Academy\Advanced Videos\Getting Your Goods Through Customs
Products must have Made in China stickers.
Labels can be placed by the manufacturer before shipping.
Otherwise customs will contact you to say the goods are prohibited.
Make sure the declaration of product is correct otherwise you can face fines and lose your goods. You also have to pay for the storage of goods when that happens.
Academy\Advanced Videos\Import From China
Email from a custom email. Not gmail or hotmail.
Appears more professional and will get you a better deal.
Specific email steps:
Get a quote for large order prices FIRST.
Then ask for Trail Orders SECOND.
Always do the trial orders.
Academy\Advanced Videos\Importing From China and Taking Advantage of Chinese Subsidies
Brenden has a house on a ridge that over looks the famous Australian beach!
China wants other countries money.
The Chinese government help their import/export industry by giving large rebates and bonuses.
Step 1: After you place the purchase order.
Step 2: Vendor will take the purchase order and proof of payment to their local government agency to apply for the rebate.
Step 3: They get the money. Largest percent amount mentioned was 17%. Said normal range was 13-17%.
17% of $2,000,000 USD == $340,000,000 USD.
Chinese government offer incentives for investing in China.
Tax breaks
Tax holidays
Low interest loans
Cheap freight
They offer extra incentives for high tech product manufacturing.
Find a manufacturer/vendor/company that is able to get rebates.
Mention that you know that they get these rebates from their government and the factory will beg to work for free.
Because to them, the rebate is a guaranteed payment!
Very Smart!!!
Insurance and Protection of your Goods with Brendan Elias and Wayne Parry
Interview is conducted with Wayne Parry.
www.FreightInsurance.com
Started career in 1970.
Straight from school to insurance company.
From insurance company to insurance broker house.
Started own business in 1992.
Why to Insure Goods from China?
Cover loss or damage of assets.
Losses do happen during transit.
Prudent if premiums are affordable.
Different Types of Insurance
Transit insurance, should be available globally.
Product liability insurance, cover damage or injury to others caused by your product.
Fire and burglary coverage, for warehousing the goods.
How Insurance is Calculated?
On what the product is.
On how the goods are packaged.
On where the goods are going.
On the value of the goods.
Premium Estimate
$100,000 machinery - $200 premium.
0.2% good average value.
Payment Requirements
Pay when insurance is arranged.
Insure them from the time they leave the warehouse.
Annual Coverage
Cover all insurance for the year.
One premium for the year.
Individual items don’t need to be insured.
Consequences of not having Insurance
Suffer the loss yourself.
Whole shipment can be lost in one instant.
Horror stories involve loss of life.
How to get the best Value for the Dollar
Sourcing.
Go to an experienced, secure broker.
Local broker for the experience.
How to Avoid Mistakes
Don’t leave out important information.
Be open and supply all information required.
Give accurate information, what goods are, how they’re packed, etc.
Making a Claim
Survey agents will be on the spot.
If all paperwork’s in order, no issues.
Supply all documentation for rapid return of claim settlement.
Final Advice
Know your goods.
Do your homework.
Academy/Advanced Videos/Warehousing Secrets
Use an outsourced contract warehouse to store the goods.
Freight is usually 40% to 60% cheaper with an outsource warehouse because they have more buying power behind them to get discounts.
Buying Power is an interesting concept.
All you have to do is email the warehouse each day for them to ship the goods to the customer for you.
You can setup the warehouse to contact the manufacturer to restock your goods when you run out.
Academy/Bonuses/Importing From China Q & A
Q: What is up with import tax, duties, and fees?
It depends on your country.
"First fees" are duties/tariffs TCIF.
Footwear and clothes have highest tariffs because China flooded the world with those products, tariffs on them can sometimes be 200%.
USA has high tariffs on imports to protect its local industry.
North America Free Trade Association (NAFTA).
Work around examples for tariffs:
USA has tariffs on candles, but not on just wax or just wicks.
When you actually import the goods, you pay for the tariffs on their arrival.
If you have good credit with your freight forwarder, you might be able to delay paying for 90 days. This could be useful.
Because of an international agreement plan, tariffs were lowered in 2010, and will be again in 2020, and again in 2030.
Q: How do you avoid buying poor quality proucts?
Do your duties on finding the right sources.
Search multiple factories for different prices.
Fly to china to meet with them.
Globalsources, Alibaba, Madeinchina are good websites.
Maybe - Make a list of different prices and remove the lowest 20%.
You get what you pay for.
Send an inspection team to the factory and inspect legitimacy of company.
When you establish local presence with factory, they wont mess with you.
Contract with sources to create "purchase orders" that have phases.
Set clauses in the contract that penalize the vendor everyday an order is late.
This will make the source speak up if they need more time.
Pay the vendor at the different checkpoints in the deal, like $30 over 30 days.
Setup 3 phases.
"Dont shoot the hostage" == Dont pay all at once.
Q: How can you enter a market with established competition?
Pick a niche.
Dont be a jack of all trades.
Pick a niche that is a 1/4th of an inch wide, but 8 miles deep.
You want a niche because you can keep the clients information for repeat purchasing leads.
Academy/Bonuses/Importing From China Q & A Part 2
Q: How can you enter a market with established competition? (Continued)
Brenden notes that the power is in the customers hands because of the cost to promote on source websites like Alibaba.
Use Telegraphic Transfer for money transfer.
Get the bank details from supplier like bank name, bank number, bank account, swift code for identifying foreign banks.
Make sure there is a record for the swift code.
When the transfer is sent, send supplier a photocopy of the tranfser receipt.
When you show you can be trusted by the vendor, prices will likely go down.
Warren Buffet has a net worth of $62,000,000,000, China exports $62,000,000,000 every week.
Academy\Copywriting Secrets\Copywriting Essentials For Your Import Business With Jesse F Part 1
Academy\Copywriting Secrets\Copywriting Essentials For Your Import Business With Jesse F Part 2
Academy\Cultural Differences & Exporting to China\Importing & Exporting With Amy Kwong & Brendan Elias Part 1
Use 2 hands when giving and receiving business cards.
If working with Chinese, have one side of the card in English and other side Chinese (Mandarin).
Use gold ink.
Be sure to have Chinese side facing up when handing over card.
Plan meetings months prior. Everyone likes being prepared. It is a custom in Chinese business tradition.
Simple bow rather then handshake.
If a handshake does take place, don't squeeze.
Bring a gift! In fact, you should always bring gifts anyway. Don't show up to places empty handed.
Socialize by going out for drinks or a meal before discussing business.
Don't discuss business at that time. Relationships come before business.
Don't mention deadlines. Patients is key when doing business in China.
Academy\Cultural Differences & Exporting to China\Importing & Exporting With Amy Kwong & Brendan Elias Part 2
Academy\Customs Agents, Brokers & Compliance\The Roll of Customs and Incoterms with Brendan Elias and Lance Scolar
Lance's Background
Began as Customs Broker.
Father was an Export Manager for a milk company.
Moved to a multi-national company, 3M, in customs section of purchasing department.
Next, worked for another American company, Baxter Health Care, in charge of Import/Export functions.
Learned a lot about international business because Baxter Health Care did business all over the world. South Pacific, New Zealand, Southeast Asia, etc.
Studied for and received management certificate.
Started doing courses for individuals through one of his companies.
Australian companies were taking business to Asia.
Some companies were not following his guidelines for quarantine.
One of his clients, Simon, started importing and then getting his own designs made in foreign countries like China.
Role of Customs
Variations in different countries.
In Australia, Customs and Border Protection Services, formerly known as Customs Service, has 3 functions.
Protection.
Protecting borders, imports/exports, terrorism, and drugs.
Collection.
Duties and taxes, revenue collections.
Facilitation.
Customs service, helping people do legitimate business.
They are there to help. Talk to them if you have any problems.
Most countries have list of prohibited items or items that need permits on their website.
Customs Broker
Business outside of government agency.
One of three ways to enter goods as an importer.
Outsourcing instead of importing on your own.
Must be licensed.
Brokerage must have individually licensed brokers.
Must pass courses, show understanding, and have experiance in a working environment.
Manages process for you.
Not expensive in proportion to cost of goods.
Could you do it yourself instead of outsourcing?
You would need to go through the process to get a digital certificate.
Import the same product time after time.
Remember that having a Customs Broker means you are getting experience.
Chemical areas are very complex for classifying tarrifs.
With a Customs Broker, they usually have expertise with particular areas of freight forwarding.
Customs Brokers are better able to help with classifying products to your benefit.
Case Study Horror Story
Small percentage have problems, but problems are really bad.
Client importing waste paper from New Zealand in 20 foot containers.
Changed to 40 foot containers.
Realized when it came off the wharf that it was too heavy for road restrictions.
Had to transfer all the waste paper to two 20 foot containers.
Huge cleaning bill from waste paper flying everywhere.
Problems with quarantine documents with wooden products or packaging. You have to have right fumigation certificate.
Have to have the right certificate of orgin.
Academy\Customs Agents, Brokers & Compliance\Steve and Brendan Customs
Peter Brukener - CEO - Powerhouse Logistics (phl.net.au)
Steven Foster - Customs Broker (30 years experience) - Powerhouse Logistics (phl.net.au)
Customs protect a country from the illegal transportation of products and people. They administer the series of acts that prevent such cargo from entering a country.
Customs Agent/Broker/Officer are the same.
Customs Brokers research the product to see what regulations may effect it, and try to find ways to reduce the tariffs on shipments. The goal of a customs broker is to do everything possible to make a shipment duty free.
"The assumption is that it should be duty free"
The difference between an expert and novice Customs Broker is details.
In Australia, Customs could penalize up to 200% (months or years later) if proper duties are not correctly paid.
Customs Broker/Agents are licensed by Customs and are REQUIRED to report anyone they suspect is doing something illegal.
Sales Tax is paid on arrival of goods, or you can submit a Business Activity Statement monthly (which must be done electronically) if you do not have any other tax issues.
You get 3 (free) days to pick up a container before customs moves it to demarriage and it becomes very expensive quickly.
Academy\Shipping & Freight Forwarding\Brendan and Tony Part 1
Peter Brueckner - Powerhouse Logistics - CEO.
43 years in shipping and freight fowarding industry.
Started Apprentice in Austria.
Tony Daniels - Powerhouse Logistics - Director.
33 years in shipping and freight industry.
Found job listing one day in paper for Custom Brokerage.
4 or 5 years in freight fowarding Sales.
Joined Peter in starting Powerhouse Logistics in 1990.
About 10 billion tons of cargo shipped every year.
4 billion tons of that is carried on container vessels.
Australia spends about 10 billion dollars a year on import/export shipping alone.
Employees 30,000 people Australia wide.
Around 5,000 container ships traveling the sea at any moment.
Air and Boat are the main ways are transported.
Academy\Shpping & Freight Forwarding\Brendan and Tony Part 2
Using a Sourcing Agent with Lindy Chen and Brendan Elias
Soucring agents work differently.
Depends on what sourcing agent defines themselves through.
The amount of work and expertise required to source from China is often underestimated.
If an agent can demonstrate ability to manage a project end-to-end, it will save time coordinating agents and inspection of companies, critical orders, customs.
A sourcing agent can really cover a lot of aspects your importing projects.
May be someone who finds product, but can also be more detailed in terms of auditing and inspecting factories, production management, and deliver from China to wherever you are.
Some sourcing agents only offer some services, and some offer all the services from start to finish.
They all really work quite differently.
Advantages of using sourcing agent vs. doing it yourself.
Doing it yourself requires a lot of different tasks.
There is a significant language barrier.
Also significant cultural differences.
Import/export expertise. Importing business is challenging.
Can be very difficult without experience in that area.
Knowledge of local market and supplier.
Knowing whether it’s a trading company or manufacturer based on knowledge of address.
Choosing the right agent will mean the difference between success and failure of an import project.
A sourcing agent knows the questions to ask; beginning importer does not, nor how to ask them.
Small to medium companies can use a sourcing agent to good benefit.
Do large companies (K-Mart, Wal-Mart, Target) use sourcing agents?
Yes. They all have their own and use a sourcing agent.
Even if people know how to go about importing process, there are still benefits from using someone with more expertise and knowledge.
It’s like when you’re using tax agent or an accountant. You’re not trying to do everything yourself.
Large and small companies benefit from using a sourcing agent.
Is it an absolute necessity to speak Chinese to deal with Chinese factories?
It would be very beneficial. It is not necessarily a must, but certainly 100% beneficial.
There is more of a willingness to do business if you speak Chinese because of cultural similarities.
By speaking the same language, also having knowledge of the local culture, ideology, and terms can create an instant understanding of the situation.
Regarding trading companies and factories, what are some techniques to determine if you’re dealing with a direct source or a trading company?
Agents can very easily identify these by address.
Most factories are located in remote zones.
Trading companies are normally in high-rise building in the city.
By asking directly, they will tell you what they are. But a factory may also have a trading arm.
This leads to further questions regarding how many employees do you have, what’s the relationship, etc.
You can also ask for their business license.
By reading the business license, you can see if the name, address and person match.
This is the research importing agents usually do.
What are the specific tasks and services of a sourcing agent that go from start to finish?
Pay as you go system. You choose a particular scope of work and pay for that service.
Research and tender. Finding the right supplier, contact the supplier, summarize the supplier who’s interested in that project, do quote comparison, analysis, and really get to see in black and white how the project will turn out.
If project is promising, feasible, and what the client desired, the next step is to do the sampling process.
A sourcing agent is not just a go between. You really need to have capacity to guide the client in the right way to help achieve the final goal, which is to be globally competitive and globally prepared.
The second part of that is really to do the sampling stage and then to identify and find
the right supplier. Whether they are cooperative with the client or not, and whether they are delivering as expected.
The sampling process includes drafting the purchase order and negotiating on the client’s behalf.
To make sure the client’s interests are protected (i.e., price increases, terms,
conditions, terms of payment, quality control).
All of this has already been negotiated in the purchase order package.
Monitor the action and have the supplier fulfill what they have promised in the purchase order, during production and delivery management, coordinating with the shipping and freight-forwarding company.
Also to clear customs and delivery of the product to the customer’s door.
There is a lot of work involved that beginners do not understand.
It is very extensive and very detailed work involved in the whole process.
Each project is totally different, and some suppliers need constant micro-management.
You cannot miss one step. If one party does not answer, later it will backfire on you.
Does process get easier when re-ordering from established suppliers?
Dealing with Chinese suppliers need constant micro-management.
Even if the sixth order is exactly the way you wanted, this doesn’t guarantee the seventh order will be the way you expected again.
For instance, if a salesperson changes jobs, your order may be lost. Or if the factory changed location from one to another, your order would be different.
People change jobs quite often. So we always make sure all the documentation in your hands is complete.
If the supplier changes staff, you have to be extremely patient dealing with them and lay
out the order and requirement specifications again.
Also, all of the documentation has to be translated into Chinese.
Established suppliers can also change from time-to-time. So you really have to ask.
Also, when these kinds of things happen, when order is received it might have a different quote in it. So then you have to find a solution.
If you’re located in America, Australia or New Zealand, why is it important to actually have a physical presence on the ground in China?
We highly recommend having a person in China, because you can actually see the product yourself and can verify if the suppliers are actually producing what they say they are.
Also by having a person in China will mean issues can be sorted much quicker, and they can act as your “Johnny on the Spot” for any issues.
Having a person in China also means the relationship is a bit better with the factories.
Often you must be very diplomatic when dealing with a Chinese supplier.
Communicating with Chinese can also be quite challenging.
Chinese are afraid of losing face.
Someone on the ground in China can communicate your intentions as well as maintain the good relationship.
What are the consequences of making a mistake and making someone lose face?
That is the worst thing that can happen to you. If you insult someone, they don’t want to do business with you.
Even if you’re paying the money, the supplier will say no.
Some of our clients are really demanding and quite rude to a certain degree. Letters can be very intrusive.
Agents often have to soften clients’ tone, and suppliers may say they don’t want to deal with that client.
So if this happens, all prior efforts and work are gone, and you have to start all over again.
How do you balance the line between being firm and getting what you want, and not being rude?
The strategy we use is called “Sandwich Talk.”
Is a great way to build a relationship.
First, we always talk about the commitment. We always talk about the commitment to the client. This is to make the client preferred and globally competitive.
Also, our commitment to suppliers is to have them make a profit and create a fantastic relationship with the customer.
Therefore, once we set up the commitment, then we deal with the issue. For instance, if the quality hasn’t been met, that means the client cannot sell the product properly and they cannot reorder. This would impact the supplier.
We always create a win-win situation.
Sandwich Talking lays out the commitment first, then addresses the issue, and then creates the future. By you solving this, it will create opportunity for the client to re-order the products much faster, etc.
In that way, the supplier sees the big picture, where they fit in, and they are much more inclined to agree with you to make it happen much faster.
We get the supplier to see the long-term benefit vs. the short-term benefit.
You also get them involved in the conversation and they see they are in same bus together.
What is your strategy for negotiating the
best price with Chinese factories?
One of the strongest negotiation techniques a supplier can use is to simply say no.
The ability to distinguish a real no from a no used as a negotiation technique is vitally important.
Shift focus. Try to shift focus onto another item of value. For instance, negotiate a longer warranty period, or ask for some free products or accessories, or get an agreement on pricing for a longer period of time. Maybe a downward price production cost, or better lead time, or seek great discount on related goods or services.
Do the math. Set the emotion aside and work out suppliers through the different problems you both face.
Develop a “should cost” model to determine if there is room for additional cost compression.
Benchmark the offer you receive against the published data and from other suppliers or a backup plan.
Also the analysis will help you know how to lower the cost, and have the supplier really see you are sincere.
Paint the picture. Sometimes the suppliers need help understanding the implications of not reaching the agreement.
Explain the importance of your business, describe what your business may look like in two or three years time.
Then you can ask how this future would help the salesperson on their performance reviews and career, compensation, etc.
Change the player. For instance, you can increase the involvement of a higher level supplier representative in the negotiations; or sometimes you may say I’m not the boss, and I need to ask my boss, and then you come back with another player.
However, although this one may seem elementary, many negotiators mess this up. So you really need to know how to use this.
The trick is to find the highest level executive who would experience the greatest dependence on the loss of your business.
What about the strategy beginners use to “order many, many, many containers”, even if intention is to order a minimal quantity?
That’s suicide.
You can exaggerate one or two times, but if you do it constantly, the attitude of the supplier will dramatically change.
It will be much more difficult when you start sampling process and negotiations.
Don’t recommend this strategy at all.
How do you get a minimum order quantity (MOQ), but still get a good price?
This will be tricky. There are some suppliers who will supply small MOQs.
However, those kinds of suppliers are not normally registered with Alibaba.
Neither do they write their web site in English.
To buy you have to search on Chinese web sites, and you can’t speak English to them.
Therefore, you have to use a sourcing agent.
Sourcing agent would charge fee.
If you can’t get what you want, it is sometimes better not to import from China.
You have to know where to stop.
Would be helpful to invest in resources or take a seminar to educate yourself before you proceed further.
How do you ensure a factory is reliable and trustworthy?
This is the core of the whole sourcing process.
No one can guarantee 100%.
In China Direct we find the manufacturers who are trustworthy and reliable the diplomatic way.
Our first step to research and investigate many suppliers, from 30 suppliers down to probably only three.
After quote comparisons, cost analyses, and from the sort list of supplier we start to see which suppliers have the track record for reliability and their previous dealings with other clients.
Through sampling stage we start to see the supplier actually having the willingness and also the capacity to follow instructions. They may be good for other companies, but not you.
The sampling stage is the real opportunity for you to see if they would be reliable on your project.
The process of negotiation. This is where you start to see if they are willing to follow quality control.
Whether they are willing to address that or not.
Whether they are able to do the
packaging you required or not.
All of these points show you if they are reliable and trustworthy or not.
We recommend our clients not use a supplier if they return the quote with key issues missing.Such as quality control points.
This shows that a supplier will be difficult to deal with from the start.
The whole sourcing process is linked together to answer that question.
A lot of small things, which singularly may not be fatal, but when you have enough of them together, it can lead you to stay away from a factory.
People are exited to get into business and lose sight of these mistakes that are glaring.
How do you stop people who are so excited to make the deal to be more careful?
We explain to our customers the whole process and the whole sourcing project from a holistic point of view.
Regardless, whether it is a small project or large project, it has to go through the same steps to produce the steps you want.
What you really want is the consistency of the product. Therefore, you want the supplier who will achieve the best results you want, which is to make a profit and save money.
You have to follow the system to produce the results.
What are some tactics or strategies you can use to ensure you get a good quality product?
We start with the sample making agreement.
The sampling process is a great way to establish the quality control procedure. When the product arrives and you find quality issues, it’s already too late.
You really have to start with sampling. We have a supplier self-assessment tool. Our client lists all the criteria and what needs to be done, such as workmanship, appearance, packaging, functionality, etc. This produces a quality control document.
The quality control document is used as the criteria to check the sample.
In purchase order negotiations, you have all the quality control procedures in place.
There is also an inspection criterion.
You need to specify to the supplier what the quality control mechanisms they are going to put into place and have them agree with you with the Acceptable Quality Level (AQL) percentage.
Once that is in place and once the production is complete, you really need to have an on-site inspection. Highly recommend this to inspect the product before it leaves China.
If you have those elements of the quality control in place, the chance of getting a quality product is much higher.
The on-site inspection is scientific, and you do not need to go through every single piece.
We have AQL, which is standard. It depends on the AQL you have agreed on.
A lot size may be 1,000 units, and then you need to choose what would be the sample size. Then you would decide how many defects.
There are major defects and minor defects.
How many of each will be allowed?
If that level is exceeded, the whole batch will be rejected.
If the factory makes a mistake and has major defects, we will do an analysis. Then we will list the different options, and then we will negotiate with the factory to see what would be fair.
When the factory makes a mistake, there is no general rule that applies to all. It depends on the situation.
What is your legal recourse if goods are not up to your standard and supplier is not cooperative?
It’s very hard.
You can go through arbitration.
Also you can use the legal system in China to protect you.
It takes a lot of effort and energy.
Prevention is much better than waiting until something happens.
Using a sourcing agent in stage 1, stage 2, research, sampling process, purchase order negotiations are the critical parts to minimize the risk to avoid that happening.
Do you have any final words of wisdom from an experienced importer and sourcing agent for absolute beginners looking to import?
Patience is the key in dealing with Chinese suppliers.
The commitment to success.
Always be willing to learn from others and to listen to what other people say.
Be prepared to understand more.
Having patience, acceptance, and willingness to learn from others will gain you much more experience.
Brenden started his first operation with his mate Tristan in college because money was difficult.
He bought 100 DVD Players and sold them one by one at markup on ebay, his ROI was double the princple.
Most of Brenden's business is done on ebay.com.au.
Newsletter and tips starting selling on ebay at homesuccess.com.au.
Book: Import from china revealed - Brendon Elias
At age 22 Brenden was earning $250,000 a year.
Foundations Online Course\Video 2
Work on projects that pay you multiple times rather than swapping time for dollars.
This guy sets goals, he knows about Earl Nightengale's "The Strangest Secret".
You can have meals paid by running in charity events with sponsorship from restaurants.
Foundations Online Course\Video 3
Total Price
Annual
Monthly
Week
Daily
Hourly
Minute
Second
House
$200,000,000
$140,000
$10,000
$2,500
$360
$15
$0.25
$0.004
Yacht
$200,000
$19,000
$1,600
$400
$60
$2.50
$0.04
$0.0006
Car
$150,000
$30,000
$2,500
$428
$100
$4.16
$0.06
$0.001
Food
$35,000 /yr
$35,000
$8,750
$1,250
$175
$7.29
$0.12
$0.002
Holidays
$30,000 /yr
$30,000
$3,000
$750
$110
$4.58
$0.07
$0.001
Maid
$50,000 /yr
$50,000
$4,000
$1,000
$142
$5.91
$0.09
$0.001
School
$20,000 /yr
$20,000
$1,666
$416
$60
$2.50
$0.04
$0.0006
Total:
-
$324,000
$25,000
$6,000
$900
$42
$0.67
$0.01
Save 10%:
-
GOAL:
-
Hire a financial planner.
Get paid to travel. Tax write off for business trips.
To maintain this lifestyle is ~$1000/day.
How many goods need to be sold at __% profit each to earn $1000/day.
Brendens father imported Donkey Kong Arcade into Australia and was his mentor.
Brenden was almost a Lawyer.
He studied at Political Sciences. 2 or 3 years into college he was needing money.
His brother was a Lawyer, named Jason. He told him that he hated his job no matter how much money he made.
His brother worked for Baker & McKenzie.
His brother is 10 yrs older and more disciplined.
Brenden became an accidental millionaire when he discovered eBay to buy an obsecure DVD.
He noticed the photos and descriptions of listed items were terrible quality, so he bought items and resold them for a markup with better images/description.
Just from doing that, he became a top eBay Power Seller with +10,000 feedback.
When driving drunk became illegal in the AU, he started importing Breathalyzers when the demand started. He bought each breathalyzer for $5 or 2 for $15, earning ~200% profit.
His average day would be him driving to post office boxs with sacks of packages in his car (because he would fill multiple boxs).
When he was done, he would drive to the beach for the day, with more than enough money for the week.
He was dependent on his vendors to order and receive products from their sources first. Then he could order and receive his inventory, which cost time.
Cut out the middle man!
Brenden went to China on his father's advice.
Beijing to study Chinese Contract law.
Guangzhou
Hong Kong
Donguang City
Nanjing
Shanghai
Shenzhen
Syuoio
Xian
Yiwu + More
Visited factories, suppliers, trade events, trade shows, establishments, etc.
His father asked him why doesnt he import bulky items, he was importing by air shipping only at the time.
He eventually wanted to import pocket motorbikes and bought his first 20 foot shipping container. Then quickly bought a 40 foot container. 160 pockets fit in one container.
Brenden would use his parents garage to store his products until his inventory took too much space. His father recommended he use a third party warehouse.
Foundations Online Course\Video 4
Third party warehouses are shared with other clients.
Sometimes provide an office space :D
Third party warehousing allow you to avoid the overhead cost:
Rent.
Occupational health and safety.
Employees.
Equipment like forklifts.
Pass savings on to customer and gain advantage on competition.
Brenden hired a part time worker to handle postage on Monday's and Wednesday.
Enables a system where invoices are emailed to the warehouse and the shipment is dispatched that afternoon.
Price of shipping is discounted since warehouse arranges deal with postal service because they have more buying power.
Brenden finished his law degree because he promised his mother. Was earning more then peers who were law firm partners 10 years out.
Brenden shares thoughts on schools and universities conditioning people to become a "hard working employee" that trade time for dollars.
Hours Spent Communting
1 Work Day
1 Week (5 Days)
1 Month (4 Weeks)
1 Year (48 Weeks)
2 Years
3 Years
4 Years
5 Years
1.5
That is days a year spent just going to work! days for 2 years, days for 3 years, days for 4 years, days for 5 years.
Brenden recommends making your own brand name to put on products. His was called "Samurai".
Brenden imported Electric Scooters.
He would ride one to university and on the way home the battery would run out.
He got better batteries for only $4 extra per scooter on the next batch.
Brenden wanted to sell quadbikes because his customers said they want to get their kids a pocket bike, but they were too dangerous with only 2 wheels.
He contacted the factory and asked for quadbikes, but they said "sorry, no, can't do it".
Then he said "you know how the motorcycles have 2 years, could you maybe add 2 more wheels" and the factory said "of course, that would be really easy".
In 2005 Brenden sold ~12,000 Pocket Bikes. He imported 2 or 3 shipping containers per month.
Form a product niche that is a 1/4 inch wide and 8 miles deep.
Sell around 10 similar products.
Use customer feedback to decide new products to sell.
Brenden's niche was recreational vehicles.
Items that will be banned in near future sell very well. Get in before Governemnt bans.
The perk of using third party logistic services is that you can take advantage of the discounted freight rates available when you ship large volumes to start selling wholesale.
This promotes you in the supply chain! ^_^
When the savings on shipping offered by a third party warehouseis greater than the premium charged by a third party warehouse, it pays for itself!
Foundations Online Course\Video 5
Sales Revenue November 21-27th, 2005 $67,420
Sales between $60,000 - $90,000 a week. That's $3,000,000 to $5,000,000 a year!
Pack of batteries is less than a dollar in China.
Brenden became a speaker for Australian Government Import/Export Body.
Hong Kong Trade and Development Council are supporters and sponsors of China Import Formula presentations because they promote doing business with China.
The Australian Financial Review made an article about Brenden:
Brenden's mistakes:
Ordered 7 containers of Faulty Goods.
Ordered items not as described,
Ordered stock that didn't work.
Non-delivery of goods.
Goods seized by Customs.
Brenden lost $90,000 in goods because his warehouse in China caught fire. The insurance to cover that would have cost only $380.
Difference between stock that didnt work and broken stock is broken stock used to work, but stopped.
When goods are seized by Customs, they put them in a Customs bond.
A license from the government is needed to import vehicles.
Foundations Online Course\Video 6
China is Australia's largest importer AND exporter partner.
In 2009 China surpassed Japan to become Australia's largest ezport market, with total merchandise exports to China valued at $42,400,000,000. An increase of 31.2% over the previous year.
China is also Australia's largest source of imports, with China's total merchandise exports valued at $35,800,000,000 in 2009, an increase of 1.5% on the previous year. Major imports from China include clothing, communication equipment, computers, prams, toys, games and sporting goods, furniture, and televisions.
When dealing with China, the goods price will be based in US Dollar. Especially raw materials.
Hire an Accountant.
Put all receipts in a box to give to Accountant.
Collect samples.
Leverage Time:
Grow into Importing career, not go into it.
Am I making more money from my current job or importing?
Am I making more money than my current job?
Visit Forbidden City and Great Wall of China.
Jetstar Airline.
Importing allows you to use tax strategies reserved for the rich.
Foundations Online Course\Video 7
Where to source products:
Aliexpress.com
Alibaba.com
Tradekey.com
Madeinchina.com
Globalsources.com
Only need $3,000 to $5,000 to start importing.
Need a phone and laptop.
Foundations Online Course\Video 8
Choose your product:
Are you "passionate" about it?
Are you a consumer of this product?
Does it support the need on the market?
Is it an accessory to something already popular?
Does it have a hign ticket price?
Can you sell a lot of them?
Does it belong to your niche?
Can you pick this one niche and concentrate on it?
Foundations Online Course\Video 9
You can not import brand name products. Anybody who says otherwise is lying.
By adding a brand to products, your are adding value.
Brenden recommends creating different brands for products, even if they are same product and quality. This can serve different market segments by offering them at different prices.
The value of your company increases when it owns brands.
It is way easier to sell products that have a brand.
Cost a little more.
The relationship with your company and a factory becomes an asset that can be sold.
Factories make equipment to build your orders Original Equipment Manufacturer (OEM).
Register Trademarks and Copyrights for brand names/logos, product names/logos, etc.
Lazy way to pick logo: Go out and ask 100 or 200 people which one of four graphics which is better.
EXIT STRATEGY
Brenden says the Chinese are the most honest to do business with.
How Factories Rip You Off
Take advantage of your lack of information.
Take the money and figure it out later.
Rope you in with cheap prices and give you cheaper materials.
Will keep your deposit and complain of production problems which never get resolved.
Solution: Audit the factory for variables. Like more than 20% capacity.
Behavior to Watch For:
Willing to do anything to get business.
Dropping prices to match competitors.
If you ask to visit company and they are too busy.
Ask for payment via Western Union.
Refuse use of an escrow service.
Foundations Online Course\Video 10
If you can't complete a order(s). GIVE THE MONEY BACK PROMPTLY.
Importance of Sample Testing:
"Hi Brenden,
I have been watching your videos with great appreciation. They have helped me heaps already. I have never imported anything.
A small group here in Townsville have got together and formed a company and my part is importing stainless steel water bottles from China.
I have found a particular bottle I believe fits us perfectly.
My concern is that I received three samples, and all three leaked when lying on their side.
The plain stainless steel one was the least, but still a leak. I contacted the company in China and he assured me that they were old stock and he guarantees the new ones do not leak.
I found another company with the same bottles, my concern here is they assured me they do not leak and would send samples. But, they are a bit more difficult to communicate with. I know I need to go over there, however I do not know enough.
I would like to know more about your coaching program. Unfortunately, I am unable to attend your seminar next week. Any assistance in this area would be greatly appreciated."
Always make sure the sample is acceptable quality. Don't accept anything less.
Don't write long essays. Keep it "Point 1, Point 2, Point 3".
Hire professional translation of emails.
Give money to anti-child prostitution charity by selling a cheeky monkey puppet.
Brenden gives free key chains with the his brand logo to customers who spend more than $100.
The factory produced 4 generations incorrectly to make get the products right. Thats okay!
Size was incorrect, logo spelt wrong, logo was inverted.
If sample quality is not perfect, tell the factory.
Don't order until sample is correct, otherwise why would they do anything after you pay them.
Don't be aggressive about paying for things because people need to make their own money. The system will still produce large profit margins.
Have business cards with one side English, and the other Chinese!
Makes you stand out and shows you are serious about doing business.
When vendor takes you serious, prices go down.
Attach to signiture of emails:
Foundations Online Course\Video 11
When relationship with factory is strong, ask about their other clients orders quantities and prices. Ask to merge the production runs and offer to pay little more to gain profit margin.
"Standing on the shoulders of gaints."
Called piggy backing.
Go to China and meet face to face.
Get drunk with the factory owners and sing Karaoke to get better price.
The day after a Chinese national holiday, everybody dresses casually.
Hire a personal assistant to attend meeting with factory and be a guide on trip to China.
Thank everybody for meeting with you.
Exchange business cards with 2 hands.
Appreciate both sides of the other persons business card.
Respectfully and carefully put other persons business card in card holder.
Carefully put card holder in pocket.
Emphasize that market is competitive and customers are always seeking lowest price.
Say that your customers seek low price but large volume of product.
Mention you have samples from competitors.
Foundations Online Course\Video 12
The customer pays for shipping.
Shipping details are important because the price quotes given by a vendor are affected.
Have the vendor send photos before paying for shipping.
Instead of sending samples oversea for inspection in home country, have the vendor send them to an inspection service in their domestic country. Save LOTS of money on shipping.
Cool Tip: Fill unused space in the shipping container with other products or samples.
Meet other importers and consolidate freight space together!
Make a list of things to inspect for the product before doing anything.
Actually stop and write the list out so you can check it off later.
Customs broker will help with standards, regulations and requirements.
Show the factory photos of a video camera that you give to the inspection team so they know they are watched.
Goods can only be shipped by air or sea.
Don't pay before inspection of product quality!
Foundations Online Course\Video 13
Item
Landed Cost
Item Cost
Freight Cost
Clearing
Warehouse Fee
Total
GSM-07
$98.64
$8.37
$2.68
$9.57
$119.26
GSM05 Samurai
$120.56
$9.16
$2.90
$9.57
$142.19
GSM05 Diablo
$120.56
$9.16
$2.90
$9.57
$142.19
GSD01
$147.96
$11.18
$5.07
$9.57
$173.78
GSM-XXX
$164.40
$8.27
$4.24
$9.57
$186.48
ATV02
$178.10
$17.82
$4.24
$10.83
$210.99
ATV01
$253.45
$21.59
$5.07
$11.93
$292.04
GSM07 6 Pack
$591.84
$50.22
$16.08
$41.91
$700.05
GSM05 6 Bikes
$723.36
$54.96
$17.40
$41.91
$837.63
Australia Webinar
This contract template for factories cost $40,000 AUD to draft:
Here is the formula for working out the cost for importing a product into the US.
This formula is just an example; please keep in mind that the duty will vary, depending on the product.
Your freight forwarder or the Customs Broker should tell you what duty and sales tax is for your particular item.
Let’s say that you are importing goods to the value of US $1,000.
The exchange rate for the Chinese RMB against the US dollar is 0.150.
Next divide US $1,000 / 0.150 = 6666.66 RMB.
Duty is at 10% you take 10% of 6666.66 RMB = 666.66 RMB
To work out the sales tax value you have to add the duty and uplift it by 20%:
6666.66 + 666.66 = 7333.32
20% of 7333.32 = 1466.664 RMB
7333.32 + 1466.66 = 8799.98 RMB
Sales Tax: 21% of 8799.98 = 1847.99 RMB
Customs brokers are private individuals, partnerships, associations or corporations licensed, regulated and empowered by U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting Federal requirements governing imports and exports.
Brokers must have expertise in the entry procedures, admissibility requirements, classification, valuation, and the rates of duty and applicable taxes and fees for imported merchandise.
There are approximately 11,000 active licensed Customs brokers in the United States.
Corporations, partnerships and associations must have a broker license to transact Customs business. Each of these businesses must have at least one individually licensed officer, partner or associate to qualify the company's license. Failure to have a qualifying officer or member (of a partnership) for more than 120 days will result in the revocation of the broker license.
How do I become a Customs broker?
First, you must pass the Customs Broker License Examination.
Second, you must submit a broker license application with appropriate fees.
Third, your application must be approved by CBP.
The Customs Broker License Examination
The Customs Broker License Examination is an open book test with 80 multiple-choice questions based on designated editions of:
The Harmonized Tariff Schedule of the United States (HTSUS).
Title 19, Code of Federal Regulations.
Specified Customs Directives.
Customs and Trade Automated Interface Requirements document (CATAIR).
You have four and one half hours to complete the examination.
This examination is delivered at contracted test sites nationwide.
Effective October 25, 2017, exams occur on the fourth Wednesday in April and the fourth Wednesday in October.
If that Wednesday is a religious holiday, the examination will be given the following Thursday.
CBP must receive the examination registration application and $390 fee at least 30 days in advance of the examination.
Each applicant is responsible for bringing proof of registration, a picture identification, and the recommended reference materials to the examination.
Academy\Copywriting Secrets\Copywriting Essentials For Your Import Business With Jesse F Part 2
