The first order is where most small importers lose money, and the loss usually happens before any freight is booked. Two numbers decide whether a product is a business or a hobby: the landed cost and the duty rate. Both take about a week to work out, and both are cheaper to fix on paper than in a warehouse.
Step 1: Write a spec and calculate the landed cost
Put one page together: what the product does, materials, dimensions, weight, finish, packaging, and how it will be sold. Then find the HS code — the six-digit code that sets your duty rate. A customs broker will usually confirm it for free. Getting it wrong gets expensive three months later, when the refund claim is your problem.
Then build the landed cost.
| Cost line | What goes in it | Typical share |
|---|---|---|
| Unit price (FOB) | Factory price plus delivery to the Chinese port | 50–65% |
| Freight | Sea LCL/FCL, air, or express | 8–20% |
| Insurance | 0.3–0.5% of CIF value | under 1% |
| Duty | Rate for your HS code, often 0–12% | 0–12% |
| Import VAT/GST | Usually recoverable if you are VAT-registered | 5–25% |
| Port, broker, trucking | Clearance, handling, delivery to your door | 3–8% |
| Inspection and compliance | Third-party inspection, testing, labels | 1–4% |
A rough rule for consumer goods: landed cost should sit at 25–35% of your retail price. If the numbers only work at 50%, the product is not ready. Import VAT is normally recoverable, so it hits cash flow rather than margin — but it is due before you sell anything, so model it.
Step 2: Check the rules before you buy
- Duty and trade measures. Check the tariff rate and any anti-dumping duty on your HS code.
- De minimis thresholds. In the US, the $800 Section 321 threshold has been under review and change; confirm the current rule before you rely on it. The EU and UK give commercial imports nothing comparable.
- Product rules. CE or UKCA for the EU and UK, FCC for US electronics, FDA for food-contact and cosmetics, CPSIA plus a Children's Product Certificate for kids' goods, REACH for EU chemicals.
- Labeling. Importer name and address, country of origin, required language, warnings. Ask for a photo of the retail label mock-up and approve it before mass production, not after.
Step 3: Find suppliers worth talking to
| Channel | Good for | Watch out for |
|---|---|---|
| Alibaba | First contact, wide choice, Trade Assurance | Trading companies presenting as factories |
| Made-in-China, Global Sources | Industrial and technical goods | Slower replies, older listings |
| 1688 | Lower prices, China's domestic market | Chinese-only, no export service, needs a local agent |
| Canton Fair and regional fairs | Meeting factories face to face | Travel cost — book meetings in advance |
| Referrals, LinkedIn | Suppliers someone already vetted | Small pool |
Filter before you message. On Alibaba, check years on the platform, transaction volume, response rate, and whether the business license name matches the store name. A trading company is not a bad choice — they handle small MOQs and mixed orders better than most factories — but you need to know which one you are talking to, because your price and your bargaining position differ.
Step 4: Verify the company before money moves
Ask for the business license (营业执照). It shows the full Chinese company name, unified social credit code, legal representative, registered capital, establishment date, registered address and business scope. Check three things:
- The business scope covers manufacturing or trading in your product category.
- The name on the license matches the proforma invoice and the bank account.
- The company appears on 企查查 (Qichacha) or 天眼查 (Tianyancha) without abnormal-operation flags or a stack of lawsuits.
Then get visual proof. A ten-minute video call walking through the workshop, machines running, someone holding the license, filters out a surprising number of "factories" that are really a desk and a WeChat account. Above roughly $10,000 in order value, a third-party factory audit at $300–$600 is usually worth it.
Walk away from these:
- Payment requested to a personal account instead of the company account.
- A price 30%+ below every other quote with no explanation.
- No video call, no license, no address.
- Pressure to pay off-platform or in crypto.
- An email mid-order saying the bank details changed. Confirm by phone with a contact you already had.
Step 5: Sample properly, then lock the spec
Pay for samples. Free samples are usually a hand-built best case, not what the production line will produce. Order from two or three suppliers if the product matters.
When you approve a sample, approve it in writing. Sign and date a spec sheet covering materials, dimensions, tolerances, colors as Pantone references, packaging, labeling and the acceptable defect level. Split the approved golden sample between you and the factory. If a test report is required, ask for the report number and check it with the lab directly — PDFs are easy to edit.
Step 6: Negotiate price, MOQ and payment terms
| Term | How it works | When it makes sense |
|---|---|---|
| 30/70 T/T | 30% deposit, 70% before shipment | Most common; hold the balance until inspection passes |
| Trade Assurance | Platform escrow with a dispute process | First orders with a new supplier |
| Letter of credit | Bank pays against documents | Orders above roughly $50,000 |
| Net 30/60 | Pay after delivery | Only after several clean orders |
Know which Incoterm you are being quoted. EXW means you arrange everything from the factory gate. FOB means the supplier delivers to the port and handles export clearance. CIF adds freight and insurance. DDP puts everything on the seller's side, which is convenient but hides what you actually paid in duty.
Step 7: Inspect before the balance leaves your account
The standard pattern is a pre-shipment inspection once all goods are packed, with the balance released after it passes. Use AQL sampling: AQL II with 2.5 major and 4.0 minor defects is a common starting point for consumer goods. The report should show cartons, labels, barcodes, quantity counts and every defect found, with photos.
Often skipped and often the problem: carton drop test, barcode scan test, condition of retail packaging, and whether the count in the master carton matches the packing list.
Step 8: Book freight and get the paperwork right
Sea LCL for 1–15 CBM, sea FCL once you pass roughly 15 CBM, air when the value per kilo is high or the launch date is fixed, express for samples and spares. Documents to have before the goods move: commercial invoice, packing list, bill of lading or air waybill, certificate of origin if a trade agreement applies, test reports and insurance certificate.
Keep the HS code identical across the invoice, the packing list and the customs declaration. A mismatch is the fastest way to a held shipment.
Step 9: Clear customs and land the goods
A customs broker files the entry, you pay duty and import VAT, then the forwarder delivers. Port charges, demurrage and chassis fees are easy to underestimate on a first shipment — ask for an all-in quote rather than a freight rate.
A realistic timeline for a first order
| Week | What happens |
|---|---|
| 1 | Spec, HS code, landed cost model |
| 2–3 | Supplier shortlist, license checks, samples ordered |
| 4–6 | Sample approval, spec signed, deposit paid |
| 6–10 | Production (add two weeks around Chinese New Year) |
| 10 | Pre-shipment inspection |
| 10–11 | Balance paid, freight booked |
| 11–14 | Sea freight to a US or EU port |
| 14–15 | Clearance and delivery |
Mistakes that cost small importers the most
- Paying a deposit before checking the license and the account name.
- Skipping inspection to save $300 on a $20,000 order.
- Treating the FOB price as the cost of the goods.
- Booking a full container on the first order.
- Leaving packaging and labeling until the goods are already packed.
- Letting the supplier pick the HS code.
- Having one supplier and no backup when the second order slips.
If you would rather not manage the language gap, the factory checks and the inspections from another timezone, Globesino acts as your local team in China for supplier sourcing, factory and pre-shipment inspection, and delivery to your door. Send us the product and your target price and we will tell you what is realistic.