There are many guides like this around on TWF but I thought I would share my
experiences in the hopes that someone would find them useful.

Our family has in one way or another been importing toys, stationery and novelty goods
since 1912 when my other halfs great grandfather started his company from a small
warehouse in London. He started by importing toys from the Eastern Block then from
Japan (wind up tin toys) after the second world war, Hong Kong from about the 1950’s
onwards and then from China from the 1970’s onwards. Things have changed a lot
from the early days of getting the Trans Siberian Railway to the East. They used to travel
for a month, buy for a month then spend a month coming home.
I digress!!
We have travelled many times to China (about 3-4 times a year) and find that doing
business face to face is by far the most practical approach. I understand that many
people on this forum are just starting out and would not have the disposable capital for
such a trip but for anyone that is starting to become successful and thinking of going
over there I will try and lay out the pros and cons of dealing direct.
Firstly – where do I go and how do I get there?

By far the best place to start is with the Canton Fair in Guangzhou - http://
www.cantonfair.org.cn which runs in April and October. The best way to get there is by
flying into Hong Kong either direct or indirect (a short stop over in Dubai is usually
cheapest) an economy ticket should set you back around £395. Once in Hong Kong
there are a variety of ways of making it up to Guangzhou but I find that the easiest and
cheapest way is by train, all trains run from Hung Hom station in Kowloon and arrive at
Guangzhou East station in Guangzhou, tickets are around $190HK one way.
What paper work do I need?



You will first and foremost need a Chinese Visa which you obtain through a Chinese
embassy here in the UK - http://www.chinese-embassy.org.uk/eng/lsyw/chivisa/ . You
will need a Letter of invitation from a company or institution in China or Visa
Notification Form issued by an authorized unit in China (Visa notification refers to the
form of visa notification issued by the Chinese government departments, companies and
social organizations authorized by the Chinese Foreign Ministry. For detailed information,
you can consult the foreign affairs office of the province, autonomous region or
municipality directly under the Central Government where your host is located ie
Guangzhou. You can also apply via the Canton Fair website. You will also need to
register for the fair, again can be done through the website.
What to expect at the show

The show is HUGE and covers just about every sector of product that you can think of.
The show is made up of booths each representing a factory, trading company or agent.
It is impossible to gauge the size of the company just by their booth, don’t judge a book
by its cover, some of the smallest booths are inhabited by the largest companies. A few
years ago we stopped at a very small booth just showing a handful of products, we now
spend around $1.5 million a year with them!!
Take your time and wander around for the first day and identify the useful looking
booths and make a note of them to come back to. There is no point spending hours at
the first interesting company you come across only to find the same thing 50 meters
away but 20% cheaper.

Once you have identified the companies you wish to talk to then go back on day two
and establish the following information .....
1. Are they a factory, broker or agent?
2. What port do they ship from? (if you are buying lots of products try to group them in
the same area, it is then easier to consolidate)
3. How long have they been in business?
4. What are their MOQ’s like?
5. What are their prices like?

Once you have found someone you are happy with you can either try and do a deal
there and then but to be honest it is very difficult as there are hundreds of people
around and not everyone has our standard of British manners. People will interrupt you
all the time and butt in, it really pees me off and many a time I have shouted at rude
people!! It is better to take their contact details and do the negotiations by email once
you are home. I can’t guarantee that all companies at the show are legit, you will need
to research them carefully but to be honest the Canton Fair is VERY expensive to exhibit
at and this tends to discourage most if not all scammers.

For people who are starting out I would suggest going through an agent to begin with,
you will have to pay them 5% but they take all the hassle out of doing the transaction.
They sort all the paperwork, arrange freight to the shipment port, consolidate with other
peoples goods if you are buying in less than container loads. This is especially useful if
you are buying a large spread of products. They can also be used to inspect and audit
goods before they leave China just to check that there are no ‘surprises’.

Your other option (if you have time) is to arrange with sellers at the show to visit their
showrooms after the show, depending on where they are, remember China is huge.
Sitting in a nice air conditioned office is a much better way to conduct business.
As a guide here are the main production cities – Shenzhen, Shantou, Ningbo (mainly
wooden items), Shanghai, Xiamen and Fujian.

The next step
Once you have established a supplier or group of suppliers you need to go through the
red tape......
1. How do I get the goods to my door? – Use a freight forwarder, someone like Cedar
Forwarding to handle all your paperwork – shipping costs, freight transport, import duty
etc. They will organise everything for you. My advise would be to use sea freight as it is
much cheaper than air freight.
2. Does the item conform to EU directives and will it need testing? – this is a real
minefield. I only really know about my area of trade – toys but most products will have
some kind of regulations attached to it. If you are in any doubt get in touch with a test
house who will be able to guide you better. The Northern Test House in Leicester are
very good - http://nthleicester.com/
3. Make sure the agent/factory know how to label your goods. It is LAW that all
imported goods into the UK carry the importers details – company name and postcode
so that if there is ever a problem with the item then it can be traced back to you. If you
do not do this you are breaking the law  also check to see if it require a CE mark or
any other safety warning.
4. If the item is electrical then you must sign up and pay for WEEE membership, again if
you don’t then expect fines and a huge head ache! - http://www.environment-
agency.gov.uk/business/topics/waste/32084.aspx
5. If the item contains chemicals then it must conform to REACH regulations - http://
www.hse.gov.uk/reach/
6. What duty will I have to pay? - Use a calculator like this one - http://
www.dutycalculator.com/

Be aware some items like candles and plastic bags now come under new Anti Dumping
Regulations and the duty rates are huge!!! - http://customs.hmrc.gov.uk/
channels...nt&id=HMCE_PROD1_026952&propertyType=document
Once you have done all this then you should be ready to go ahead and arrange to pay
for your goods

How should I pay?
Most suppliers will quote for ‘FOB Shanghai’ in other words they will pay for all transport
up until the port of shipping – Shanghai. You can go down the CIF route (cost,insurance
& freight) but expect to pay a premium for it.
In most cases, especially if it is an initial purchase, China suppliers will rarely offer "net
terms", for example, "net 30" (the buyer pays 100 percent of the value 30 days after
receiving the goods).

Keep in mind that for the Chinese factory, net 30 terms really mean 120 days of project
finance -- 30 days to buy the material, 30 days to process and produce, 30 days to ship
(to North America or Europe) and 30 more days to wait for payment. It is certainly
possible to achieve net terms for payment to China, but it will probably be easier for
you to move to better terms with your supplier after both sides have established a
working relationship and mutual trust. Be prepared not to have net terms during the
initial phases of the relationship.

Don't be surprised if a supplier asks for 100 percent payment in advance. But also
realize this is negotiable, just as you wouldn't necessarily accept the first offer of price
without a negotiation. I have found that "30-40-30" terms are often an acceptable
middle ground on payment terms, fair to both parties.
Under 30-40-30 terms, the initial 30 percent of the PO value is paid up front as a
deposit. This allows the supplier to buy materials and lock in the price, which can be
especially important if you have a long lead time or deal in materials that face great
price fluctuations, such as metals. The second payment, the 40 percent, occurs at
shipping upon confirmation of quality. The final 30 percent is paid upon receipt and
inspection at the final destination. Let's look at this 30-40-30 from both the seller's and
buyer's perspectives to find why it is an acceptable middle ground.
Sellers worry the buyer will default on payment, so getting 70 percent (30+40) before
the goods leave port limits their exposure. Since the average factory in China makes
between 10 and 30 percent mark-up, the 70 percent covers at least the majority of the
supplier's internal costs, meaning even if the buyer defaults it won't leave the supplier
out of pocket.

Buyers' biggest concern is that the goods will have quality issues or not arrive at all. By
holding out on the final 30 percent until delivery, the buyer retains some leverage if
quality problems require re-work or replacement parts. It is also important to
remember that the 40 percent is not paid until after the goods are inspected in China,
so quality confirmation must be a key part of the payment process. This is where an
agent can be useful. Ask for pictures or samples of the goods before they are shipped.
Once the goods arrive expect a short delay at customs while they inspect the goods and
check that everything is in order.
And thats it!!

I hope this is useful to someone but if you have any further questions please fell free to
ask
Vicky
Disclosure: Along with being a volunteer moderator for TWF I am also an approved
Community Advertiser. This means that I have gone through all of the regular checks
other advertisers here have and am authorised to sell goods to members.
www.risuswholesale.co.uk - wooden toys,inflatables,tattoos,party bag toys
www.archiestoybox.co.uk - Retail toy website
.

culled from uk wholesale forum


http://www.thewholesaleforums.co.uk/threads/guide-to-doing-business-face-to-face-in-china.100191/

thanks 4 d info,but we need infos on how to go about it,from nigeria.

nice one

I think the strictness of import is more stringent in uk than Nigeria however the information is very important. the canton fair 2012 is presently going on but am planing to be at the nest expo in april 2013. my problem mainly are not customs in Nigeria but other agencies e.g nafdac,SON, nesrea etc below is the list of prohibited items into Nigeria.

1. Live or Dead Birds including Frozen Poultry – H.S. Codes 0105.1100 – 0105.9900, 0106.3100 – 0106.3900, 0207.1100 –
0207.3600 and 0210.9900
2. Pork, Beef – H.S. Codes 0201.1000 – 0204.5000, 0206.1000 – 0206.9000, 0210.1000 – 0210.2000.
3. Birds Eggs – H.S. Code 0407.0000.
4. Refined Vegetable Oils and Fats – H.S. Code 1507.1000 – 1516.2000.29 [ but excluding Linseed, Castor and Olive oils. Crude
vegetable oil are however NOT banned from importation ].
5. Cocoa Butter, Powder and Cakes – H.S. Codes 1802. – 1803.2000, 1805.0000, 1806.1000 – 1806.2000 and 1804.0000.
6. Spaghetti/Noodles – H.S. Codes 1902.1100 – 1902.3000.
7. Fruit Juice in Retail Packs – H.S. Codes 2009.110012 - 2009.110013 – 2009.9000.99
8. Waters, including Mineral Waters and Aerated Waters containing added Sugar or Sweetening Matter or Flavoured, ice snow – H.S.
Codes 2202.1000 – 2202.9000, other non-alcoholic beverages H.S. Code 2202.1000 - 2202.9000.99 [ but excluding energy
or Health Drinks {Liquid Dietary Supplements} e.g. Power Horse, Red Ginseng etc ] H.S. Code 2202.9000.91 and Beer and
Stout (Bottled, Canned or Otherwise packed) H.S. Code 2203.0010.00 - 2203.0090.00
9. Bagged Cement – H.S. Code 2523.2900.22.
10. Medicaments falling under Headings 3003 and 3004 as indicated below:
Paracetamol Tablets and Syrups
Cotrimoxazole Tablets Syrups
Metronidazole Tablets and Syrups
Chloroquine Tablets and Syrups
Haematinic Formulations; Ferrous Sulphate and Ferrous Gluconate Tablets, Folic Acid Tablets, Vitamine B Complex Tablet
[except modified released formulations].
Multivitamin Tablets, capsules and Syrups [except special formulations].
Aspirin Tablets [except modified released formulation and soluble aspirin].
Magnesium trisilicate tablets and suspensions.
Piperazine tablets and Syrups
Levamisole Tablets and Syrups
Clotrimazole Cream
Ointments – Penecilin/Gentamycin
Pyrantel Pamoate tablets and Syrups
Intravenous Fluids [Dextrose, Normal Saline, etc.]
11. Waste Pharmaceuticals - H.S. Code 3006.9200
12. Soaps and Detergents – H.S. Code 3401.1100 – 3402.9000 in retail packs
13. Mosquito Repellant Coils – H.S. Code 3808.9110.91.
14. Sanitary Wares of Plastics – H.S. Code 3922.1000 – 3922.9000 and Domestic Articles and Wares of Plastics H.S. Code
3924.1000 – 3924.9000.00 [ but excluding Baby Feeding bottles 3924.9020.00 ] and flushing ceinstern and waterless toos
toilets.
15. Rethreaded and used Pneumatic tyres but excluding used trucks tyres for rethreading of sized 11.00 x 20 and above
4012.2010.00.
16. Corrugated Paper and Paper Boards – H.S. Code 4808.1000, and cartons, boxes and cases made from corrugated paper and
paper boards H.S. Code 4819.1000, Toilet paper, Cleaning or facial tissue - H.S. Code 4818.1000 - 4818.9000 excluding baby
diapers and incotinent pads for adult use 4818.4000.41 and Exercise Books - H.S. Code 4820.2000.
17. Telephone Re-charge Cards and Vouchers – H.S. Code 4911.9900.91
18. Textile Fabrics of all types and articles thereof and Yarn falling under the following H.S. Codes remain under import prohibition;
African print [Printed Fabrics] e.g. Nigeria wax, Hollandaise, English Wax, Ankara and similar Fabrics under the following
H.S. Codes – 5208.5110 – 5208.5900, 5209.5100 – 5209.5900, 5212.5100, 5212.5100, 5212.2500, 5407.4400,
5407.5400, 5407.7400, 5407.8400, 5407.9400, 5408.2400, 5408.3400, 5513.4100 – 5513.4900, 5514.4100 –
5514.4900, 5516.1400, 5516.2400, 5516.3400, and 5514.4900.00
Carpets and Rugs of all types falling under H.S. Codes 5701.1000 – 5705.0000.
But excluding the Following:
Lace Fabrics, Georges and other embroided Fabrics falling under H.S. Codes 5801.2100 – 5801.9000, 5802.1100 -
5802.3000 and 5805.0000.00
Made-up Garments and other Textile articles falling under H.S. Codes 6101.2000 – 6310.9000.99
19. All types of Foot Wears and Bags including Suitcases of leather and plastics H.S. Codes 6401.1000.11 – 6405.9000.99 and
4202.1100.10 – 4202.9900.99 [ but excluding Safety Shoes used in oil industries, Hospitals, Fire fighting and Factories,
Sports Shoes, canvass shoes all Completely Knocked Down (CKD) blanks and parts ]
20. Hollow Glass Bottles of a capacity exceeding 150mls (0.15 litres) of a kind used for packaging of beverages by breweries and
other beverage and drink companies – H.S. Code 7010.9021.29 and 7010.9031.00.
21. Used Compressors – H.S. Code 8414.3000, Used Air Conditioners – H.S. Codes 8415.1000.11 – 8415.9000.99 and Used
Fridges/Freezers – H.S. Codes 8418.1000.11 – 8418.6900.
22. Used Motor Vehicles above fifteen (15) years from the year of manufacture – H.S. Codes 8703.1000 – 8703.9000
23. Furniture – H.S. Codes 9401.1000.00 – 9401.9000.99 and 9403.1000 – 9404.9000, but excluding Baby walkers, laboratory
cabinets such as microscope table, fume cupboards, laboratory benches (9403), Stadium Chairs, height adjustments
device, base sledge, seat frames and control mechanism, arm guide and headguides. Also excluded are; skeletal parts
of furniture such as blanks, unholstered or unfinished part of metal, plastics, veneer, chair shell etc. Also excluded are
Motor Vehicle seats (9401.2000.00) and Seats other than garden seats or camping equipment, convertible into beds
(9401.4000.00)
24. Ball Point Pens – H.S. Code 9608.1000
Goods: Shedule 4 The Importation of which is Absolutely Prohibited