Risks to Import from China
23 NovTo import from China could have more risks than you think. Most business owners are familiar with the dilemma of risks. Sometimes you just must take risks, while at other times, you can avoid them. Even though importing from China can help your business grow, there are several risks involved. When you shop locally, and a problem arises, you can deal with it right away. Even it turns out to be a complex problem, at least you do not have the language barrier as you have with China. But when to import from China, unless, of course, you know Chinese business practices inside out and have an excellent command of the Chinese language. However, if you can mitigate arising problems, you can build a lucrative business.
The breakdown of communication to import from ChinaAs already mentioned above, communication is one of the main challenges when dealing with your import from China business. Even your business partner might be fluent in English, that does not necessarily mean that the business language is understood correctly as well. As a matter of fact, it happens between English speaking people as well: What you mean is not necessarily what the other person hears.
- The solution to the language barrier is simple. Hire someone whose mother tongue is Chinese and is familiar with Chinese business practices. You can also have a view of it from this post to understand the communication and negotiation with a Chinese supplier.
Sometimes a good relationship is difficultWhile good connections all over the world and in all business-sectors are important, China takes relationships to the next level. Learning the art of Chinese business culture can take years, and you learn it only through direct experience. If you lack the right relationship, your order from China could be at risk. Your supplier might commit only to a part of what was agreed upon, while you might think everything was covered in the contract.
- It is essential to understand that China does business different from America. If you are not sure, do not hesitate and hire someone who has at least 10 – 15 years of Chinese business experience.
What if the goods are not what you orderedNot getting was you have ordered from China might be your most significant stumbling stone. The unfortunate truth is that Chinese manufacturers may not take overly kindly to your complaint. The chances are that if you are a small business, your Chinese business partner will whether fixing nor refunding your shipment. On the other hand, if a manufacturer realizes that he might be losing more than just one shipment or the business with the American partner breaks down entirely; if there is too much at stake for the Chinese company, they might be inclined to fix the problem. As with every other business as well, triple check with who you want to do business to import from China.
You might be overcharged for all fees importing from ChinaWith your Chinese business partner, you might not always be able to check the quality of the products you intend to buy. Unless, of course, you are on a Chinese business trip and see the goods firsthand. Other times it might take you several weeks to find the right business partner who agrees to manufacture the goods to a set price. Maybe you never find the right Chinese partner. The truth is, while you are looking for what you want, you are losing valuable business.
- To avoid this time-consuming process, it is best to trade with a Chinese business, which has already established good business practices with America. While you are importing from China, you still have time to look for a manufacturer of your liking.
The freight costs to import from ChinaIn America, bulky goods are shipped on water rather than air freight. While shipment is much cheaper than air, shipping costs can still be expensive. Particularly if you are paying the Less than Container Load (LCL) rate as opposed to the Full Container Load (FCL) rate.
- The solution to this problem can be as easy as partnering with a local business. If you both can fill a 20-foot container, you can also enjoy the FCL rate and share the shipping costs. A win for everybody involved!
Your product could be copiedThe unfortunate reality when importing from China is that no matter how many trademarks you have for every part of your product, if someone in China wants to copy the product to sell it to a different market, they will. Neither do you have the legal resources, nor can the breach of your IP be enforced.
- The solution would be to trade only with trusted businesses. The larger your business, the better you are protected because no Chinese manufacturer wants to lose your business. If your company does not fall into this category, you might use a broker who has multiple orders with the manufacturer. This could be your best defense in protecting your IP.