special preferential tax rates are applicable to imported goods originating from the countries or groups of countries or territories that have special agreements on preferential import tariffs in trade relations with Vietnam or goods from the zone import tariff on the domestic market to meet the rules of origin from the country, groups of countries or territories that have special agreements on preferential import tariffs in trade relations with Vietnam.
The ordinary tax rates applicable to goods imported under the circumstances that are not applied to the preferential rates or the special preferential rates above are defined by 150 per cent compared to the preferential tax rate of each category, respectively.

Doing business in Vietnam: Understanding the Norms of the Region

Statistics insist that sourcing from Vietnam is profitable. However, to ensure your success in this emerging market, a local partner and thorough research are essential. Though practices vary quite a bit from the West, certain limitations should not prove to be a deterrent from building trade ties. The country has some very promising prospects for investors.
Here are a few things to keep in mind while importing goods from Vietnam:
The Vietnamese law is subject to frequent changes. This often creates difficulties in interpretation, application and compliance. A local partner, familiar with the country’s legal system, would thus be of great help
The level of bureaucracy can be challenging in an emerging market, which impacts many investors. Careful planning is hence, a must! Get an understanding of the most critical permits and how to comply with all the local regulations.
The infrastructure of Vietnam is modern in urban centres, but basic in the more regional parts. However, the evolution is fairly quick overall. Ensure that you are prepared for the limitations you may face
Negotiations and processing of official documents and permits can take a long time. Here, patience is the key
A cultural trait of Vietnam, typical of several other Asian countries is that when someone disagrees with you, they’re likely to remain silent. There are many other local customs, which may be observed for better communication
The Vietnamese give much importance to relationships. Hence building a solid rapport with your partners and contacts will go a long way in influencing the success of your ventures
A typical Vietnamese name consists of the family name, middle name and then the given name, in that order. When addressing someone, use his or her given name with the appropriate title.

Why the Electronics Industry of Vietnam Allures Foreign Investors

While sourcing from Vietnam thrives, the country’s electronics industry shines bright.
With the largest turnover and market share growth of electronic exports in ASEAN, Vietnam now stands as the 12th largest electronics exporter in the world and the third largest in ASEAN.
To take advantage of preferential tax deals under free trade agreements such as the TPP and AEC, many manufacturing units have shifted to Vietnam in the recent past. This has greatly encouraged importing goods from Vietnam.
Investors, in order to take further advantage, access ASEAN or TPP member markets to invest in Vietnam more intensively and transfer technology to achieve a higher localisation rate.
Large-scale mobile phone factories are a major contributor to Vietnam’s economy. Samsung alone has invested $2.5 billion and $2 billion in two facilities at Bac Ninh and Thai Nguyen respectively; besides another $1 billion on a manufacturing factory in HCM City.
Thai Nguyen Province and Hai Phong City have attracted investments to the tune of hundreds of millions of dollars by electronics component producers.
However the electronics supply chain hasn’t benefited much from the domestic electronics enterprises. Of the 80 satellite enterprises producing components and accessories, only 10 per cent are Vietnamese. These companies mainly provide printing and packaging, which have the lowest added value.
Other countries in the region also offer stiff competition. When the investment incentive period ends, investors may move to other destinations.
The FIA recommends enterprises build science and technology policies to encourage technology transfer, training, research and development; sign technological co-operation contracts with large countries, connect research institutions and businesses and select products and sectors for research priority – in order to attract more FDI into the industry.
Domestic and foreign investors should feel secure about investing, transferring technology and developing products. It is therefore absolutely necessary that Intellectual Property Laws are tightened.

The Market of Vietnam is of Great Interest to Foreign Investors

According to a study conducted by an expert from the Russian Institute for Strategic Studies on Asia-Pacific and the ASEAN, Vietnam has a highly competitive economy and an attractive market for investors.
Maria Stanislavovna Zelenkova, in a recent interview to Vietnam News Agency, referenced the developments in importing from Vietnam. The country’s economic achievements is evident from a 6.6 percent growth and expanded economic ties with 200 partner countries around the world.
Sourcing from Vietnam has traditionally been in agriculture and light industry. But now, the shift seems to be towards heavy industries and science-technology, she said. Zelenkova suggested that Vietnam should focus on new technologies and new economic sectors, including nuclear energy.
Stanislavovna said that nuclear energy would become an important factor in the Vietnamese economy. As such, Vietnam should firmly believe in Russia’s support, since Russia has the world’s leading technology in nuclear energy and human resources training.
Stanislavovna added that the State’s suitable policies on investment, real estate and business incentives, massively appeals to foreign investors. Vietnam’s skilled workforce is also a major boon, which helps attract investments.
The Russian expert also said that the Vietnam-Eurasian Economic Union free trade agreement would bring a lot of benefits to Vietnam, while expressing great confidence in the prospects of the agreement.
She insisted that Vietnam has a considerable economic growth and hence, the country could join the deal not only as a key member, but also as an investor, capable of competing with other countries, adding that Vietnamese firms should do their best to enter the EAEU market as an investor.

What Factors should be Considered while Developing a Customised product in China?

If you are looking for Chinese manufacturers who are willing to develop customised products, you need to consider some important factors before approaching them. It is seen that some inventors have no idea about what includes in the product development phases. Here are some guidelines which can help in sourcing invented products from China.
Before finding a reliable supplier you need to seek the answers of the following questions.
What type of engineering skills you are looking for?
Electrical
Mechanical
Other
What type of factory would you prefer?
Small
Medium
Big
Who will take part in the development process?
The OEM manufacturer
R & D Company
The trading company
You can face the following challenges while obtaining China product sourcing.
OEM factories do not accept such projects with incomplete product design. But still, if anyone accepts your offer, there is a large possibility to hire engineers having average skills.
Factories do not give your invoice before manufacturing the product. The cost will be decided as per the product price which would be finalised after completing the development process.
Engineers involved in the development process, need to be familiar with how Chinese production operates. If designs are not suitable to the Chinese production process, the offer might be rejected from manufactures. In this case, you will have to start the development phase again.
Experts say that, the best way to tackle all challenges is that to find such manufactures who are expert in manufacturing similar products. Choose Chinese engineers as they not only aware about the China manufacturing process but also can guide supplier while manufacturing.

China’s Business Climate is Evolving – Shows New Sector Reports

China Product Sourcing will witness some changes in the coming years. According to a recent survey, 20 specific industries in China are reflecting a significant change in its business environment. The reports are based on data collected from around 500 foreign companies operating in China and sourcing.
The American Chamber of Commerce in China, based on its annual survey of member companies, released this third Business Climate Survey Industry-Specific Reports. The changes in American companies’ perceptions of the investment environment, profitability, investment expansion plans, human resource issues, and top business challenges and opportunities are shown in the reports, on a year-by-year basis.
The industry sectors mentioned in the reports are:
Aerospace
Agribusiness
Automotive & Transportation Vehicles
Chemicals
Consulting Services
Consumer Products
Education
Financial Services
Healthcare Services and Products
Hospitality, Travel and Leisure
Legal Services
Machinery, Equipment, Systems and Controls
Media and Entertainment
Oil & Gas – Energy
Manufacturing and Engineering
Real Estate and Development
Retail and Development
Telecommunication Hardware
Telecommunication Services
Transportation and Logistics
While service-based companies are very optimistic on the future opportunities, the Chinese market is viewed as being less favorable than before by Industrial and Resources member companies.
However, importing goods from China is still a very feasible option for European and American traders. Though production costs in China has shot up over the years, it is still way cheaper than it is in the West. The Asian nation is abundant with outsourced manufacturing projects, and hopefully, the Industrial and Resources sector too shall bounce back in the coming years.

How to Find, Verify and Initiate Ties with a Chinese Supplier

Many western economists predict that China will soon become the largest economy in the world. Despite the rise in cost of manufacturing, US and European retailers and manufacturers still consider importing goods from China, a very feasible option. However, suppliers in China are facing challenges related to cost overruns, labor turnover, uncertainty about government regulation, lack of skilled workers who can support innovations etc. Understanding the challenges the supplier is facing will help you develop your capability to negotiate, win the suppliers’ trust and at the same time, provide signals for impending problems, that might arise and thereby, reach a mutually beneficial agreement on sourcing products from China.
The simplest and most cost-effective place to commence a search for suppliers in China is on the Internet via B2B sourcing platforms like Alibaba, Global Sources and Made-in-China.com. On these sites, thousands of suppliers are listed and you can simplify your search and increase the number of legitimate sources by filtering results for only those suppliers who are verified and accredited. Attending Trade shows in China is another way to find legitimate suppliers. By attending trade shows, you get the chance to talk to potential suppliers face to face about their companies, products, quality-control procedures and other key business areas. Find out whether the supplier has the essential production capability, certificates, and the necessary technology to meet your expectations in terms of quality, quantity, and delivery times.
Once you identify, verify and consequently, vet a prospective supplier, you can purchase products directly from them or through a B2B sourcing platform.

Vietnam is Reportedly Emerging as the Next Sourcing Hot Spot

As inflation is on the rise in China, an increasing number of suppliers and retailers are turning to importing from Vietnam, according to a survey by Barclays Capital.
The participants of the survey comprised of businessmen, who had been currently sourcing from China. As much as 13% of the respondents said that they were now considering importing goods from Vietnam. Incidentally, Vietnam figured as the most preferred alternative to China, among the countries where these respondents were willing to move their import source to.
The rising costs in China did reflect on this trend. More than two-thirds of those who took the survey, cited this as a major concern. However, a large number of retailers were still reluctant to shift their buying offices.
In an interview to The Times, Richard Lowe, head of retail and wholesale at Barclays Corporate, said:
“A lot of other places were talked about, but Vietnam had risen above the others, particularly for clothing. There is still an ingrained reliance on China. It’s partly about the importance of relationships – you know people and because you know them you think you can negotiate. There are also quite a lot of risks involved. You have to get people out [to new destinations] and do all of the necessary quality assurance.”
It is thus evident, that though significantly lower manufacturing costs are luring investors to Vietnam, China’s very well-developed infrastructure still succeeds in retaining their vested interests. Albeit too far-fetched to pitch Vietnam as the successor of China, the country is surely making its presence felt in the international trade market. With a revamp of its infrastructure, Vietnam has the potential of becoming the next sourcing hot spot.

How to Deal with Your Chinese Supplier’s Outsourced Production

As more and more traders continue sourcing products from China, Chinese manufacturers are often under tremendous pressure to deliver huge quantities of goods in very little time. The solution seems to have emerged in the form of ‘Outsourced Production‘. There’s nothing really wrong with it. In fact, in almost all industries, some component of the finished product, is manufactured by a third party. The idea is that, when you are importing goods from China, a clear policy must exist between you and your supplier, as to what are to be produced in-house, and what may be outsourced.
This aspect, of your products being manufactured at a different facility, should be taken seriously. You have selected your supplier, presumably, after much investigation, which includes that of his factory. But, a vendor company, which you have not scrutinized, may not have the production capacity, your products require.
The production facility, with a picture of its GPS coordinates must be mentioned in your contract. This is where the inspectors will be arriving.
The issue of ‘outsourcing’ is also one that may be negotiated. For instance, you could allow certain parts of your product to be manufactured in a different factory; but, demand a discount for the relaxation. Also, you should reserve the right to reject a shipment if any ‘unauthorized outsourcing’ is detected.
Production outsourcing needn’t necessarily hint at a scam, it is often a means to ease the workload. But as a buyer, you must secure yourself. Having the points agreed upon in writing will not only safeguard your interests, it will also help in quality concerns easier.

Exploring China: The 3 Most Promising Regions for an Importer

You needn’t travel the length and breadth of China to find your supplier. Explore its 3 most promising regions instead.
Importing goods from China is the obvious solution for traders looking to procure quality products at competitive prices. But when it comes to finding the right supplier for a product, the sheer size of the country may make the search process seem daunting. However, there is a smarter way out! An understanding of the geography of China will be helpful in locating ‘the man’, without having to forage the entire mammoth country.
Earth Science is largely responsible for the flourishing trade anywhere in the world. Almost as a ritual, your Chinese supplier is likely to be found in either The Pearl River Delta, The Yangtze River Delta or The Bohai Rim Economic Circle. Hence, only these three regions, along the east coast, is where your focus should be, when sourcing products from China. While the country’s top commercial destinations of Beijing, Shanghai and Guangzhou are all located in these regions, the western province is of little importance to importers.
On further exploration of these regions, you will find that certain cities or regions within these regions, specialize in certain products. Procuring your goods from a ‘hub’, is likely to get you better quality. Another important consideration is, while dealing in multiple products, it would be beneficial in selecting suppliers who are within close proximity to one another. This results in reduced freight costs. Also, if you are required to travel frequently to your suppliers, with them being closely located, your task becomes infinitely easier – saving you volumes of invaluable time!

How to know if the production may not go well?

Before manufacturing starts, every importer should identify the signs which indicate the possibility of product manufacturing not going very well. Manufacturing troubles occurring at beginning of the project may lead to some serious consequences, which include heavy financial loss to the importer. To avoid this bad beginning to your sourcing products from China, you need to identify the signs that help you to avoid frustration.
It is obvious that a manufacturer fails to send perfect sample in first attempt. So, it is better to see the first sample as a draft to know what to amend. But if the manufacturer takes several attempts to get the sample right, then it is a sign of lack of understanding of your vision and requirements.
If the supplier shows you low motivation from the beginning, then it is better to avoid such supplier. When the response is sluggish, it clearly means the supplier is mostly focusing on its other tasks rather than giving preference to your order. At this point, it is better to send them a direct email with direct questions and give them a deadline for sending the sample.
While importing goods from China, not everything comes from the manufacturers’ side. Buyers’ attitude also can be responsible for the unresponsiveness of suppliers. The supplier may lose the interest in your order due to the following reasons.
Taking a long time to sign-off production
Delay in all process from the buyers’ side
Mismanagement in ordering process

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