Choosing the best thing to import from China.

bikeEvery day I must get 3 or 4 people that email me and ask what is the best thing to import from China. If you really stop and think about it you will agree that it’s a pretty stupid question. The best thing to import will entirely depend on you and your own situation.

No matter what product you can think of, the likelihood is that a version of it will be being imported from China by someone. Traditionally that person will have arrived at importing that particular product through an existing business model that demanded a better margin. These days however, people are searching to build entirely new standalone business models based around the principle of sourcing a new product from China that offers attractive margins.

So lets stop and think for a minute.

There is no such thing as “The best products to import from China”. There is however such a thing as the best product suited to you but in reality only you are going to be able to discover what that is through brainstorming and researching for yourself. Google wont tell you but this blog post might help give you some ideas.

Ask yourself what do you have knowledge about? What can you offer your customer? How can you deliver a better service? Do you have the infrastructure to move the product? Can you afford to compete in this niche? Should you just spend your money at the casino?

What I mean is that you need to evaluate a very basic bit of business thinking. Don’t try to reinvent something, look at someone who is already making money and find a way to better the service they offer. Don’t even think about competing on a price only level, it is a waste of time unless you’re the Tesco’s of this world.

The reason eBay is so full right now of once great margin products that are being sold at extremely minimal profits is because people come onto the scene and just undercut the main seller by 10% and everyone starts dropping the prices until no one is making any money. Don’t end up in this position.

So Firstly you need to add some value, set yourself apart, don’t reinvent the wheel but try make your wheel a bit better.

Then you need to remember something a lot of people forget. To be good at this importing game you have to have an outlet for all the things your importing. You need to be able to sell.

I have quite a bit of experience selling things. When I first moved here people would ask me what I recommended they should import from China. They had money but they didn’t know what they should import. I remember several specific clients who came at me like this and I did something I wont do anymore, I told them what I would import if I was them. The problem was they were not me and I was not them.

I would give them a great product that is selling online for good money across various platforms. Guide them through the importing process so the goods safely arrive with them. They would complain when they couldn’t make it work because they couldn’t sell the product.

This is when a lot of people who really shouldn’t try to be an “entrepreneur” kind of cross the line. “Yeah but I don’t like sales”. Are you kidding me? You don’t like sales but you want to make money? I think you should go read one of those blogs about pyramid schemes.

And by selling I don’t mean simply selling a product that everyone wants and has a market value you intend to heavily undercut. If it was that easy I think everyone would be importing from China.

Sometimes you have an item that’s a tough sell, sometimes your container arrived 2 weeks after some other seller got theirs and established the market share, sometimes a product has a fault that demands some true entrepreneurial flair to shift. You have to be able to sell and that means selling in the good times and the bad.

Being an entrepreneur is about making sales, Period. I don’t care what you think, your wrong if you think you can be in business and not be able to make sales. Any single thing that generates money is based on sales. You are selling a product, a service, a holiday, you’re a musician, a model, a builder. Whatever you are doing you’re selling something. If you are not good at sales then you’re at quite a disadvantage.

Ok I will admit it, that paragraph is a bit harsh but then I’m afraid sometimes the truth is harsh. Don’t run away and hide if this scares you, I also didn’t like sales when I started.

Back in 2002 I studied architecture at university and I picked up some great core skills from that degree that, although I don’t work as an architect, are extremely useful for what I do in business.  I learnt how to use design based software that I used to develop products such as bicycles I imported from Canada and Taiwan, I learnt how to drink 4 pints of beer at the same time and most importantly I learnt how to sell.

As an architect you are essentially putting forward your design proposal to funders or project managers who will need to approve your submission based on its design merits and environmental impact. In reality there is only so much you can do in terms of design, especially with UK building and planning regulations, the majority of times a contract is awarded a good sales pitch has a lot to do with it.

I will be the first to admit it. I had a great time at uni and it will be an experience I will look back on with fondness for the rest of my life. These great times however did impact my design submissions and each time my social life grew, my submission was effected. This meant I had to become good at selling my proposals at the end of project. This happened in critiques where we presented our designs in front of our tutors and the other 70 something students, 30-40% of whom were also hungover. It was intimidating but by god it taught me how to pitch an idea.

Once I had inadvertently discovered how to sell I also inadvertently started my first real business. I had learnt the importance of sales. If I can do it so can you.

You have to remember that importing a product isn’t the making of an entrepreneur, really it’s the easy part. If someone orders a container of something from me there isn’t much work to do on their part, their entrepreneurialism begins when the container hits their warehouse and they need to turn the stock over. They have to sell.

Don’t panic we are not talking about cold calling or pushing yourself on people. Unless you bought a container of utter rubbish there is a pretty good chance that people will already be actively searching online for your product, just put yourself out there.

After you have grasped the concept that you need to be sure you can sell what it is you want to buy then you need to think about what capacity you can actually buy it and if that is viable for your budget and infrastructure.

If your looking to build a business from your spare room then these days it will be difficult, the competition there is pretty stiff as a lot of people can obviously do this. The barriers for people looking to sell leather beds for example are a bit bigger than those who want to sell phone cases online so competition in an area like that will be a lot less due to these barriers to entry. By barriers to entry i mean that to sell something like leather bed frames you will need warehouse space, distribution infrastructure, reasonable capital, and some staff to help with the operation. Not everyone has access to these things so they are described as barriers.

I’m not saying you can’t operate in a smaller way though, you just need to be smart about the product selection. Selling something like CCTV kits which are high value and relatively small in size is quite a nice niche area. People who have a couple of thousand pounds to spend cant have a go at it due to minimum investment requirements so competition will be less than in say an area like laser pens where anyone can jump in. Once you got going with CCTV you could easily build a range, a brand, hire installers – It could grow into a real business.

Again I will reiterate that you need to bring something to the table here to set you apart from the other people already doing this. Product knowledge, sales skills, slick infrastructure, unique product features, industry contacts and high investment capital. You need at least one of these things, three or four would be better.

To try and give a bit of insight I will explain a bit about 3 different types of customers I sell to so you can kind of see what I am getting at and see where you fit in.

Customer 1 – The Chancer.

Dave is not happy with his job and has always wanted to do something else, He has no idea what. He spends a lot of time on the Internet reading about people who make money importing from China and would love to try it but doesn’t know how.

Dave has decided to sell his pride and joy BMW M3 that he spent the past 5 years paying off to have a go at importing from China and selling on eBay. His wife is not impressed.

As he has never done this before there is a good chance Dave will not profit from this venture but understands his first foray into importing will be a learning curve and as such aims to treat it as an education to better him for future business.

Selling his car gives Dave a total stake of 15,000 gbp, which he decides he will put towards 3 products within a product niche he has discovered while researching eBay. Kind of like the products you will see HERE (insert Link to import ideas tab) Dave has come across a niche with a decent margin, low competition and decent sell through rate.

Dave has decided to sell kitchen related items as he has worked in the kitchen industry for 11 years. After researching online niches within this market he has come across some great items he is excited about.

He can see that someone else is making 370 pounds a day in profit from the products he is planning on selling and he thinks he can take a bite of the apple.

He has never sold on eBay in this capacity before but thinks his previous experience in customer service and kitchens will help him to offer his customers something more than his competition.

If you’re a chancer your in a bit of dangerous territory, your probably too open to taking on any advice given to you and the likelihood is that you will receive too much contradictory advice. What is important is to pick a strategy that works for you and stick to it. Don’t listen to someone who is telling you to pick a product, order in bulk and focus on price point while taking on advice from the guy who tells you to spread your risk across several product niches and offer variety.

Customer 2 – The Online Retailer.

Andy owns an online shop selling laptop cases. He is also a prominent seller on eBay and Amazon. He started off selling goods from his computer shop and has expanded to a small warehouse where, along with his wife Debbie, him and 3 staff fulfil orders generated online each day.

Andy hopes to grow into one of the main online sellers of laptop cases in the UK and knows he needs a consistent and reliable product supply to do so. He has visited China before and has bought product but has struggled to find a quality supplier he can depend on to deliver his goods.

The husband and wife team have also been working on a line of branded cases and bags that they have wanted to produce in China but have struggled to find a partner to take on the relatively low unit orders they want to place in order to trial the product.

Once launched, Andy’s branded range will open his business up to new possibilities including wholesaling his product to independent stores and resellers and positioning himself as a distributor for his own brand.

Andy is a pretty straight forward type of customer to deal with, He knows what he wants and he knows the price point he can pay for the goods.  Andy came to me looking for such a service and because he was targeted in his requirements I was able to help him.

He could have quite easily come to me and said “Dan this is a list of what I sell in my shop, can you find me price for 10 of each from China”. Thankfully Andy understood that after surcharges for small orders,  shipping fees and tax he would likely end up paying more per unit than he could if he bought them from the UK.

He realised that focusing on one area and being strong in it made more sense than trying to order a handful of goods in every category within computing.

Customer 3 – The Wholesaler.

John is a reseller of a flooring product in the UK. He moves extremely large volumes of this product and has been doing so for many years. The business has a substantial customer base which is open to take on more product if John can source the amounts required. The margin per unit is small but the amount John sells each month makes it a viable business.

John needs 2 things. A way of shaving literally pennies of each unit price (because saving 0.20 gbp per unit across his monthly order would save him 3000 gbp per month) and he needs a way of making sure what he orders is what lands at his warehouse each month.

The cash rich nature of Johns business means he can afford to buy in extremely large numbers driving his purchase price as low down as possible. Smaller resellers can’t compete with him in this area.

John is no stranger to importing. He has been importing product into the UK for decades from various countries. The flooring business is something that was operated by his father previously and the family has a great deal of experience and knowledge in this area. All they lack is the ability to produce the product they sell so they must outsource it to China.

Having found that John can really move large volumes if this product I decided to open a factory to better serve John and other customers like him for this specific product. When you find an item you can move in volume you have to really commit and go for it. You can see some images of the factory I opened below:

photo(2)

photo(1)These 3 types of customer are not the only “pigeon holes” there must be hundreds but they are 3 examples of people who import from China and the reasons why they have selected a product area to work in.

They all have something which means they give the product some added value, be it experience, product knowledge or an existing customer base. What do you have? Think hard about it I can assure you that you will have something you perhaps didn’t realise.

Try to figure out not what it is you want to do but why do you want to do it. By this I mean why do you want to take this step? Are you looking to leave a full time job to spend more time with your son? Well don’t go setting up a large scale business which will tie you up more than you are now. Are you looking to build a business which you can sell in the future? Well make sure your business has some value with you removed such as a registered design patent or trademark.

So how can I find an item to import from China?

Well look at what you have learnt. You need to find someone who is doing something you think you can do a better job at and then do it. The office furniture shop in that retail park near Mcdonalds that you drive past each day, can you compete wit him? The guy selling thousands of workshop tools a month across eBay and Amazon, can you offer his customers more? The new scooter everyone is wanting for Christmas, can you design a product to out do it?

You will get the idea here that no one is going to tell you what product you can import. You have to work that out. You can look through the suggestions I have made at the start of this article and see that somewhere in the world that seller is making a good income from that item, that doesn’t mean it’s the right item for you though. Only you will know that.

Think about what I said above, try to build a business around the item too. If you find something that works then develop a brand, make a logo, trademark a name. Create some real added value and a brand that you may be able to sell in the future. Can you picture yourself with a line of hand tools carrying your own brand? It’s not as hard as you would think to make it happen.

Get realistic.

Picture the life you want for yourself, the car you want to drive, the house you want to live in. Does the owner of those things import the item your looking at? A guy today asked me on skype what I thought the potential of this item was:

how to use alibaba

I think it has the potential to waste both of our time is what I think! Perhaps a great item if you are the owner of a chain of pound shops, not so great if you’re looking at an item to sell on eBay.

How much will my item cost?

Here is another area a lot of people waste time on. I’m talking about searching and searching for better quotes or scouring for that golden item.

I remember about 8 years ago when you could still import an item from China and the gross profit before shipping and taxes was still around 10 fold. These days are sadly gone. Your not going to come across an item you can sell in decent volume and make 10 times your investment on. You wont.

What you will find is a lot of things you can double your money on and the odd few that are a bit better. The ones with a higher return on them demand more than just simple reselling though and really for the purpose if this article we are talking about buying and selling not developing a niche product from scratch.

Lets look at 3 items currently selling on eBay and discuss the pricing an profit on each of them to give you an idea.

pine table

Firstly this coffee table above is a nice simple item that is selling steadily at around 6 units a day. I would advise taking a 20ft container load of something like this, maybe splitting it into 2/3 styles if your supplier will allow. As you can see the coffee table is selling for 50 gbp and you can likely buy it for around 20-25 gbp. You will then need to ship it to the UK and pay the local taxes.

On something like we are talking about an investment of 12,500 gbp including shipping. If you can move them in the same kind of volume as this seller then you can turn the stock over in 6-8 weeks. Should leave you with a gross profit of around 8-10,000 gbp.

Here is a similar item (well it’s a coffee table, but yes a different design) selling in higher volume but with a slightly lower margin.

glass coffee table

Much quicker turnover with around 10 items selling a day but the profit % per unit is a little less as these are around 20 gbp to buy and selling at 43 gbp. So this should give you an example that you can sacrifice margin for higher volume sales thus turning over your investment in a shorter space of time.

This is just a guide, some things have been hammered so much by competitive sellers that hardly any margin exists. Things like iphone 5 screen below for example has sold more than 5000 units with round 70 sales a day but the margin is very small.

iphone screen

These screes are around 16 gbp here and now sell on eBay for 20 gbp free postage. There is no money in them anymore but rewind 6 months and you could have sold that same screen on eBay for 50 gbp. This is a good example of when a niche becomes too competitive and saturated. It does happen and you might get caught up in it one day, that’s the nature of importing.

On the flip side there are things with better margins but they will either generate slower sales or require some additional marketing thus generating additional costs.

I know a guy who started a mini pit bike brand in the UK about 7 years ago, something similar to this ebay seller below.

bike

You wont sell thousands of bikes but, like the guy who I mentioned, if you get the marketing right, build a brand, sponsor a racing team and generate a real demand for your product you can turn a great profit on something like these bikes. As an example the bikes above will cost around 140 gbp from China, that’s a gross profit of 230 gbp per unit which is very nice if you can get the sales.

I would say most people reading this are likely looking for items like the coffee table. By that I don’t mean the actual coffee table I mean what it represents. It’s a product type with a proven sales history, moving in steady volumes with an acceptable margin.

I want you to look through this list I have made for you. Its a list of product ideas you could import from China that i have sourced and got pricing for. It will get your brain ticking and you can see if you can find an item like this you like the look of. I will try to update this list regularly, for now have a look here:

Import Ideas Page

Now how hard is it to jump on one of these items and make it work? Only one way to find out.

I don’t think you will get rich within a few months of importing but I would say that you could get pretty confortable after a year so set some realistic targets, expect to make some losses but most importantly keep focused and keep going.

I will say this though. If your sat reading this and have looked at these eBay items that someone somewhere is clearly making money on you have to ask yourself one question. What’s stopping you?

18 thoughts on “Choosing the best thing to import from China.

  1. A great post and some really useful information,

    I love the quip about Dave the chancer “His wife is not impressed”

    Wives are seldom impressed when we try to explain our latest cunning plan.

  2. Great post as always Daniel. Even though I deal in services, not physical products, this has given me a few important ideas to reflect on.

    And it’s a good reminder that, to be in business, you’ll need to learn to love sales!

  3. Hi Dan

    It would be great to know how you got into wholesale as a career. I’m guessing while you were at university you would be looking to get into architecture.?

    Great posts by the way.

    • Hi Joe,

      Thanks for the question.

      I remember my induction day at university. My course leader Jacky sat us down and gave a bit of a pep talk. At the end she said that if we had come to do this course in the hopes of making a lot of money that we should get up and leave because Architects no longer make a lot of money.

      If id have had the balls then that i have now i would have left.

      I had always been buying and selling things and started my first importing business during my second year at Uni.

      Once I had discovered you could import something worth 500 pounds for 80 pounds I was hooked, unfortunately the days of those kind of margins were short lived but were long enough to divert me well and truly away from any desires to be an architect.

      Thanks

      • Thanks for your reply.

        Just another quick question

        Do you think China’s economy in terms of buying wholesale is slowing down?. You have mentioned margins were easier to make a few years ago, do you think it might come to a point where there will be no financial sense to buy wholesale in China in a couple of decades and effectively another country would be the go to place.

        Thanks

        • Hi Joe,

          Yes it is definitely harder to get margins but thats not entirely down to rising costs in China.

          When i first started importing for instance the margins were good as not many people were into the importing thing the same way they are now, nearly everyone who has access to the internet these days thinks of themselves as an importer.

          Still a lot of money to be made if you can join the dots between the right product…………right supplier………..right outlet

          I am not sure if China will lose its “go to place” title entirely though it is starting to shift in certain sectors where the salary increases can’t be absorbed – low end clothing for instance.

          They have the infrastructure here, there developed for this kind of business, it will take other countries a long time to catch up in that respect.

          Thanks, some good questions.

    • Thanks Andrew,

      Yeah been a hectic year so have not had much time of blogging I’m afraid but I would like to try and get more done if I can.

      Honestly i don’t know how some of these other business bloggers fit time in to write articles, I have trouble fitting in the time to take a piss.

      Thanks

      Daniel

  4. Daniel, you’ve mentioned some important points, but from my own experience one of the biggest components to online success is having a reliable supplier in China that can be as enthusiastic as you are about the business.

    Far too often suppliers find bulk orders a perfect opportunity to ‘grab and dash’ by way of sending a much inferior model (or completely fleeing with your money), or declaring that THEIR supplier has increased the price and thus your profit margins dwindle down and then you pull it completely since its no longer feasible. This has happened to me enough times to give serious consideration in looking for UK suppliers and leave the whole sourcing headache, even it means I need to pay more.

    It’s much, much harder building an online business when you’re not in China as everything is built upon trust and reliability of the seller. If they screw up, well then so does your business.

    • Hi Jam,

      Thanks for the comment you raise a good point.

      I have heard many stories about suppliers building up a customer to a big order then doing the grab and dash you mention. Some suppliers here don’t really think long term and are not interested in building relationships for future business if a short term gain can be made. Not all suppliers here are like this but unfortunately a good deal are.

      Actually I went out for dinner last night with some friends and noticed something. We go to a turkish restaurant here quite often that is a popular place for Chinese suppliers to wine and dine prospective clients. The table next to me had 2 arabic guys with 1 Chinese girl and 1 Chinese guy. I realised that every time I come here there is a set up like this and they are always telling the same stories to the clients. Yes I do like to eavesdrop on other peoples business conversations, I am sorry. Quite funny hearing the same patter each time, they really know what to say to get what they want and i have heard it enough times to know when someone is being set up for a fall.

      I know some people doing business here who have Chinese partners who they have worked with for years and trust completely. I also know several people here who have had the same relationships but lost literally millions because of it. I myself have been burnt and I think life’s individual lessons forge our own views on matters like this. I know what my opinion is but that doesn’t mean its the right one but me moving thousands of miles across the world to physically do this job myself should give you some indication of how I feel about it.

      Thanks

      Daniel

  5. I really appreciate your straightforward approach, very informative and eye opening.

    Everyone’s situation is definitely different, and the answer isn’t on Google!

    • Thanks for the comment Luke.

      Your right people won’t find their dream import item by bashing away on google but the information that will guide them there is online all ready for them to find, I think they just have to look in the right places.

      Daniel

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