Remark: Readers to use their best judgment in using the information provided, and not take unnecessary risks in importing.
These days, it is not difficult to find vendors overseas, particularly those located in Asia. Here are a few places you can search for products and vendors:
- Hong Kong Trade Development Council
- Global Sources - Manufacturers & Suppliers Directory
The largest website is perhaps Alibaba, a Chinese e-commerce company that provides consumer-to-consumer, business-to-consumer, and business-to-business sales services. It is necessary to go through a process of vendor qualification before you should place your first order. Some of the considerations are:
• Manufacturer or trading company
• Years in business
• Exports to North America
• Size of company
There are manufacturers and trading companies listed in Alibaba, and in most cases, it may be preferable to work directly with a manufacturer to obtain competitive prices as well as to reduce the chances of errors due to misunderstandings between the trading company and the factory. Trading companies are middlemen, who facilitate communications and perhaps monitor quality assurance, but may place their orders with different manufacturers for the same product depending on product availability. There is a case to work with a trading company if they offer a wide range of products of interest to you made by different manufacturers. The trading company can coordinate production and shipping.
Since there is a large choice of vendors, it would be preferable to source from one that has been in business for 5 or more years and has more experience in production and exports.
Products for the US market will have different quality requirements and specifications from those sold in the domestic Chinese market or the Middle East. If possible, always select a vendor that exports the majority of their products and with at least 30% of the production for the North American market.
Since you intend to gradually build your business to a large size, you would prefer to work with a vendor of a reasonable size, so that they will not have any difficulty producing your large orders in the future. From the Alibaba website, you can check out the factory facilities, machinery, number of workers, etc.
Apart from the basic vendor qualifications, you will have to make a judgment as to the product quality, pricing, and ease of communication with the potential vendor.
If you have the opportunity, visit the overseas vendor yourself to check out the manufacturing facilities and meet the key staff. You can see several vendors on one trip, and attend tradeshows as well.
Prices quoted by the overseas supplies could be based on:
• Free on Board (FOB)
• Cost & Freight (C&F)
• Cost, Insurance & Freight (CIF)
• Landed Duty Paid (LDP)
Ex-factory prices are more common for domestic purchases, and the buyer has to pay all the shipping charges after the goods leave the factory. Most vendors in Asia will sell their products on a FOB basis, which includes the delivery cost to the sea or airport, such as FOB Shanghai port.
Some vendors that have a good relationship with shipping companies and can obtain competitive shipping rates may offer prices on a Cost & Freight basis, such as C&F Los Angeles port, while others may also include insurance, such as CIF Los Angeles. Foreign suppliers that are very experienced in exports to the USA, may go a step further to quote prices on a Landed Duty Paid basis, and the price will include the shipping cost to the USA port, import duties, customs clearance, and freight forwarding charges.
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