Drop Shipping & Wholesale Product Sourcing: Selected Resources for Online Business in Canada and the U.S.
Stockless Retailing for Tough Economic Times

Overview...

China's GDP grew 11.4 percent in 2007, to 24.6619 trillion yuan (3.43 trillion USD), 0.3 percentage points higher than 2006 (11.1%), according to the China National Bureau of Statistics (1). In the Michigan State University (MSU-CIBER) annual index of Market Potential Indicators for Emerging Markets - 2008, the top three emerging markets are Hong Kong, China, and Singapore. Buying from China is an important business option in light of the rapid development of manufacturing capacity, the range, comparative quality and significantly lower cost of Chinese-made goods.

Free Shipping Deals at Light In The Box!

If you're importing products from China or utilizing the services of a China gateway distributor to acquire products wholesale and drop ship them to your customers, there are several things you need to consider. It is prudent to choose your products carefully and work with organizations that offer buyer protection (e.g., escrow service, satisfaction guarantees, etc.). There's an interesting series of videos by Andrew Minalto, who examines some of these issues, and we explore other considerations below.

There have been many recalls of China-manufactured products since 2007. There is reason to believe, however, that government policy in China will ensure more effective quality control, even as improved regulations and new legislative initiatives in other countries are promulgated to protect their citizens against hazardous imports from China.

In his recent book, Why Your World Is About to Get a Whole Lot Smaller, Jeff Rubin, former chief economist at CIBC World Markets Inc., predicts that global economies will regress and local economies will emerge as oil and gas prices once again rise. Transportation will become too costly to justify the levels of import and export. This idea is not without controversy, notwithstanding the fact that oil and gas are on the rise again, but there's a coincident set of developments that also bears on the equation.

Money is tight for many who have lost jobs, savings and pensions, and there is growing reaction to the fact that many US and Canadian companies have contributed to this by outsourcing their manufacturing to China. While some consumers care little about where what they want has been manufactured, others are bemused or troubled by the fact that China-made products and produce is pervasive, overshadowing more regional offerings. In my local superstore, for example, the only garlic available is organic, coming from California, and garlic from China! "We never carry locally grown garlic," says the produce clerk; "I don't know why." And then there's the announcer in a local television commercial, exhorting us to buy Canadian-made barbeques and avoid this "cheap crap" (he quickly raises and lowers the apparently flimsy lid of a shiny new barbeque) made in China.

Now, obviously, in addition to the recalls and items of lesser quality, there are many good products coming from China. With diligent sourcing and targeted niche marketing, substantial profits can still be made from the sale of quality products. Choose your niche carefully. And be prepared for surprises.

An interesting set of videos by Andrew Minolta (2008)
How to import cheap products from China to sell on eBay (without being scammed).
Part 1

Part 2

Part 3

Part 4


Notes on "Made in China" Product Recalls...

Paul Midler, president of China Advantage, has been involved with China for more than 15 years, and in the course of his manufacturing career, has had dealings with thousands of Chinese factories.1

In an article entitled Dealing With China's 'Quality Fade' (07.26.07), he defines as quality fade:

...the deliberate and secret habit of widening profit margins through a reduction in the quality of materials. Importers usually never notice what's happening; downward changes are subtle but progressive. The initial production sample is fine, but with each successive production run, a bit more of the necessary inputs are missing... [Read more]

CNN's Lisa Sylvester reports on dangerous drywall imports from China, and how homes across the U.S. are affected. (30.03.09)

Though Midler provides many examples to illustrate this point, he also believes the situation is "by no means hopeless", adding that Japan once had a reputation for manufacturing products of poor quality. The key to resolving the situation has to do with incorporating "a habit of quality into the culture". While "China is not an easy place in which to do business," he writes in an open letter on his website, "I think it is worth the effort".2

Quality controls are being implemented in China, by other countries that import made-in-China goods, and by companies that outsource manufacturing to China. These developments take time, however, and the recent spate of product recalls has raised concerns among entrepreneurs interested in dealing with wholesale drop shippers of products from China. We recently posted an article regarding the quality of products manufactured in China, citing the opinion of Peter J. Williamson, professor of International Strategy and Asian Business at INSEAD and coauthor of Dragons at Your Door: How Chinese Cost Innovation Is Disrupting Global Competition:

Don’t panic over a few high-profile blunders by Chinese sourcing partners — as damaging as they may have been. With smart management, there remains enormous opportunity for profitable relationships.

The second danger in the reaction to the latest recalls of Chinese products is that managers will give in to the myth that all Chinese competitors are simply low quality, low price. The lesson here is simple: don’t allow such a delusion to cloud your thinking. If you do, you are likely to miss the fact that the best Chinese companies, such as Lenovo, Huawei, Haier, along with many others, are using cost innovation to rewrite the rules of the global competitive game. The very real risk to American business is that management will not see China’s emerging dragons coming with high technology at low cost, variety at low cost, and specialty products at mass market prices until it’s too late.

On this page and in separate reviews on this site, we profile four firms that provide mechanisms designed to protect buyers from counterfeit products or products of poor quality. We recommend that you learn as much as you can about your prospective suppliers, purchase in small quantities first, and have your order shipped to your own address. Once you've gone through the process, you can proceed with greater confidence.

“Made in China” in many cases is equivalent to “Buyer Beware” as more and more consumers apply caution when purchasing consumer products imported from China. Just recently, the Los Angeles Times and Associated Press reported on lawsuits against national brand toy retailers as a result of defective toys made in China.

Then, this week, Chairman Tenenbaum addressed attendees at the Association of Home Appliance Manufacturers’ 2009 Product Safety & Liability Conference, explaining that the Chinese government is working closely with the CPSC to police noncompliant products being sold in the United States.

Beginning October 21, Consumer Product Safety Commission Chairman Inez Tenenbaum will lead a delegation of CPSC representatives to China for the 3rd Biennial United States – China Consumer Product Safety Summit. The Summit – which will bring together the CPSC and its counterpart agency, the General Administration of Quality Supervision, Inspection, and Quarantine of the People’s Republic of China (AQSIQ) – aims to build upon the activities undertaken by the agencies since the last Summit in 2007.

The Summit of 2007 focused on the importance of manufacturers adhering to voluntary product safety standards, meeting the requirements set forth by the United States; as well as an information exchange process on recalls and product safety matters.

With new legislation in the Senate that would extend U.S. regulations to foreign manufacturers, the Summit of 2009 will likely take product safety discussions a step further.

The joint efforts of the CPSC and the AQSIQ will undoubtedly focus on helping to assure that consumer products meet voluntary and CPSC standards and do not present an unreasonable risk of injury.

This effort, along with the Commission joining forces with the U.S Customs and Border Patrol to prevent non complying consumer products from entering the U.S. should dramatically reduce the number of dangerous consumer products from entering this country.

However, importers and retailers must still remain vigilant in order to assure products they sold are not the cause, or the potential cause, of injuries. They are required by law to report to the agency information that could create a substantial product hazard. It is more important than ever to make sure that hazardous products are not in the hands of the public and are recalled as effectively as possible.

China Gateways

Sourcing product from China is best undertaken through mechanisms that ensure quality control and buyer protection, escrow programs.

AliExpress

Tariffs and Tax - Resources

Source:
Chinavasion Support Center
(Accessed 30.05.09)


Customs Clearance Issues

All imported goods are subject to Customs clearance in every country. When you buy from Chinavasion, the goods are sent from China. Therefore you are importing, and you are the importer responsible for the goods when the goods pass through Customs in your destination country. According to our general terms and conditions, you may order anything you like from Chinavasion and we will fulfil your order, but it remains totally your responsibility to find out in advance if the products are permissible to import into your destination country, and if so what clearance requirements, taxes, policies etc apply in that country. Chinavasion cannot and will not offer advice or pre-shipment information on Customs issues in any regard.

From over 3 years of shipping thousands of orders a week, we can confirm that in over 99.9% of shipments from Chinavasion there is no issue whatsoever with Customs clearance. Furthermore in the majority of the rare cases subject to a delay in Customs, the goods are released and delivered successfully. This is because the clearance via normal shipping methods (couriers or post) is handled professionally by the shipping company, and Chinavasion is an experienced provider of correct shipping documentation and compliant products and packaging.

You need to be aware that, since any order you make on Chinavasion.com will pass through your country's Customs, the Customs have the right to hold and inspect your goods according to their policies.

Every country's Customs has different policies, and these policies can vary substantially, for example [...]
[Read More]
In CanadaIn Canada, entrepreneurs can find the relevant tariff and tax information at Canada Border Services Agency
— see especially MEMORANDUM D8-2-2.
In the U.S.A.In the United States, Tariff and Tax Information is provided by the
U.S. Department of Commerce, International Trade Administration.
To obtain U.S. tariff rates for specific imported products, to check on regulations such as import quotas, or for general import information, contact the US Customs office nearest you or call 1-877-287-8667 (outside Washington D.C. only)...
In the U.K.In the U.K., visit HM Customs & Revenue:
See also China-Britain Business Council - Market Intelligence - Import & Export - Importing from China.
In AustraliaIn Australia, visit Australian Customs Service:
In New ZealandIn New Zealand, visit New Zealand Customs Service:
Get a FREE Global Sources e-magazine
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China Sourcing Reports

Inside these e-magazines, you'll find:

  • New product profiles - Including pictures and top-line specifications
  • Insights into new development and trends in your industry
  • Updates on pre-screened suppliers in China and throughout Asia.

Global Sources' 13 industry-based titles provide more profitable sourcing with quality supplier and industry information every month, all year round. Each monthly issue includes new product information, with full-color photos; insights into the latest supply-market and design trends; industry specific trade and sourcing articles; in-depth profiles of featured suppliers; and contact details for the hundreds of suppliers listed. Normally $20 USD, choose one free title free — if you want to continue receiving the e-mag, you can subscribe.

Global Sources delivers information that trading partners need to meet and do business. Their China Sourcing Reports are in-depth studies, concentrating on specific sourcing industries in greater China. These reports, developed from unbiased assessments based on personal factory visits by Global Sources researchers, interviews with senior managers, and thorough research by Global Sources' team of experts, are updated every 12 to 18 months in response to changes in the particular industry covered.

Currently, there are 183 China Sourcing Reports. These are organized in categories: Auto Parts & Accessories, Baby & Children's Products, Computer Products, Electronic Components, Electronics, Fashion Accessories, Garments & Textiles, Gifts & Premiums, Hardware & DIY, Home Products, Security Products, Sports & Leisure, Telecom Products, and Rest of Asia.

Source: China Sourcing Reports - FAQs

Each report contains:

  • A comprehensive overview of the featured industry, including the latest information on R&D developments, QC controls, raw-material costs, expansion and consolidation plans, and more
  • In-depth profiles of key suppliers that may or may not be Global Sources clients. These are unbiased assessments based on personal factory visits by Global Sources researchers, interviews with senior managers and thorough research by Global Sources' team of experts
  • Brief profiles or profile tables of other key suppliers in the industry. This information offers insights into supplier's capabilities, popular export models, future plans and more
  • Contact details (verified as at time of publishing) for all suppliers featured in each report: phone and fax numbers, and e-mail and homepage addresses

Some reports also contain:

  • Supplier ranking tables — that show top 10 suppliers by export sales, top 10 suppliers by capacity, top 10 suppliers by output
  • Product Comparison Tables — that show model names and numbers, multiple key features, FOB prices (US$)
  • Product Galleries — that show model names and numbers, key features, minimum order quantity, FOB prices (US$)

To see a list of current titles, and for complete information on each report,
please visit ... China Sourcing Report Overview.

FREE China Sourcing Magazines

Global Sources also publishes 16 monthly sourcing magazines, each covering major industry-specific products:

  • Auto Parts & Accessories
  • Baby & Children's Products
  • Computer Products
  • Electronic Components
  • Electronics
  • Fashion Accessories
  • Garments & Textiles
  • Gifts & Premiums
  • Hardware & DIY
  • Home Products
  • In-Car Electronics & GPS
  • India Products
  • Machinery & Industrial Supplies
  • Medical Products & Supplies
  • Security Products
  • Solar & Energy Saving Products
  • Sports & Leisure
  • Telecom Products

These sourcing magazines and the website, Global Sources, complement each other, enabling you to source products and suppliers, and obtain supply-industry information and analysis whenever you need it. Global Sources Sourcing Magazines are monthly industry-specific sourcing journals that keep buyers updated on the latest products launches and reviews. Detailed product and supplier advertisements comprise over 75% of the magazine content.

In each issue you'll find:

  • Insights into the latest supply-market trends.
  • New product information, including full-color photos.
  • Contact details for qualified advertisers from greater China.
  • Contact details for qualified advertisers from greater China

These magazines are free, via subscription or digital download.


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