What is a Sourcing Agent?

A product sourcing agent can serve as a retailer’s representative. They play a crucial role in the product procurement process and vetting of Chinese manufacturers and suppliers. Credible sourcing agents have the expertise and a Rolodex of supplier contacts to help retailers get the best inventory deals. These liaisons can be fluent in both English and the local language. 

How Much Does a Sourcing Agent Cost? Common China Sourcing Agent Fees

Several variables come into play when considering professional sourcing liaisons. Cost is one of them, and prices can vary depending on the products sourced, the location of the manufacturers, and the retailer’s timeframe. 

Nevertheless, there are pricing structures or China sourcing agent fees you need to know about:

• One-time Finder’s Fee

There are sourcing agents that are only involved in the early stages of vetting manufacturers. These professionals identify potential suppliers, verify their credentials, and communicate the retailer’s requirements to the prospects. When the candidates get shortlisted to just one, the role of these sourcing agents ends. Afterward, communicating with suppliers is given to the retailer. Retailers must pay the finder’s fee after a contract gets signed between the buyer and the supplier.

• Manufacturing Management Fee

Partnering with a sourcing agent that offers services beyond funding a supplier is ideal for new eCommerce players. This type of sourcing liaison takes care of vetting suppliers and managing inventory as they get manufactured. This process includes negotiating the prices, prototyping products, and arranging quality control. In general, there are two standard fee-charging models for sourcing agents that are involved in inventory management: 

• Flat-Rate Fee

As the name suggests, a flat rate fee involves a fixed rate that individual agents or sourcing firms charge a retailer. The costs can be calculated either per product or based on the duration of the project. Some sourcing agents charge per month; others prefer a per-hour rate. This payment scheme is often the most cost-efficient option for retailers. It is also the most popular for Chinese sourcing agents. 

• Commission

Sourcing agents might also charge a commission on the total value of the purchased inventory. This amount may be anywhere from 5% to 10% of the total costs. However, commission rates can vary based on the product sourced and the order size. 

How to Find Right Product Sourcing Agent in China

An experienced and qualified sourcing agent can ensure the success of a business. Professionals are worth their weight in gold. That said, vetting sourcing agents requires patience and diligence. Not all sourcing agents have the experience, contacts, and finesse crucial in landing the best deals. A great partnership begins with knowing what to look for in an FBA sourcing agent in China. We’ve listed a few recommendations below to ensure that their investment in a sourcing agent would pay off: 

• Consider the Product

It is in the best interest of retailers to conduct independent product research before vetting sourcing agents. Due diligence will allow eCommerce companies to approximate product pricing, minimum order requirements, and specific manufacturing hubs catering to their niche. This information is invaluable, especially when it comes to detailing a retailer’s needs. 

• Vet According to Location

Certain areas in China specialize in manufacturing specific products. Being aware of these manufacturing hubs should be part of a retailer’s independent research. With the info in tow, selecting sourcing agents near supplier locations is an excellent way to procure quality inventory while saving costs on transportation. 

• Check for Language Proficiency

The language barrier is one of the biggest struggles that retailers face when sourcing from China. This issue might not seem like a big concern, but the cost of miscommunication can be expensive when it comes to inventory procurement. Work only with sourcing agents fluent in English and the local language. 

• Interview and References

Resumes only offer a glimpse of a sourcing agent’s expertise. It’s best to vet sourcing liaisons based on their contacts, work ethic, and the reviews of their former clients. Interviews allow retailers to gauge the capabilities of a candidate truly. Likewise, speaking to past clients provides a third-party view of an agent’s performance.

• Secure Terms in Writing

Getting every detail in black and white is the last step in hiring the right sourcing agent. A contract protects the interest of both the retailer and the liaison. This document must include the responsibilities of both parties and the scope involved in the transaction. 

When it comes to partnering with sourcing agents, going for the candidate that offers their services for the lowest prices isn’t always the best strategy. It is crucial to vet and deliberate on each candidate thoroughly. After all, they serve as a retailer’s representative abroad. They must be able to communicate a business’ demands and expectations with ease. 

We at ZhenHub understand the difficulty of sourcing products abroad. More than partnering with a liaison, we can make your product procurement process more accessible through our tech-based logistics solutions. Our products are a great complement to the right sourcing agent. Contact us today or request a free quote to experience the ZhenHub difference. 

Fulfillment by Amazon, or FBA, is a service that allows retailers to sell on Amazon without the hassle of logistics. Following product procurement through an FBA sourcing agent, the marketplace stores third-party seller products in their fulfillment centers. After a sale, Amazon picks, packs, and ships packages directly to consumers.

To get the full benefit of the FBA program and bolster profit margins, most Amazon third-party sellers source products from reliable Chinese manufacturers. But note that the operative term is “reliable.” China doesn’t exactly have a sterling reputation when it comes to quality products and sourcing. Therefore, it is crucial to find the right FBA sourcing agent to take full advantage of Chinese manufacturers’ inexpensive products. 

A reputable  FBA sourcing agent can be the difference between success and failure on Amazon. This article explores the importance of sourcing agents in product procurement and actionable tips on securing a contract with a reputable agent. 

What is a Product Sourcing Agent?

A product sourcing agent plays a pivotal role in the product procurement process. Sourcing agents are third-party professionals that act as a liaison between manufacturers and retailers. They are crucial for eCommerce operations looking to source products from overseas suppliers, particularly from China. Hiring sourcing agents provides retailers with a means to access their slew of supplier contacts. Moreover, these professionals are usually locals that are fluent in both English and the local language. 

How to Find Right FBA Product Sourcing Agent in China 

Much like finding reliable suppliers, it is imperative to hire only reputable sourcing agents for overseas product procurement. Unfortunately, not all sourcing specialists are created equal. The suitable sourcing agents should have the credentials and experience to do the job effectively. 

• Conduct Independent Product Research

The first step in hiring the right product sourcing agent is conducting independent product research. Through Chinese marketplaces like Alibaba, retailers can get decent approximations on product pricing, minimum order requirements, and manufacturing hubs catering to specific products. The information gathered from the research is crucial for communicating particular needs to potential sourcing agents. 

• Consider Agents Based Near a Manufacturing Hub

Most retailers want to have quality inventory and save as much during product procurement. One way to ensure that the costs remain low is by choosing agents located near manufacturing hubs. In addition, selecting local representatives can save a retailer on transportation costs. 

• Check for Language Proficiency

One of the biggest hurdles retailers face when transacting with overseas suppliers is the language barrier. Often, the struggle can lead to miscommunication, wasted raw materials, and missed deadlines. Ensuring that the FBA sourcing agent is conversant in both English and the local language is vital to minimizing procurement errors and delays. 

• Conduct Interviews

It can be challenging to gauge the capabilities of a candidate through their resume alone. However, an interview can let you assess an agent’s experience and sourcing knowledge and give a glimpse into their work ethic. 

• Ask for References

Talking to an agent’s past clients is another good step in assessing their product sourcing skills. They provide a retailer a third-party view of an agent’s track record – without any bias. 

• Secure Documentation for Every Step of the Transaction

The last and probably one of the most essential steps in hiring a sourcing agent involves signing a contract. Again, documentation is key to protecting the interests of both parties. The contract should include the scope of the transactions and the responsibilities of both the retailer and the China sourcing agent. 

Essential Questions to Ask Potential FBA Sourcing Agent 

When it comes to selling on Amazon, two factors put retailers above the rest – pricing and product quality. The right FBA sourcing agent can find the balance between those two factors, but that is no easy feat. It takes experience and expertise to connect retailers with suitable suppliers. 

When vetting FBA sourcing agents, here are a few questions to ask during the interview: 

• Do they work solo or with a sourcing company?

Retailers must know if they are working with an individual or working with a sourcing company. There are pros and cons to both conditions. Truth be told, it is riskier to get a freelance sourcing agent. They can take longer time sourcing products, and they might affect your deadlines. That said, sourcing companies charge a higher fee because you’re getting broader expertise. 

• How many years of experience do they have under their belt?

When it comes to product procurement, experience is invaluable. With tenure comes contacts. The more supplier relationships a sourcing agent built over the years, the better a retailer connects with the proper manufacturer. 

• Do they have a strong relationship with the manufacturing company?

Again, the relationship between a sourcing agent and the supplier is key to securing the best inventory deals. They can better communicate a retailer’s needs and ensure lower pricing if they already have good working relations with a manufacturer. 

• What is their product specialty?

It is challenging for a sourcing agent to specialize in all types of products. In fact, in China, sourcing certifications are divided into different product niches. Agents are only allowed to operate based on the certificates that they have. In vetting professionals, it is best to find agents experienced with sourcing the specific product. 

• What is the scope of their sourcing services?

There are various services involved in product procurement. For example, some agents only tackle product sourcing, while others offer inspection, testing, and quality control. Therefore, it is important for retailers to know the scope of service to understand what exactly they want to get. 

The benefits of working with an FBA sourcing agent are undeniable. These professionals allow retailers to source quality products at a reasonable price within a given timeframe. Hiring the right FBA sourcing agent is key to maximizing the advantages Amazon and Chinese manufacturers have to offer. 

Curious where you can start the search? ZhenHub is eager to help! Request a quote now or partner with us today to learn more about overseas product procurement through our tech-based logistics solutions. 

Dealing with Chinese suppliers requires skill and experience. It’s pretty well known that you can get scammed and get low-quality products in China. But these are inherent risks that come with transacting with international manufacturers that go beyond the language barrier. 

7 Common Mistakes to Avoid When Product Sourcing from China

Mistakes are common, but they are ultimately avoidable. Understanding the risks hinges on understanding common and uncommon pitfalls and learning from them. Below are a few of the most common product sourcing mistakes to avoid when dealing with Chinese imports and exports: 

• Failing to Develop a Strong Sourcing Strategy

A strong sourcing strategy is invaluable when product sourcing from China. After all, transacting with suppliers and handing off large sums of money to liaisons overseas can get risky. Therefore, it is crucial to create clearly defined goals and requirements for every transaction. 

A sourcing strategy serves as a road map in identifying the best product supplier. It should include specifics about the products as well as expectations on turnaround times and quality control. 

• Lacking Defined Specifications

One of the biggest hurdles when sourcing products is the language and cultural barrier when communicating with suppliers. 

Retailers make two mistakes regarding product specifications: failing to define their product expectations and bombarding manufacturers with too many details about an item. The key is finding credible, expert suppliers and providing necessary information.  

• Forgoing Supplier Audit

Most of an eCommerce company’s capital goes into product sourcing and inventory. Therefore, it is only fitting to conduct a full audit on the supplier that is getting vetted. A face-to-face meeting at the factory is the best way to gauge a manufacturer’s competency. It gives the retailer the complete picture of a supplier’s process – from the quality of the raw materials to the treatment of the employees. 

• Not Ordering Product Samples

Relying on the supplier’s good word on a bulk order is not a good idea. You need to have everything in print but sending specifications isn’t enough to steer the manufacturing team towards a retailer’s vision. You must get manufacturers to send samples for revisions. It also serves as a form of practice for the manufacturer to familiarize themselves with your requirements. 

• Focusing Only on Pricing

While it is true that you can get huge profit margins with Chinese manufacturers, price should not be the only factor taken into consideration. Focusing on the pricing and low-balling suppliers isn’t ideal if a retailer intends to maintain a good relationship with its manufacturing partners. Likewise, this emphasis on costs can take away the focus on creating products. At the end of the day, if the price is too good to be true, perhaps it is. 

• Failing to Sign a Written Contract

Significant transactions warrant a written contract. Having everything in black and white protects a retailer from any lapses that a supplier might make during the product creation. Likewise, it protects the supplier from any demands that a retailer might have beyond what was stipulated in the agreement. It is essential for bulk and wholesale orders. 

• Not hiring a China Sourcing Agent 

It takes a level of experience and skill to transact with Chinese suppliers successfully. It can be challenging, especially for those new to the industry, to secure a favorable agreement. A sourcing agent is a professional that can liaise with a retailer. They have a slew of supplier contacts that their clients may tap into to score the best deals. Forgoing a product sourcing agent can make the process of product sourcing riskier and more stressful. 

How To Minimize the Risks When Product Sourcing from China

Learning the risks of product sourcing from China is only one part of the battle. To truly maximize what the Chinese import and export industry offers, developing strategies to minimize risks is crucial.

Before starting the transaction, it is best practice for retailers to itemize their product requirements. This list should be as detailed as possible. It should include the features of the product, the raw material to be used, the dimensions, the budget, and the timeframe.

Moreover, for those new to eCommerce, choosing to work with a sourcing agent can ease a retailer into the world of inventory importing. These professionals are quite the investment, but they are worth their weight in contacts and possible discounts.  

Lastly, it is vital to secure a written agreement for every step of the transaction. Doing this will remove, or at the very least, reduce the odds of getting cheated. A contract protects both the seller and the buyer. By no means should a retailer forgo a written agreement at any point of the purchase. 

Product sourcing from China is not without its risks and drawbacks. In China or other regions, sourcing inventory internationally is an important business decision and must be appropriately evaluated. However, this option remains to be the most profitable, given ample research and doing due diligence. 

For those new to eCommerce, international importing and shipping can get overwhelming. There are plenty of things that can go wrong, and these mistakes can be costly to your overall operation. Aside from your local sourcing partner, it pays to align yourself with a logistics company that knows how the industry works. ZhenHub’s full line of tech-based products can be the logistics solution to your needs. Email us at hello@zhenhub.com today to learn more about our services or get a quote directly from our website. 

Aside from the language barrier, a simple Google search isn’t enough to guarantee that you’ll get good quality products. To ensure the quality of the items, most eCommerce retailers opt for the help of a China sourcing agent. 

Sourcing agents is crucial to finding the right items at a competitive price from reliable suppliers. They play a pivotal role in the international supply chain. But the upstart cost of hiring a China sourcing agent isn’t cheap. However, the benefits of getting this specialized help outweigh the hefty fees. 

This article explores hiring a China sourcing agent – the benefits, the drawbacks, and the specific factors to watch during the hiring process. 

Four Sourcing Options for eCommerce Retailers

In general, retailers looking to import goods from China can choose from four procurement options. Each of these options has advantages and disadvantages. When it comes to sourcing goods, there is no one-size-fits-all. 

• Direct Purchase

Eighty percent (80%) of importers purchase their products from suppliers and manufacturers directly. It is the most cost-effective solution; however, this method isn’t without its requirements and challenges. Retailers that can purchase directly from suppliers already have years of experience dealing with them. They are in contact with a few reliable suppliers, so they know from whom to buy. 

• Opting for a Commissioned Sourcing Agent

A reputable China sourcing agent can help retailers connect with suitable suppliers and manufacturers for their specific needs. These local liaisons endeavor in the search and negotiations for the retailer. They profit off of the transaction on a commission basis. 

• Working with a Trading Company

A trading company is an excellent option for companies that intend to purchase products from Chinese suppliers but fail to meet the minimum order quantity.

• Choosing a Service Company 

Similar to working with sourcing agents, choosing to partner with a service company allows eCommerce businesses to use the connections of the service company to get in touch with supplier contacts. Instead of working on a commission basis, you pay them a flat rate. 

Companies That Benefit from Hiring a China Sourcing Agent

All types of eCommerce businesses can find value in outsourcing their procurement needs. However, some operations benefit significantly from working with a China sourcing agent: 

• New eCommerce Companies

Importing goods from China can almost guarantee competitive pricing. However, it can be difficult for new players to actively participate in the game without the help of a China sourcing agent. Dealing with Chinese import companies can get overwhelming. Sourcing agents ensure that nothing gets lost in translation. 

• Companies Experiencing Rapid Growth

Contrary to popular belief, rapid scaling and growth can be detrimental to a retailer. It’s especially if a company can’t fulfill the demand. Too many orders can wreak havoc on an operation’s reputation. Sourcing agents can take the burden off of sourcing products from a business owner. Once freed up from this time-consuming process, company execs can focus on managing the enterprise’s growth. 

• Retailers Offering Multiple Products 

To ensure that they are getting the best deals, retailers must contact at least ten potential suppliers for each item. If an online store intends to sell ten products, that equates to conversations with 100 different suppliers. 

Benefits of Working with a China Sourcing Agent

Plenty of start-ups and budding eCommerce companies are wary of working with local sourcing agents. There are horror stories of fraudulent agents, theft, and loss. Interestingly enough, these incidents are isolated. It shouldn’t deter retailers from transacting with sourcing agents since the benefits of their expertise are plenty: 

• Competitive Pricing

There is a reason China holds the top spot as far as importing and exporting goods is concerned. Since most manufacturing companies are in the country, suppliers from China can provide retailers with rock-bottom prices. A sourcing agent can find the best manufacturers to fulfill retailer needs. 

• Customization

Very few retailers have experience dealing with Chinese manufacturers. There are many stories of retailers getting frustrated and disappointed with product customizations. The distance and language barrier doesn’t help. Sourcing agents can solve these problems. They are not only fluent in Chinese, but they are also well-versed in transacting with local suppliers. This know-how allows a retailer to get precisely what they want with minimal risks. 

• Quality Control

One of the best advantages of outsourcing procurement is having an on-the-ground person providing quality checks. Most sourcing agents act as local representatives for the retailer. They can communicate concerns and issues with the quality directly to the supplier. 

How to Find the Right China Sourcing Agent

Interestingly, not all sourcing agents are created equal. To truly experience their full range of benefits, finding reputable liaisons to get the job done is essential. The cheap price tag of imported Chinese goods comes with plenty of risks. 

It is best to align with an experienced sourcing agent to ensure that the products match the retailer’s expectations. But you may need to verify the credentials of a sourcing agent before signing a contract. Check the legitimacy of their location, years in operation, and proficiency in Chinese and English. If possible, ask for references and an interview with the sourcing agent in question. 

Retailers have the freedom to do product procurement themselves. However, choosing this option, especially for newer operations, can put an eCommerce store at a disadvantage. Ultimately, a sourcing agent can give your company the best prices on goods from reliable suppliers. They take the guesswork out of a risky business move. 

Are you interested to learn more about the international supply chain? Contact us at ZhenHub today or request a quote to give your company the edge in the competitive world of eCommerce. 

In 2020, China imported more than $2 trillion worth of goods. At present, the United States is the country’s third-largest import trading partner – next to South Korea and Japan. To start importing products into the country, retailers need to apply for an import license in China. Without it, imported products can get held at customs. 

In this article, we discuss all the relevant details necessary for securing an import license in China. 

What is an Import License?

Before we get into details on how you can get an import license in China, it is important to understand what it actually is. After all, simple mistakes when product sourcing from China can result in significant losses for retailers. Here’s a simple and straightforward explanation of what an import license is:

An import license or a non-automatic import license, are rights to do import business. The Chinese government requires it to import goods. It’s a measure to control the influx of imported products. The documents are non-tariff barriers that ensure the implementation of import quotas. These quotas are set in place to protect local traders and manufacturers.

There are two types of import license in China that an exporter needs before importing goods: automatic and non-automatic import licenses. China’s Ministry of Commerce or MOFCOM handles the distribution of both types of import licenses in the country. 

Import License in China: Automatic Licenses versus Non-automatic Licenses

Automatic and non-automatic import licenses are the two essential import documents that an exporter needs to transact with Chinese importers. The difference between the two types involves import quotas and the specific imported goods in question. 

You’ll need an automatic license for the importation of “permitted goods.” This license type’s primary purpose is for documentation and statistical reference. That said, there are certain “permitted goods” that MOFCOM monitors, and these require additional licensing. On the other hand, non-automatic licenses are integral to maintaining import quotas.

Once an exporter receives their automatic import license, they are free to apply for other rights. Each document is suitable for six batches of imports. 

Products that Require an Import License in China

Imported products fall under four categories. The categories differ based on how receptive the country is to receive the specific goods in question: 

Permitted Goods (no monitoring)

Permitted goods that require no monitoring are the most accessible products to ship into China. Exporters that offer these items are only required to secure an automatic import license. Documents disbursed for permitted goods are only valid for six months for six batches of goods. Exporters may apply for a new license once the six months are up. Below are a few products that belong to this category:

• Meat products, specifically beef and pork.
• Clothing and other textile items

Permitted Goods that are monitored

There are permitted goods that require additional licensing. While they are no quotas in place, MOFCOM monitors the importation of the following products:

• Wines;
• Poultry products;
• Vegetable oils; and
• Electrical and mechanical goods

Restricted Goods

Restricted goods are subject to import quotas. As such, exporters who want to ship products under this category need a non-automatic import license. Failing to do so can result in the shipment being held at customs and sent back to its place of origin. Items within this category include but aren’t limited to:

• Used Electronic products
• Substances that carry environmental concerns 
• Food, fibers, and animal feed products that have some health risk

Prohibited Goods

Prohibited goods are items that exporters cannot import into China. These products are banned license or not:

• Weapons and ammunition
• Forged currency
• Printed materials, or various forms of media including films, photos, movies, audiotapes, videotapes, CDs, DVDs, computer storage devices, and other things that could harm China’s politics, economy, culture, and morality
• Poison and addictive drugs
• Food, drugs, or other substances that cause bodily harm and are infectious or from epidemic areas
• Specific animal products
  • All living animals (excluding dogs and cats) and their sperm, zygotes, embryos, and other genetic things
  • Silkworm chrysalis, silkworm eggs, animal blood, and its products, 
  • Products of aquatic animals
  • Eggs and their products that are not heat-treated
  • Fur, mane, bones, horns, oil and fat, flesh, and the corresponding products
  • Edible bird’s nests (excluding canned bird’s nests)
  • Transgenic biomaterials
• Plants and plant products:
  • Fresh fruit and vegetables
  • Tobacco leaves (excluding cut tobacco)
  • Seeds, sprouts, nursery stock, and other fertilizable plants
  • Organic cultivation medium
  • Soil
• Other prohibited goods:
  • Animal bodies, samples or specimens, and offal from animals
  • Transgenic biomaterial
  • Pathogens of animals and plants, dangerous insects and organisms
  • Human blood and corresponding products

Applying for an Import License in China

It is relatively easy to apply for an import license, but it requires close coordination between the Chinese importer and the exporter. Interested parties need to download and accomplish a form from the MOFCOM website. Once it’s filled up and you submit all required documents, the license should be ready in two weeks. It is free of charge.

Information Required for Acquiring an Import License 

MOFCOM requires the necessary information listed below from the importers and exporters involved in the transaction to complete the application process.

• Name/company number of importer
• Import license number/expiry date
• Importer’s consignee in China
• Country or region of exportation
• Country or region of the product’s origin
• Terms of trade and foreign exchange
• Place of clearances
• Uses, description, and product code of the goods
• Product’s specification, unit, quantity, and price
• Other supplementary details, and
• Issuing authority stamp carrying the text ‘automatic import license’ in Chinese along with the city of issuance.

Importing products into China almost always requires an import license. It’s prudent for retailers to apply for this document even before closing a deal with Chinese companies. Never leave it up to chance. This way,  you avoid the hassle and cost of delays due to customs holding your goods. 

Venturing into importing goods into China is a lucrative yet complex undertaking. To ensure that all your bases are covered, you need partners in logistics that can dot the i’s and cross the t’s. We at ZhenHub offer tech-based logistics solutions that can fit every need. Contact us today to learn more about what we can do for your business or request a free quote to get things started. 

If you’re alone on Valentine’s Day, you may feel like you’re the only one in this world without a partner. But that’s okay; China now has a day that celebrates singled too.

The unofficial holiday is named the Single’s Day, and when you look at it, it’s bigger than both Black Friday and Cyber Monday, combined. This year’s Singles’ Day has come and gone with lots of records broken. The holiday is celebrated on November 11 -11/11.

So, what’s it with Alibaba and Singles’ Day?

The unofficial holiday was an idea conceived in the 1990s by a group of college students as a form of protest against China’s traditional festivals, most of which are predominantly couple-centric. But that’s only about history.

Singles’ Day is the world’s largest shopping event today, thanks to Alibaba. The retail giant came into the picture sometimes in 2009. That year, Alibaba rebranded what we’ve always known as Singles’ Day and promoted it as an opportunity for singles to splurge on themselves, offering massive discounts on goods on its TMall consumer-focused store.

That first year, Singles’ Day sales raked in about $7.5 million in gross merchandise value, GMV. Eight years after, this had become 3,000 times higher than the first year’s value of $25.3 billion.

It’s noteworthy that while it only took Chinese consumers the first two minutes to splash $1 billion in the 2017 Singles’ Day sales, Amazon needed 30 hours to hit that mark during the Amazon Prime Day sales, in the same 2017.

Singles’ Day Shopping & Festivities

Alibaba employs a combination of both massive online shopping discounts together with awe-inspiring offline entertainment.

The company has been organizing galas to mark the holiday celebration since 2009. These events are usually televised, drawing in an audience of about 200 million who would watch various things from celebrity performances to product launches, prize winnings, etc.

For 2018, the celebration had featured A-list names like Pharell Williams, Jessie J, along with a short kung-fu film that had featured Nicole Kidman, Jet Li, Donnie Chen, and many others, alongside Jack Ma, Alibaba’s co-founder.

Singles’ Day 2019

This year, the event kicked off with a bewildering concert headlined by Taylor Swift. This year, all it took for the retail giant to hit the consumer spending mark of $1 billion is a mere one minute and eight seconds. Sales for the 2019 edition raked in a total of $38.4 billion, more than the $30.8 billion recorded last year. That’s more than analysts predict for the combination of Thanksgiving, Black Friday, and Cyber Monda.

This year’s sales also surpassed last year’s number of orders and deliveries. At the heart of this massive success is Cainiao, Alibaba’s logistics network. The network has always been able to boldly handle the challenges that come with Singles’ Day sales very effectively. In 2017, more than 331 million boxes were dispatched on Singles’ Day sales. The first order only took 13 minutes to be delivered to the Shanghai customer who had ordered some snacks.

What can we learn from this?

Just like Alibaba has been able to do with Cainiao, fluidity in logistics will play a crucial role in the success of any e-commerce business. But while you may not have the financial muscle to pull such a network, ZhenHub can help. Here, everything we do is aimed at helping retailers simplify the processes involved in inventory, logistics, and much more.

Our resources will be deployed to help you refine these core areas of your business to give you a competitive boost and support your long-term business growth.

Click here to get started.

In the end, you’ll have to do the best for your business to get ahead in today’s competitive consumer markets. If you’re contemplating how to go about this, ZhenHub can help you get started!

What is co-packing?  

Scaling production can be costly to firms; thus, co-packing has become increasingly popular. Co-packing is a form of outsourcing; it involves the assembling of a product into its final packaged form by a third-party.  Co-packers are skilled at handling varying stages of the co-packing sequence and have access to in-house resources and well-established networks to respond to specific product packaging needs.

Through co-package investing, companies can scale, save time, and cut capital costs; co-packers already have the facilities, expertise, and staff required to ensure efficient and cost-minimized production methods. According to a Supply Chain Matters’ Contract Packaging survey, 68% claimed investing in co-packing increased their business flexibility, while 85% said it cut costs and increased margins.

Additionally, by delegating base production to co-packers, companies can better focus on improving their business processes, innovation and branding.

Leveraging Bonded Zones for Co-Packing

When considering co-packing investing, it is beneficial to outsource companies operating in free trade zones (FTZs) in China. Specifically, coastal zones, including Shanghai, Futian, Guangdong and Zhejiang, as they have robust port and trade networks, ensuring room for business growth. 

Co-packing companies that operate in these bonded zones include Asiapack, GPA Global, Presence Asia Group etc, and can receive and store products from anywhere before re-exporting them. This has multiple advantages: 

• Immediate Tax Rebates for Suppliers
• No Customs Duty for products made out of China. No Supplier-Client Tracking. No Export Licensing Issues 
• Increase supplier sources
• Enhance stock management and supply

The combination of having warehouses set up by co-packers in bonded areas also enables e-commerce businesses can tap into the Chinese market and sell products directly to consumers. This means the responsibility of import duties would be passed onto the individual consumer. 

If you need assistance with co-packing in China’s bonded zones, you can reach out to our specialists – hello(a)zhenhub.com or submit an enquiry here.

Rapid growth in the e-commerce sector is driving significant shifts in the global economy.  Nonetheless, this growth is becoming increasingly susceptible to trade tensions between China and the US. 

 China holds an important role in the global supply chain for manufactured products, which accounts for 60% of the world trade.  

Trump’s tariffs will thus impact e-commerce vendors across the globe that sell US products, processed in China, as they will inevitably inherit the higher costs. 

The tariffs have placed a strain on leading digital giant – Alibaba. In 2019 Alibaba recorded its second-slowest pace of revenue growth since 2016.

Alibaba is in a much stronger position to deal with the trade war than other Chinese e-commerce companies. Southeast Asia represents a lucrative market with cheap labor and low import tariffs. Alibaba has the resources and financial ability to capitalize on this while addressing any potential technological and geo-political barriers. The company has already made e-commerce investments worth $4 billion in Lazada. 

It seems, e-commerce companies that can shift to Southeast Asian markets and successfully navigate differing socio-economic complexities will emerge at the top amidst the ongoing trade war. 

If you need assistance with Cross Border Ecommerce in China, you can reach out to our specialists – hello(a)zhenhub.com or submit an enquiry here.

What is a bonded zone?

A bonded zone is an area within a country where there are special trade terms or policies. Generally arrangements for customs duties, import/export duties will differ from normal import/export procedures. For example, foreign goods can enter the region without paying duties and be kept bonded. The manufacturing and trade inside the zone can be exempt from value added and sales taxes.

Where are bonded zones in China? 

Since 1990, China has introduced six different special customs supervision areas, including free trade zones (FTZs), export processing zones (EPZs), bonded logistics parks (BLPs), bonded ports (BPs), and comprehensive bonded zones (CBZs). 

FTZs are a specific bonded zone where goods can be imported, manufactured, and exported with lowered taxes and smoother customs processes.  For instance, firms can make a collective declaration for imports and exports. This cuts clearance costs and increases declaration flexibility for firms. 

Currently, there are 11 FTZs in China. Each FTZ has an industry focus and corresponding incentives to attract foreign investment. First-generation FTZs (e.g. Shanghai – 2013) were concentrated near large trading ports to encourage a favorable business environment.  Six of the seven recent FTZs have been located inland to boost the economy of China’s interior.

You can read more detail about China’s FTZ areas here.

What are the changes to policies for cross border ecommerce from bonded zones?

Latest updates to cross border ecommerce policies in April, 2019:

• For ordinary cosmetics, comprehensive tax rate was lowered from 11.2% to 9.1% for ordinary cosmetics,
• For high end cosmetics, tax rate was lowered from 25.53% to 23.05%
• Postal tax rate dropped from 15% to 13% for food and medicine; and from 25% to 20% for textiles, leather garments, and electrical appliances
• Cross border ecommerce platforms need to integrate with local customs checkpoints to push 3 pieces of order information:
  • 1. Payment transaction
  • 2. Order information
  • 3. Shipping information and tracking number
• Daigous (individuals buying goods overseas and bringing them into China) and companies are strictly prohibited from reselling products that were imported via the cross-border channel.

For detailed list of rate for each product category, click here.

If you need assistance with Cross Border Ecommerce in China, you can reach out to our specialists – hello(a)zhenhub.com or submit an enquiry here.

That said, shipping from China to US is less complicated than retailers assume it to be. This article discusses the best China-to-US shipping solutions for eCommerce retailers. 

Standard Methods of Shipping from China to US

Regular Post

Shipping from China to US through Regular Post is the most affordable option for smaller items like paper products. In fact, in 2019 alone, there were over 103 billion parcels delivered. China Post offers services for larger packages. However, retailers should compare courier prices before opting for these as overall costs become cheaper with a courier service. Affordability comes at the expense of speed. 

Express Shipping via International Couriers

Otherwise known as express freight, express shipping via international couriers is the fastest option when shipping from China to US. Like Regular Post, Express Shipping is best reserved for smaller and lighter packages as the cost depends on the shipment’s weight. Moreover, some retailers have additional fees for delivery to remote areas as well as for handling. The average turnaround time for express shipping is 3 to 5 days. In recent years, there’s been a drive towards transparency and sustainable transport services. Couriers that have transparency initiatives and programs gain more prominence and preference.

Air Freight

As the name suggests, Air Freight entails cargo shipped by air. Air Freight shipping from China to US is the best option for transporting products with a total net weight of 100 kg to 500 kgs on a deadline. Products arrive in the United States often in less than a week. Airfreight is faster, safer, and more reliable, but it can be more expensive. While the air freight industry sustained considerable losses due to the pandemic, analysts believe it will rebound once countries lift restrictions.  

Sea Freight

Sea Freight involves shipping large numbers of merchandise over a significant distance by sea. It is the ideal choice for cargo that exceeds kgs. It offers more capacity and value than air freight but isn’t the fastest shipping option. Factors including the weather, holidays, and customs delays can affect the cargo’s arrival time.  

Customs Clearance Requirements

Clearance requirements vary from location to location. Shipping from China to US usually entails the following documents: Businesses need to be aware of new policies that may impact customs clearance. For instance, the new  VAT collection scheme for parcel imports into the EU made effective on January 1, 2021, will simplify customs clearance for parcel imports and enforce new complexities on an already burdened industry. 

Commercial Invoice

The commercial invoice is one of the most critical customs clearance documents. It is a binding contract between the exporter and importer that serves as proof of sale. It is essential in calculating the dues and taxes of a specific shipment. It enumerates the price, value, and number of goods included in the cargo. As more companies digitize their operations, more companies are using electronic invoices. The e-invoicing market had a CAGR (compounded annual growth rate) of around 17% during 2014-2019. And will likely grow even more in the coming years. 

Certificate of Origin

This document is necessary when shipping from China to US as it declares manufactured products’ origins. It details information regarding the product, the destination, and the country of origin. It is essential in cross-border shipments because it determines if they are eligible for import or subject to taxes. Companies are also looking at integrating blockchain-based information systems. Utilizing this method can immediately determine the origin at the border without a certifying authority. Implementing blockchain can also legitimize trade and promote compliance. 

Packing List

An export packing list is a document that enumerates all of the products and packing details that are within a cargo. It is a requirement for all sea freight and airfreight shipments. Customs uses this document to understand how products are packaged and whether it is compliant with the area’s regulations. 

Letter of Credit

A letter of credit or LC is a document that shows the commitment of a banking institution made on behalf of the importer that guarantees that the exporter receives the agreed-upon payment. Payment disbursement happens when the exporter meets all the terms and conditions within the letter of credit. LCs aren’t required. However, it is useful when the credit information of an exporter is hard to obtain. The financial sector is keen on supporting the business as the global letter of credit confirmation market was $4.30 billion in 2019 and projected to reach $4.99 billion by 2027.

Bill of Landing 

A bill of landing is a record of all the goods in the shipment. It is a contract between a shopper and their logistics company that acknowledges the receipt of the cargo. 

Shipping from China to US is more straightforward with the right team in tow.  ZhenHub can help your operation through the process. Sign up for our tech-powered, all-in-one logistics platform, and we can make the shipping process easier for you. Contact us now to learn more!