by Claudia Bruemmer

If you have a new product and are looking for manufacturers to produce it, you might want to consider manufacturers in China. While the importing process is complex, it can also pay big dividends in short-term and long-term profitability. You don’t have to travel to China yourself to outsource manufacturing; you can hire local agents to act on your behalf. Since the globalization of trade, many businesses have chosen to manufacture abroad and import products into the U.S.

If necessary, you can hire an import agent to do all the leg work for you when dealing with foreign manufacturers. Import agents can screen the manufacturing facilities, negotiate pricing, arrange transportation and help move the shipment through inspection. You can hire an agent in your selected manufacturer’s location. The advantage is you would have someone negotiating for you who understands the culture and knows the local economy; whereas, you may not have that knowledge yourself.

Once you select a manufacturer to work with, you or your agent should discuss the pricing and trade relationship. Then, obtain product samples and review them for quality, as well as the packaging, instructions and any other collateral. Agree on shipping and payment terms, as you may have to pay a nominal fee for the samples. You or your agent should gather all the necessary information for placing a trial order and include as many details as possible in your purchase order.

It’s important to understand shipping terms and verify that understanding with the manufacturer before placing an order after reviewing samples. The most frequently used terms are FOB, CIF and payment terms. FOB (Free on Board) means the seller is required to deliver goods on board a vessel designated by the buyer; the seller’s obligation ends when goods pass over the ship’s rail. CIF (Cost, Insurance and Freight) means the seller is required to arrange for the carriage of goods by sea to the port of destination, providing the buyer with the documents necessary to obtain the goods from the carrier. If you have an import agent, that person will negotiate the trade terms for you.

It’s also important to understand payment terms, which are negotiable. Some manufacturers require 30 percent payment when you place your order and the remaining 70 percent when the product ships. The down payment provides the manufacturer with funding necessary to begin production.

The inspection of goods usually takes place prior to shipment in order to address any issues that may surface. This prevents you from receiving defective or non-conforming goods. You can appoint an inspection company to check your goods onsite at the factory, or your import agent can handle this for you.

Your import agent or a customs broker should take care of your transportation and customs clearance. However, you must track the process and be ready to provide any necessary assistance such as additional product information and the endorsement of the bill of landing. You should also issue a power of attorney to your agent and purchase a customs bond for your shipment.

As the importer of record, you, rather than the manufacturer, are legally responsible for ensuring that goods brought into the country meet all national regulatory requirements. Goods that don’t meet requirements can be stopped at the border. So don’t take the manufacturer’s word that requirements are being met. Research compliance issues and ensure that requirements are met prior to shipment.

It’s important to understand all relevant import compliance regulations before placing an order. In addition to U.S. Customs and Border Protection, other government authorities like the USDA, FDA, DOT, and ATF also regulate the importation of different products. Pay particular attention if you import textile products from China. You can research and download any requirements at the above agencies’ websites. Compliance issues can be very complex for certain products. That’s why it’s important to fully research compliance issues before ordering products from foreign manufacturers.

While the importing process of manufacturing goods in China is complex, you can also gain big dividends in short-term and long-term profitability by manufacturing goods abroad. It’s important to research the entire process carefully before placing an order from a foreign manufacturer. To facilitate the process, you can hire local agents familiar with the customs and local economy to act on your behalf.