Are your operations being over-stressed by international shipping? When you are a buyer on a source to source basis in China, it is not only beneficial, but also imperative that you learn how to deal with the matters of customs laws, and transport logistics. Most new importers are not equipped to handle the complex nature of the same.
The documentation of customs, the Incoterms, taxes and handling charges easily go unnoticed until one of them slows or costs one money. With being a small online retailer or a business that is on the rise, one needs to comprehend how to best manage this process to defend your profit, endear your supply chain and develop trust in your customers.
As of 2024, online marketplaces make up most online purchases globally, and Amazon is the top marketplace by traffic. In this highly competitive environment, a well-managed sourcing and shipping strategy is a key factor in staying relevant, profitable, and customer-focused.
This guide will assist in making the process understandable and minimize costly errors.
Why Logistics Matter More Than You Think?
When a business decides to source products from overseas, the product itself is only part of the equation. That is when the actual challenge commences after placing that order. Customs and international shipping are not mere processes to follow without any direct impact on your timeframe, price and customer satisfaction.
When sourcing directly from China, you need to know how the products are transported from the factory floor to the doorstep. Any of the decisions would be added to the general performance of your supply chain like how to make the right shipping choice or how to prepare a set of customs documentations.
Key Shipping & Customs Strategies Every Importer Should Know
In order to make sure that your deliveries will not be late and will not be complicated, pay attention to the following best practices:
- Understand Incoterms Before You Place an Order
International Commercial Terms (commonly referred to as Incoterms) are rules that indicate the fraction of tasks between buyers and sellers around the world during international trade. To give an example, FOB (Free on Board) indicates that the buyer is not responsible until the products are brought to the shipping ship whereas EXW (Ex Works) indicates that all the major impacts fall on the buyer. Selecting the appropriate incoterm will also save you the trouble of hidden costs and misunderstanding in transport.
- Choose the Most Suitable Shipping Method
Air freight is more costly than sea freight but at the same time it is faster. Sea freight is normally cheaper when one is transporting a big consignment, or delivering a consignment that is not in a hurry. When shipping from China to Amazon FBA, numerous sellers choose sea freight with the help of the fulfillment centers delivering the last mile of delivery.
- Use the Correct HS Code
All products have their Harmonized System (HS) code under which the duty charges to a particular product are calculated by the customs department. Applying inappropriate code may slow down clearance or may end up in an overcharge. Finalise documents with correct code as checked with your supplier /freight forwarder.
- Work with a Reputable Freight Forwarder
A competent freight carrier is a logistics provider. They arrange the collection of goods in a factory and their delivery up to the final destination, arrange all necessary documents, clear the goods and correctly declare them. This makes the chances of you experiencing delays and miscommunication at the customs very small.
- Anticipate Customs Delays and Plan Accordingly
The delays may arise due to customs checks, document mismatches and traffic during certain seasons. To ensure your business runs smoothly, create some extra time in your delivery time, especially during holidays or large shipping periods.
Avoiding Common Errors When Importing from China
Errors in shipping and customs procedures are quite normal and can be prevented through planning measures.
Assuming the Supplier Manages Everything
Many Chinese suppliers are focused solely on manufacturing. They do not necessarily have to provide shipping arrangements, documentation, or customs compliance unless agreed in writing.
Avoiding Common Errors When Importing from China
Errors in shipping and customs procedures are quite normal and can be prevented through planning measures.
Assuming the Supplier Manages Everything
Many Chinese suppliers are focused solely on manufacturing. They do not necessarily have to provide shipping arrangements, documentation, or customs compliance, unless agreed in writing.
Incorrect or Incomplete Documentation
Mistakes in the business receipt, sorting list or even the transport document will initiate an inspection or even rejection. Make sure that all documents should be correct and homogeneous.
Neglecting Packaging Requirements
Failure to package products well or label them appropriately may cause delays at the customs or damage when shipped. Checkout labeling and packaging requirements in the country you are going.
Forgetting Cargo Insurance
There are numerous risks that international shipments have to face such as losses, thefts and damages. Insurance gives a safety cover to what you invest on.
Confusion Between DDP and DDU
Delivered Duty Paid (DDP) implies that the seller is paying all custom duties. Delivered Duty Unpaid (DDU) lets the burden be on the buyer. Put these terms under the clearance to avert such clinchers after landing.
Customs Compliance: Documentation, Taxes & Regulations
When you import products from China, proper compliance with customs is important. Lost or inaccurate paperwork may lead to incurring unwarranted costs or even detention of products. Ensure your paperwork includes:
Commercial Invoice and Packing List
These should clearly state the item descriptions, quantities, declared values, and country of origin. Any inconsistencies may cause customs delays.
Certificate of Origin (if applicable)
This document certifies the country where the goods were manufactured. It may qualify your goods for lower import duties, depending on trade agreements.
Import Permit or License
Electronics, beauty products, and food products belong to categories that need certain import licenses. Find out your local ordinance before making an order.
Just Declaration of Value
It is frowned upon to undervalue shipments as a method of reducing customs and it can draw a fine or seizure. To avoid any of such compliance issues, quote the goods at a real price.
Practical Tips for Smooth Shipping & Customs Handling
The following are some of the additional tips that would help make the process less daunting:
Make Consistent Communications with the Suppliers and Shippers
Maintaining open communication would make sure that all the parties receive the behind the scene information of schedules, records, and accountabilities.
Keep Updated of the Laws of the Country of Destination
The import duties and the customs laws are quite different. Become acquainted with the latest rules and tax limits.
Track Shipments with the Digital Tools
A big number of freight forwarders have their own digital dashboards, which are used to check on the progress of your shipment.
Record all Transactions
Never lose any invoices, shipment documents, or correspondence in case of any problems during the delivery or after the delivery.
Conclusion
Experience in shipping and customs is a huge component in running an effective international sourcing program. The knowledge regarding your role and cooperation with the appropriate professionals can bring the list of the risks significantly shorter, although the whole process might seem too much at first.
You may retain your margins, simplify your logistical operations and offer a superior experience to your clients by focusing on small details.
