Starting an import business from China is definitely an attractive idea. It is one of the most lucrative business industries today and anyone who ventures on this business type will be successful as long as he knows the way to treat Chinese product suppliers properly and he sees that there is not any irregularity in this business. know about why China Is Important for Global Sourcing Companies?
The financial system of any economy is quite similar to the soul of the body. Businesses of China are trading in the international market in order to earn large amounts of profits and to keep a large chunk of foreign reserves for their economy. This is true when we say that the overall financial system is fueled by the resources and labor force to run the economy. Importing products from China is really economical and they have an international trade system in order to raise the wheels of commerce through proper transmissions.
What is Global Sourcing Companies?
Various goods from different countries can be easily accessible from China. As we all know that it is the first largest holder of foreign reserves in the world and this is possible only by importing products. All the businessmen and entrepreneurs working in different countries of the world are making huge profits by importing from and dealing with this country with the help of a reputed China sourcing agent.
If you have found any good that can generate huge demand and is not currently available in China, you can take the next step and start importing goods from abroad. Various aspects should be considered before starting this venture. In this blog, I am going to share with you some tips and strategies that will help you create an effective business strategy:
1. Once you decide which product you need to import, you need to find a supplier that is appropriate for this business. This is crucial for the success of your business, as it will reduce your margin profit if you are paying too much for that particular goods.
2. Suppliers should be able to supply your products on a regular basis, you cannot deal with any supplier who may not be able to supply based on your product demand. Here, you can also consider supplier auditing services from a reputed firm that can help in finding the right supplier.
3. The quality of your product show what you can charge for it in China and this will improve your reputation and make the client satisfied when the product is good enough.
4. It can also be difficult to manage a long-distance relationship with your supplier so that you need to be comfortable with yourself to achieve your goal of the business for Global Sourcing Companies.
6. Customs duty should be noted as you can pay too much or not supply all the right documents
7. The final tip on this list will be what price you can charge for doing the research and see if it will be viable as a Chinese import. If the margin of your profit is going down, you may need to rethink your products.
Now, Let’s have a look at Import Duty & Tax from China
We cannot precede our works without knowing about taxes and import duties when it is derived from China imports.
• Calculation of Imported Duty
The customs duty value of the import is calculated in the percentage in most of the cases. A product classification rate id is generated which will be dependent on the duty staff.
FOB value in most of the countries, the value of custom is based.
- Duty = Product price * Duty %
- CIF value, the customs value is generally calculated in most of the countries.
- Duty = (cost of shipping + Product price + cost of insurance) * duty %
• Calculation of Sales Tax
Calculation of sales tax (VAT and GST) is executed on the customs value and duty paid in the percentage. A few countries carry other taxes with various factors of tax:
Sales tax = (duty + CIF value) * sales tax %
Standard tax rates in most of the countries are mandatory to subject goods to import, but in some other cases, sales tax may not be applicable like foodstuff, medicines, books, to name a few and also applicable to few products like beverages (alcoholic).