Importing from China - Part 1

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"If You Aren't Already Looking At China, Start Now"

You can't afford to ignore China these days. Maybe you grew up thinking it is a distant, closed-off land, but this is no longer the case.

In the past few years Western national newspapers have started carrying a lot more news about China-- some have even got special daily "China Business” sections-- and it's not just hype.
China is the world's fourth largest country with one fifth of the world's population. 
The GDP of China is now over 10 times larger than what it was in 1980, when the previously closed country began opening its doors to international commerce. 
Chinese people and culture are spreading more than ever, and in turn Chinese people are eagerly looking abroad to Korea, Japan, Australia, Europe, and the USA - absorbing and learning from foreign culture and business know-how.

China is now known as "the factory of the world” and the chances are that, at this moment, you are reading this text on a computer with at least some of the components made in China, wearing clothes made in China, sitting on furniture made in China... and planning on making a profit from buying and re-selling even more goods made in China!
China has already taken a leading position in the economy of the world, and you need to be ready to take advantage of the opportunities this presents.

Recent economic developments such as new Chinese stock markets, ever-increasing investment in the domestic market by western multinationals, and aggressive entrepreneurial expansion by Chinese exporters, mean that China's economy is still evolving and actually growing faster than ever.
But the big difference for you and other business-people around the world is really going to be the improvement in communications that mean you have no excuse for not doing business with the Chinese!

"Start Communicating With China!"

Two big changes that will make communication with China easier:

1. The internet.

China has rapidly implemented broadband internet access for all cities and towns, thanks to good cable networks and fast implementation of ADSL by Chinese telecoms. The power of the internet is breaking down barriers to communication. International phone calls are cheap or free, email is fast and efficient, and websites provide an unparalleled marketing platform. Small businesses or even individuals are empowered to compete in an international market, and the possibilities for business connections are seemingly endless.

Chinese people have perhaps only just begun to wake up to the possibilities of the internet marketplace, but it’s certainly true that thanks to the www, China has never been more accessible.

2. Culture changes.

Inevitably Chinese culture is becoming more outgoing and international thanks to influences of TV, movies, music, fashion, and the internet. But of course the real driving force is money, and if Chinese people are good at anything, it is spotting profit opportunities. Chinese businesses and individuals are less and less restricted by national regulations, meaning more travel, more trade, and more expansion into foreign markets.

In fact, like it or not, Chinese businesses are already coming out of China and approaching you!

China itself is full of business opportunities for foreign firms and investors, but entering the Chinese market can be a thorny business. In this mini-course the opportunity I am talking about is not inside the China domestic market -- the opportunity starts at home, with you, on your computer.

I want you to begin to be able to profit from China, without leaving home. (Of course if you want to come to China that can be a great idea and I’ll talk about that later.)
Travelling to China isn’t difficult these days, and to make contacts in China you can start just with the telephone and your email. Speaking to Chinese businesses isn’t like a conversation over the Iron Curtain!
The first rule of making a profit on anything is
“buy low, sell high”.
I can’t say it so elegantly, but what I hope you're going to take away from this mini-course is:
• Buy Chinese
• Sell At Prices Lower Than Your Competitiors
• Take Your Nice Profit Margin.
• Rinse and Repeat !

"Is The China Direction Right For Me?"

Why import from China?
• Chinese factories make all imaginable types of products, usually much cheaper than anywhere else. The world's large companies are still moving more and more of their manufacturing to China... it's about the bottom line.

The low manufacturing costs mostly come from low human resources costs. Basically, the job market in China is highly competitive while living costs and expectations are relatively low: this means factories can employ hard-working people very cheaply. Most factories don't need to pay social security or insurance for their workers, and providing for their living costs isn't too expensive.

Absence of bureaucratic red tape, a lower corporate tax burden, quite cheap energy costs, favourable interest rates, abundant cheap real estate, and low construction costs, are all other factors that lower the running costs for a Chinese factory.

The low production costs leave a lot of room for middlemen in China, Hong Kong, or Taiwan trading the goods even before they reach export markets. The closer you can get to buying from the source -- the manufacturer / factory in China -- the lower the price you will get.

This used to be difficult but now thanks to the internet and more a more open attitude in China, it is possible in many cases for a normal foreign buyer to go to directly the source.
• Chinese suppliers are heavily geared towards exporting to western markets and are actively marketing their products to buyers like you. Expect Chinese efforts in international marketing to become much more vigorous and visible in the next couple of years.
• Since the suppliers in China are sending goods to your country, why not get them to send directly to your customers? Have you thought about the possibility of drop-shipping goods directly to international markets which are much less competitive than your market at home? If you already have a reliable supplier and have established a good relationship, you could profit from finding buyers for their products in markets abroad... bought through you of course.
• Chinese suppliers are not too picky (or loyal!) about who they supply to, and even beginners with no registered company will be able to buy from China. Also, Chinese people have few cultural or religious prejudices - in other words, they are totally open- minded about which nationalities they are doing business with... as long as there is a good relationship sustained... and a reliable flow of cash!!

A key reason I hear from people why they haven't started buying from China is
"I don't speak Chinese, I've never been there, and I don't know anything about China".
Let's make this clear now: there's no need to worry.

Chinese companies geared for export are going to have English speaking staff, possibly also other languages, and they're ready to help you build a relationship. Even if you're not an experienced jet-setting business-person, people in China are definitely not going to scorn you for being a beginner to this country.
As far as we Chinese are concerned, of course "foreigners" don't know much about China. ;) In fact if you visit we will never stop trying to teach you about our 5000 years of history and culture!

So the people in China you need to talk to are going to be ready to help you start. Don't be nervous. You just need to jump in there and start grabbing the opportunities!
Are you still unsure whether a
"China direction" is right for you? 
How about thinking of it from this point of view:
• Wholesalers in your own country are probably already buying from China, so why not go direct to the source yourself?
• If you are selling on EBay or other online auctions / ecommerce stores, it's a certainty that your "power seller" competitors are already buying some or all of their goods from China. Do your sales a favour and get the same or better low priced sources.
• The wholesale market in your country is probably very saturated with other people like you buying and reselling those same products. Compare that to China, where you could be the only person in your state or even country importing a particular product or from a certain Chinese manufacturer.
• Importing from China will give you the opportunity to develop your business by finding new products at better prices in the future, especially as your relationships with Chinese suppliers improve. Can you say the same for your suppliers back home?

"The Wrong Approach... "

Importing from any country used to be much more difficult than it is now. Buying directly from China was pretty much impossible for normal business people (let alone consumers) up to about five years ago.

Now there are more and more people profiting from Chinese sources in every sort of business, and they're not all huge bulk buyers like Wal-Mart. In fact, the great opportunities for you importing from China exist in covering the product areas that are NOT already owned by larger players.

I'm going to talk more later in this mini-course about how to import products that will sell, and not fall at the first hurdle!
Here is just one hint about a better way to approach the China import opportunity:
• Every day there are thousands of auctions listed on EBay for "MP3 Player"-- it's a hot category-- but my count today of the first 300 auctions showed only about 30 different models being sold.
• Wal-Mart in the USA sells 130 different MP3 Players.
• Dixons (the largest electronics chain store in the UK) sells 50 different MP3 Players.
• Searching on www for Chinese MP3 Players will give you a choice from over 4000 MP3 Player products. 
• A large proportion of these products are totally new designs and unavailable (so far) in Western markets.
Can you see what I'm getting at here...?
There is no single, secret key to success in China importing, but there are certainly things to avoid. I will warn you about some common pitfalls later.

I'm also going to talk in later parts of this mini-course about product research and how to deal with suppliers successfully, but for now I hope you can hold on to the idea that importing from China doesn't mean simply copying the people who are already bringing you your made-in-china clothes, computers, and furniture. It means using the China source in a smart way.

"Can You Ignore The China Opportunity?"

Here's what I'd like you to take away and think about today:
• Importing from China is a MUST if you want to stay competitive in your current line of business, or develop your new money-making business. Even if you think your products are too specialist, or you already have good import sources elsewhere, you can't afford not to research the possibilities in China.
• Importing from China is NOT as difficult as you believe. China is a very open, modern country, and businesses there are waiting to talk business with you.
• HOWEVER importing (from anywhere) is a complex and often risky business if you don't know what you're doing. You need to spend a lot of time researching at home, so you know your own market-- before you even begin talking to people in China.
• AND China is very different in culture, language, mindset, business, history, and economy to what you know in your home country. So there is a lot to learn if you want long-term success.
• Research and learning about China will help you succeed. Even more useful is time spent researching specific companies and getting to know real people.
• Keep an open mind about different products-- maybe even product areas you don't know much about yet. There are a lot of untapped opportunities here in China.
Note from Rob
Thank you very much for reading this first part of the Rebel Imports Import from China Mini-Course. I hope you've got some useful ideas today - and some motivation to get moving in your China business direction!
Please leave feedback for me and ask questions

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