Brokering deals from china?

[WilkoWilko]

Hi,

I have built up around £2k in capital from eBay/amazon trading in the last month, and am looking to start brokering deals from china, if that is possible.

Personally, from experiance, I have come to conclusion that it is very difficult to set up a niche ecommerce site and grow it with Adwords and Seo without reasonable capital, at least £5k+ so at the moment that is out of my league.

But I am thinking if I cart set up these niche platform myself, why don't I sell to them? So I have found a particular unbranded pet product from china, which I think it pretty unquie. I have been quoted a CIF price of £4.75 for 200 units. I have then calculated about £300, £1.50 per unit, for freight forwarding. After tax and duty this brings the total cost per unit to around £8.50.

Now in terms of sales. I have sourced the direct emails of the head buyers at firebox, the largest online pet store in the UK, and one of the shopping large shopping channels. I have actually contacted them first saying a work for a distribution company and they have offered me there emails. So it's not the first time they will have heard from me.

I have created PDF brochures for the product, which I am ready to send. Ideally I would like them to pay it cash, so I have offered them a 20% cheaper price for cash hoping they might take it.

Now the one thing that throws a spanner in the works is the 25 day shipping, can I really get away with telling clients it will take 25 days to deliver? On my part it seems like a great shame for the whole idea not to work just because of shipping time.

If they need samples I can order one unit, if it looks like I am going to get a sale.

What i would like to know is, have i oversimplified this? Have any of you brokered from china before? Or any general advic with what I am looking to do?

 

[mconridge]

If it were that easy then why are your customers not already doing it? I'd be asking myself 'What do I offer potential Customers to want them to order through me'.

Looking at your figures, if your landing price is 8.50, what are you planning to pitch the RRP at? That will really dictate whether there is potential in the deal.

 

[GraemeL]

I have been quoted a CIF price of £4.75 for 200 units. I have then calculated about £300, £1.50 per unit, for freight forwarding. After tax and duty this brings the total cost per unit to around £8.50.

Now the one thing that throws a spanner in the works is the 25 day shipping, can I really get away with telling clients it will take 25 days to deliver? On my part it seems like a great shame for the whole idea not to work just because of shipping time.

CIF (Which I would never use) price includes freight - so why £300 for FF?
Get an FOB price and use an FF for freight.

Shipping might take 25 days at sea, but there will always be 1) a few days between the goods being loaded onto the ship in China and the ship leaving and 2) a few days between the ship docking and the goods arriving at your warehouse. You will do well to beat 30 days.

You will pay VAT at 20% (and possibly import duty) on the import.

What if your client only wants 10 a week?

Who will carry out QC in China?

Who will make the final delivery to your client, in the quantities your client wants?

What will stop your client buying direct from China and cutting you out - what value are you adding?

Yes, I think you have oversimplified. Sorry!

G

 

[squeekwheel]

Thanks GraemeL - great reply

 

[Directimport]

Hi WilkoWilko,

Congratulations on the work you have done so far, but you still have a lot to learn about importing. Graeme is correct in pointing out that if you have been quoted CIF that includes freight.

I have 2 suggestions for you:

1. Ask the supplier to quote you door to door by air courier. That will cover Customs clearance and you will receive the goods within a few days.

2. Knowing that cost, tell the supplier you want to provide samples to potential customers so you want to order a small quantity. The size of your order should be no more than will bring the total including freight to £135. That will be below the threshold for payment of duty, so it will be duty free. You will still probably have to pay VAT.

Having that small quantity on hand, you can then gauge the market and even supply a small order.

Pricing is up to you, but 20% discount for COD seems over generous, but if you are buying direct from the manufacturer you should have a big enough profit margin to allow 20%.