New business - tips please! Importing garden furniture from China / India / the east

[newfurniturebiz]

Hi All

I am new here, please be kind

I am looking at starting a new business in importing garden furniture from the east to the UK. Predominantly selling this online, but we also have lots of large industrial space at home so I could either create a showroom there, or (preferably) use that for storage. I have a legally trained background. I have spent a fair bit of time researching this over the past few weeks and, after several painful messages with what I gather to be Ali Baba agents (as opposed to direct sellers), I think I probably need a sourcing agent to help kick us off the ground. We're a start up though, and so don't have heaps to invest initially. We're testing the water, and the max we want to spend on an initial order is not really much more than £5k. Is this an unrealistic amount?

I have contacted a fair few sourcing agents today and awaiting a response, but if anyone has any tips about anything I'm missing or should be looking into then that would be really gratefully received. I'm determined to make this work, I just need a bit of guidance from you whizzes.

Finally as an aside, for those that have already done this, did you begin by setting out as a sole trader, and incorporating a company later on?

Many thanks

 

[Mr D]

You pay to buy the items. Then you pay for shipping, VAT and import duty.
Perhaps worth talking to a customs agent to handle the paperwork and shipping for you. As an island group we tend to have a few customs agents.

Now, once the items arrive you have the fun of selling them.
Packaged for delivery, heavy and presumably large items? Considerable cost to ship, plus some people will want them in far away places like mid Scotland etc where your courier will likely charge you more.

And if a customer isn't happy they can return the item for a full refund including delivery cost.
If it arrives damaged you also get to pay the return cost to you.

 

[Red Wood]

initial order is not really much more than £5k. Is this an unrealistic amount?

In relation to this, no chance. You won't get an empty 20ft container in at that rate with no contacts in place.

 

[newfurniturebiz]

@Red Wood so what do you suggest would be a more realistic figure for a 20ft container? I had been told that 3-5 pieces of furniture would fill that 20ft container, and those 3-4 pieces would come in within budget based on what I've been looking at. Am I missing something?

 

[japancool]

Have you considered drop-shipping instead?

 

[JEREMY HAWKE]

Your UK shipping costs are going to be higher than you think .
We have a customer doing this and we are charging £95 for England and Wales for 4 chairs and a table (guide price)

Make sure your selling quality stuff because there is no profit on the lower end

Agree you need a good agent as things can go wrong . I can recommend a couple if required

 

[Red Wood]

@Red Wood so what do you suggest would be a more realistic figure for a 20ft container? I had been told that 3-5 pieces of furniture would fill that 20ft container, and those 3-4 pieces would come in within budget based on what I've been looking at. Am I missing something?

Price to ship a 20ft container will currently cost you £5K at best with all fees.

That blows your whole budget.

 

[GraemeL]

@Red Wood I had been told that 3-5 pieces of furniture would fill that 20ft container, and those 3-4 pieces would come in within budget based on what I've been looking at. Am I missing something?

The items you are selling must be huge! I have imported office chairs and desking from China for years. Retired now. You will find that only furniture than can be shipped flat packed and assembled in UK is viable. In which case you will get much more than 3 or 4 items in a 20ft box.

The lead time between placing an order on a chinese factory and getting delivery will be 3 or 4 months. So you will need to place your second and third orders before your first order has landed in UK. Unless you are predicting volumes of less than one container (thats 3 to 4 items by your comments) in a month.

I think your cashflow analysis needs a lot of work

Also, you are competing against some huge wholesalers who have been shipping from China for years.

 

[Darren_Ssc]

Garden furniture is incredibly popular from early March to June. Do you have any plans for the other 8 months of the year?

You'll also find that some items sell out fast and you won't be able to get anymore in time, so you need a bit of experience as to what sells and what doesn't. That experience will come at great cost.

 

[japancool]

I was going to say - if you're starting a business with only 3-4 items to sell, you've got to be pretty damn confident you're going sell those specific items and not have them sitting waiting for a buyer for ages. Are you sure it's viable?

 

[GraemeL]

@newfurniturebiz I have your PM. My advice to you is that on this forum its al least reagrded as polite to ask permission before sending a PM. Also, all forum members can sometimes benefit from the questions and answers when they are given in the open forum.

If you really really want to have a successful business and you are confident your plans will work, then you can invest money. If you have a vague idea, then you will have doubts and it is unlikley you will invest sufficient to make it anything except a hobby.

I personally visited every factory in China I was considering buying from, with my chinese agent. I have never ordered any volume of product without having visited the factory. Personal relationships are very important in chinese business culture. A relationship can have a dramatic effect on reducing MOQ.

Having visited the factories I ordered and paid for samples that I felt would sell and these were shipped LCL. Samples look different in China to the UK.

The samples were all test assembled in the UK personally by me. Only if I liked the product, if it could be shown effectively by an image and I felt a contrary customer could assemble it, was it 'passed'. I used the samples for photography and had professional images taken. After that the samples were only suitable for use a spare parts.

Placed order on factory for 40ft container. About 25,000USD. While waiting for delivery got on with creating website, descriptions, measurements etc.

After about 8 weeks, place another order for 40ft container.

After about 12 weeks - roughly when first container was about to arrive, place another order.

Then it was a matter of selling and monitoring stock carefully so next order could be placed.

It worked. Negative cash for about 14 months.

 

[Guy Incognito]

We ship oversize items - quite a lot of them. It’s difficult. You need to factor this in to your pricing. Things get damaged, lost etc but if you are dispatching to NI or Scottish Highlands then you can expect this to cost £150+ (assuming it’s palletised).

We started our business with £5k, but I am guessing our unit price is less than yours, and we sent the first couple of orders LCL from China.

It is a competitive space, I know some major garden centres sell upwards of £50k per week of furniture in store in Q2.

A showroom is a good idea, you will need to do some advertising to make people aware of what you do.

Are they generic products from a catalogue or something you have designed yourself? How will you stand out from the crowd if the former?

As a broad rule of thumb you want to be charging 4x your landed cost as the price to consumer, though if the sums involved per item are quite large then you can be more flexible in this.

 

[MBE2017]

FWIW, with a £5k budget to try out the idea, buy in the UK. There will be massive amounts of overstock due to covid being offered, chances are it will be much cheaper than importing direct atm.

I sold a large number of big garden tables four years ago, normally retailed at £140, bought 200 at £10 each. Sold the lot in three weeks through eBay at £80 each. There are always overstocks around.

 

[SillyBill]

I knew a guy that did this for a living (importing garden furniture from China, FCL), he packed it up 2 years ago and got a job which he has recently retired from. He had no regrets incidentally as he originally made some money out of it but by the end he was earning NMW with quite a lot of capital at risk, offered a job on a decent rate and jumped at it. Not sure why it became tougher for him but it seemingly had and he was very experienced in buying and selling from China in that market. Sounds very competitive unless ofc you think you have a formula for success others are missing.

 

[Larry Fong]

You can hire a third party inspection company to factory evaluation if you identify the situation prospects you would go ahead with. Though the service may cost you some money but it will save a lot on the long-run.

 

[Paul FilmMaker]

GraemeL clearly knows what he's talking about and I'd just emphasise personal relationships are king. I wouldn't do anything without having first established a personal relationship.

In Chinese culture, this is called guanxi - https://en.wikipedia.org/wiki/Guanxi

If money is tight, fly Southern China which will save thousands if you travel regularly. My Southern China flights are usually half the price of the best price every, other airline offers. They generally don't speak English on the internal transfers so worth buying a cheap translator at the airports. Southern China always has stopovers but if you get a hotel and do a bit of tourism, the price is still worth it because a 5 star hotel is only £50.

 

[Red Wood]

*China Southern crew do speak English

 

[japancool]

I've flown China Southern. There's a reason they're cheap.

 

[GraemeL]

*China Southern crew do speak English

Zhēn de.

A little mandarin also goes a very long way.

 

[GraemeL]

I've flown China Southern. There's a reason they're cheap.

What is the reason? (I have flown extensively with them)

 

[japancool]

What is the reason? (I have flown extensively with them)

It's pretty dire even compared to China Eastern (which is saying something).

 

[Guy Incognito]

I knew a guy that did this for a living (importing garden furniture from China, FCL), he packed it up 2 years ago and got a job which he has recently retired from. He had no regrets incidentally as he originally made some money out of it but by the end he was earning NMW with quite a lot of capital at risk, offered a job on a decent rate and jumped at it. Not sure why it became tougher for him but it seemingly had and he was very experienced in buying and selling from China in that market. Sounds very competitive unless ofc you think you have a formula for success others are missing.

Alibaba has made it basically easier to source generic products. This means more competition, downward pressure on prices and a race to the bottom.

Garden furniture is a crowded market place with lots of people selling generic products. It’s also very expensive to deliver.

The key question is how will you differentiate? Is it by designing something yourself or by building a brand?

 

[Red Wood]

Honestly speaking, although a different type of service all my flights even internally in China have been OK. I've also flown with many of the countries smaller internal airlines. (I'm a bit of an aviation fan so used to make sure I tried different ones)

I was most impressed with Hangzhou Airlines. A320's with really comfy economy seats.

I wouldn't waste my money on biz class long haul with the main Chinese carriers though unless the price was heavily reduced.

 

[Guy Incognito]

Flying to China at the moment isn’t possible is it? I need to get over there but my understanding was there’s a 2 week mandatory quarantine in a state hotel...

 

[Red Wood]

Flying to China at the moment isn’t possible is it? I need to get over there but my understanding was there’s a 2 week mandatory quarantine in a state hotel...

I think you'd struggle but if it's absolutely necessary best option is via the HK border crossing. Make sure you have on your person invitation documentation from your factory stating an urgent visit is required.