For a businessman, importing goods from China can generate higher profits.
However, there are several barriers to entry when importing from China, such as the language barrier, lacking import experience, etc.
In this actionable step-by-step guide I’ll show you how you can import products from China to the UK.
It’s actually 10x easier than you think!
You’ll learn how to quickly find Chinese suppliers, correctly calculate import tax, avoid the risks, and arrange shipment. OK, let’s begin!
Step #1. Identifying Product Import Duties on gov.uk to Avoid Losses.
All UK importers are concerned with the same questions:
- What are the import duties and the VAT to import goods from China to the UK?
- And are there any customs limits for my chosen product(s)?
If you use the wrong commodity code or misunderstand the product regulations, it could lead to you incurring huge losses and may even ruin your business.
Therefore, it is crucial that you get the correct information to begin with.
Where to get this information?
The answer is extremely simple, search the official UK government website gov.uk.
(Screenshot-of-gov.uk)
They have regularly updated and accurate information to help you when importing goods from China to the UK.
In this chapter, I’ll show you how to use gov.uk to search for the correct import duties and VAT rates.
Do you know that each product has a specific commodity code?
It’s also known as a tariff code. This is a specific code for HMRC to identify how much tax you should pay.
If you don’t know your product tariff code, don’t worry, you can look up your product to get tariff code.
Let’s suppose you’re importing a women’s dress. Search for “dress”
(Enter the product name or commodity code)
The search results will show you a list and you’ll need to select the correct type.
For example, if our product is a women’s knitted dress, then we should choose #61-04, not #62-04.
(Be careful to choose the right category)
Open the 61-04 selection to choose the dress material:
(Choose the material)
Choose the material of dress, then you’ll see the overview of the dress commodity code.
In this example it’s 6104420000, and the duty rate is 12%, but it’s quite ambiguous regarding the VAT, since you don’t know if it’s a standard 20% or 0%.
Don’t worry, just click the Import Tap.
Type in ‘China’ to confirm the VAT. In the results, select ‘ERGA OMNES’.
This includes China and this means that the VAT rate is 20%.
(Check the correct VAT rate)
Step #2. Get to Know Common Import Charges from China to the UK
One of questions that we get asked the most is:
How much are the common import charges when importing goods from China to the UK?
It’s important to know a ballpark figure so that you can calculate profit.
The following table will show you the common charges you’ll be subject to when importing from China.
Some charges, such as customs charges and freight charges we can’t provide a detailed price for because the conditions of each importer’s order are different.
Product cost: VariesIn general, the Chinese supplier will quote a FOB price that includes all China inland costs. FOB price = Ex-factory price x Quantity + all China inland costs before shipping |
Freight Charges: VariesFreight price is based on the size of your shipment, the mode of transport, the origin, and the destination port. Is the shipment Less than Container Load (LCL) or Full Container Load (FCL)? Is the shipment going by air or ocean?
(How a LCL shipment be delivered) |
Quality Inspection: $200 – 300/dayFor general commodities, the inspection fee is around $200~$300/day per inspector. It’s better than any problems be found before the products depart from the supplier’s warehouse.
(Professional QC company is checking a cap sample) |
Product Insurance: 0.3% – 0.5%Be ready for anything. Insurance is necessary as it protect against damages and for items going missing in transit. If your supplier quotes you a CIF price, it means they will undertake the risk during shipping. If it’s a FOB price, it means you should purchase cargo insurance yourself. The cargo insurance charge range is 0.3%~0.5% of the shipment value.
(You need consider the sea shipping risk) |
Arrival Agent Fees: Avg. $300 – $500When goods arrive at a UK port you need a broker to help you clear customs. We suggest that you don’t let the Chinese forwarder help you to contact a UK agent. This is because the price is always higher than if you’d contact the local agent directly. You need to register for an EORI number, as your courier or freight forwarder will need it.
(Apply a EORI number in gov.uk) |
Custom Duty (Tax): VariesEach kind of product has a different tariff code that will show you what duty rate you should pay. Duty = duty rate x product cost The general workable method to avoid high duty is to let your supplier declare a lower value, but this needs to be within a reasonable range or it will be noticed and you will be punished by customs. |
VAT: 20%VAT = (product price +shipping fee + insurance + duty) x 20% The official explanation is here: VAT registration |
Warehouse Fees: $50 – $150If the fee was not included in your shipping arrangements, you’ll need to pay the warehouse for holding your goods. Fee can vary depending on the weight and volume. You must pick up your shipment before the specified date, or it will incur a demurrage charge. |
Domestic Logistic: VariesYour arrival agent will help you contact domestic trucking or haulage. It’s best to check with at least 2 agents’ quotes if you’re new to importing and ensure you’re getting a fair deal. Have this organised well in advance of your shipment’s arrival, to avoid costly delays. |
Step #3. Three Solutions to Find Chinese Suppliers Quickly
Obviously, finding a suitable Chinese supplier is very important.
If you find a highly cooperating and responsible factory, who also have a good production capacity, you’ll save a lot of work and time.
Ok, but where to find these Chinese manufacturers?
Actually, it’s extremely simple!
You can easily find them through the 3 mainstream methods: Chinese business websites, fairs and markets.
Chinese Business Portals
First, let’s talk about the most popular way to source products – from Chinese business portals.
Below are 3 Chinese business portals that are currently enjoying plenty of international prestige.
Alibaba: China’s biggest online e-commerce company. Almost every importer knows Alibaba, and it’s a good choice when your single product is required in medium or large quantities.
Global Sources: A Hong-Kong based business-to-business media company, with more than 1 million international buyers, including 95 of the world’s top 100 retailers. Their Electronics, Gifts, Home and Fashion trade shows also attract many international buyers every year.
Aliexpress: This retail portal, which is owned by Alibaba, is suitable for some start-up businessmen to start buying from China.
(screenshot of Aliexpress product list)
For these large business portals, the biggest problem is the homogenization of product is widespread, and it’s hard to find a good supplier quickly, so some people will try the other 2 methods.
More resources:
Alibaba 101: How to Safely Source Products from the World’s Biggest Supplier Directory
China Sourcing Fairs
One of the China sourcing fairs you have to know is the China Import & Export Fair (Canton Fair).
It’s the largest comprehensive fair in China, with almost every industry included.
(China Import and Export Fair)
It holds an exhibition in Guangzhou during spring and autumn every year.
Canton Fair has a very long history, the largest scale, and the highest level of business exhibition for foreign trade.
There’re also a lot of specific fairs held in China each year, just google it or search on 10times.com.
China Wholesale Marketplace:
We have to mention the world largest wholesale market for general merchandise – Yiwu Market. The official name is Yiwu International Trade City.
(The largest wholesale market for general merchandise in the world-Yiwu market)
Yiwu International Trade City consists of the International Trade Mart (District 1 to District 5).
The market covers 4,300,000 ㎡ with 63,000 booths inside and 100,000 suppliers exhibiting 410,000 kinds of products.
The market opens every day (except during the Chinese New Year holiday – Spring Festival) for 8 hours a Day (9:00-5:00), 7 days a week.
It’s just like a grand fair that never ends!
Step #4. Cheaper Shipping from China to UK with a Chinese Forwarder
You’re probably wondering:
It’s easy to find a UK Shipping Forwarder to assist me with importing goods into the UK, so why I should use a Chinese forwarder?
Let me answer that with another question, who wants to refuse even cheap shipping from China to UK?
No matter whether you’re shipping FCL or LCL, a Chinese Shipping Forwarder has a greater price advantage than a UK Forwarder because in China a Chinese Forwarder has access to more domestic resources.
(Chinese shipping forwarder rep manage loading container)
Besides the cheaper shipping charge, they’ll also provide you more convenience such as making customs clearance faster, and possessing other domestic problem-solving abilities.
Certainly, it’s not 100% absolutely, for some shipping route, your native forwarder will have better price and service.
Step #5. Check the Quality Before Loading onto the Container to Avoid Any Surprises!
In many people’e eyes, “Made in China” represents cheap, poor quality goods.
Yes, but in some situations it’s not that the Chinese manufacturers can’t produce cheap and good quality products, it’s just that some manufacturers are cutting corners.
Don’t trust the first sample! Most of suppliers are honest, but there’s still dishonest suppliers out there, and there’s no way to guarantee that you won’t run into them.
For some unscrupulous suppliers, after you confirm the sample and place an order for production, they’ll change the material or use a cheaper technique.
(check-bulk-production-sample-is-very-necessary)
They only see profits, whereas they can unwittingly create faults which could be deadly for your business.
So how to avoid this from happening?
First, during the production you can ask them to send a sample from the bulk production.
Confirming the shipping sample is absolutely necessary, and if your order has different colors or sizes, you need to request a sample of a whole set, not just a single product.
Second, hire a third-party company to check the condition of your goods before they’re loaded into the container.
(QC company check quality in the factory)
If the problem can be found before loading, the problem can always be fixed quicker and cheaper.
Don’t wait for the product to arrive in the UK and then check quality, as returning the goods and waiting for a new production will generate a financial loss and take up your valuable time.
Step #6. Save Money & Time by Hiring a Custom Clearance Agent in the UK
This is for the same reasons that you need to hire a Chinese Shipping Forwarder in China.
Hiring an agent in UK is cheaper because natives have a greater access to domestic resources.
Some of our clients have asked us, “Can I pick up the goods from the port/air station and clear customs by myself?”
Yes, you can do custom clearance yourself, but it is not something I’d recommend. It involves several third parties, there’s a lot of paperwork, and you’ll spend so much time involved in this that it’s not likely to save you much money, if any.
Let the UK Customs Broker deal with that, and you can then focus on your own core business, making things more efficient and further improving it.
Step #7. 2017’s Newest Cheap Shipping Option – Freight Train from China to UK
(Freight train from Yiwu to London)
Many people already heard about “The Belt and Road Initiative” by China’s government, but most people are left wondering: “Does this have anything with my business?”
Certainly, you don’t need to know the government’s deep intent, but you do need to know what affect it will have on your business. For UK importers, you have to know that, as of 2017, there’s a Freight Train from China running directly to the UK.
From Yiwu, China to London, Barking Station, the distance is 12,451 kilometers, and the train only takes 18 days. Much faster than sea freight!
(From Yiwu to London distance)
What about the price?
The price also much cheaper than air freight, which means that you can save money and time with this new shipping method.
More resources:
All aboard the China-to-London freight train
First Direct London-China Freight Train Completes 12,000-Kilometre Run
Conclusion:
We can look at importing from China to the UK as being simple as buying domestically, just with a few extra steps in there.
Find a suitable Chinese supplier, calculate the UK import tax, use a Chinese Forwarder to arrange the shipment, check the quality before loading onto the container, hire a UK Customs Broker, and arrange the domestic transportation.
Some of the steps might seem very daunting, and perhaps you’re concerned that you might not handle it properly, or fully understand it. It’s normal to think like this when you’re trying something for the first time. You will gain the practical knowledge and confidence necessary to expand your comfort zone by getting started.
You can always look for a professional company to provide consultation. Being detail-orientated is a good character trait to have for the import business, but it is fast paced, and sometimes you will miss a business opportunity if you’re looking too closely.
Certainly, this article can’t cover every angle of importing from China to the UK, I’ve only picked out the facts which I consider to be the most important. You are welcome to leave your comments or questions below.
