Practical & Powerful Advice on importing from China to the US – W Group

September 1, 2020

Sue wants to profit by importing goods from China to the US.
She doesn’t feel like doing mountains of research.
Surely it can’t be too difficult – so many people are already doing it.
Starry-eyed, Sue places a large order for stainless steel cutlery sets from a Chinese supplier. She knows she can sell it on Amazon for a nice profit. 
Excited, she sends the wire transfer payment and arranges the shipping method. Once the money is sent, Sue doesn’t hear any updates from the supplier or the shipper. She emails once, twice, three times. Sue starts getting nervous…
Will she ever receive the items she paid for?

With WGroup’s 30 years of importing experience, we confidently say that importing from China doesn’t have to be anxiety-ridden.
But, you do have to know how it works.

If you’ve already scoured the internet for a simple DIY guide on importing from China to the US then you’ve discovered that there’s no such thing.
Importing guides outline multiple scenarios and direct you with complicated procedures, all the while telling you it’s simpler to use their services.
The WGroup importing guide is different.
This is not a textbook reference for all possible solutions or zany outcomes.

The purpose of this guide is to outline import requirements so you are aware of proper procedures and can be proactive in bringing the goods to your door, faster. 

The US importing process is complex and confusing. And, it is often costly too – when merchandise is slapped with unexpected delays, and with unexpected regulatory or shipping fees. Learning from W Group’s experienced importers saves you undue stress.

4 key points to ensure smooth shipping and happy delivery:

1. Know who is taking responsibility for transportation and delivery.
2. Understand the expected import taxes and factor it into your expenses.
3. Make sure you are compliant with government regulations.
4. Be prepared with all the necessary documents.

1. Know who is taking responsibility for transportation and delivery.

When does ownership of the goods transfer from the seller to the buyer?
This is determined in your agreement with the seller, where you would define the rights and obligations of the importer/exporter.

These are standard incoterms you should know:

Ex Works (EXW)
Seller makes the goods available at a designated location, and the buyer assumes the responsibility of the products and covers the transport costs.

Free Carrier (FCA)
Seller is responsible for the delivery of goods to a buyer-specified courier. The seller includes transportation costs in its price and assumes the risk of loss until the agreed carrier receives the products.

Free Alongside Ship (FAS)
Seller arranges for the goods to be delivered next to a particular ship in a port. The risk of loss or damage is the buyer’s responsibility once the merchandise is alongside the ship.

Free on Board (FOB)
Seller must load the goods at the originating port. Once loaded, the buyer assumes the risks and is responsible for the costs of shipping to the final destination. 

Cost and Freight (CFR)
Seller is required to pay and arrange for bringing the items to the port of destination, and then to provide the buyer with the necessary documents for release. But, the risk is transferred to the buyer when the goods are loaded on the ship. 

Cost, Insurance, and Freight (CIF)
Like CFR, with the exception that the seller must pay for insurance.

Carrier and Insurance Paid to (CIP)
Seller pays freight and insurance to deliver goods to a seller-appointed party. Risk passes when the stock is handed over to the first carrier.

Delivered Duty Paid (DDP)
Seller is responsible for risk and costs with transporting the goods until the destination. 

2. Understand the expected import taxes and factor it into your expenses.

What is the import tax from China to USA?
Import tax = Customs Value * Duty Rate
The customs value is determined by HS coding. Check the code and duty rate for your product on the US import tariff website. You may need to do research on the CPB site to establish the correct classification. Despite the research you do, experienced importers like W Group know that the CPB has the final ruling on the HS code.
Calculate your custom duty charge for an estimation of the fees you can expect.

Some common exceptions:

1. Due to the uncertainty of the 2020 economy, some tariffs and regulations have been lifted. For a list of items you can import from China without tariffs, see the US tariff exclusions.

2. US Customs does not impose tariffs on personal imports valued under $800. There are additional limits on alcoholic beverages, cigarettes, cigars, and other tobacco products.  Additionally, US Customs still has the right to request a formal customs clearance.

3. Make sure you are compliant with USA government regulations.

To do so, you need to know the China import procedure:

Product compliance
As an importer, you must ensure your imported products meet all US federal requirements. This might entail permits from specific federal agencies. 
Some of the agencies for common imports that require compliance are:

Customs bonds
When imports require US federal agency compliance or when the imports are valued at more than $2,500, a customs bond might be mandatory. 
A customs bond is an insurance policy guaranteeing the payment of duties and taxes to the U.S. government when you are importing merchandise.

4. Be prepared with all the necessary documents.

But first, you must know what they are.

Basic required documents:

Bill of lading
A receipt listing the items to be imported. 

Commercial invoice
List the country of origin, purchase price, and HS code.

Packing list
This provides details on the imported goods.

Arrival notice
This confirms shipment arrival by a U.S. Customs Agent.
If you can have all these crucial documents uploaded on a digital platform it may save you much time and aggravation. Original documents are often mandatory and if that goes missing so does an easy import process. Thankfully, digital documents are accepted.

Congrats! You know the importing essentials!

You’re now prepared with the information you need to start the importing process. It’s time to put this into action and make that profit you’ve been dreaming of. Check global freight services to see how WGroup can simplify US imports for you.

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