Import From China Business
A practical guide for starting a small business
2010-
Import from China
Sell on eBay
Sandra Kell
Ontario, Canada
Baby Products
Profit This Year: $10,400
“I started with $1,000 and began importing baby products from China. I sell them on eBay, Facebook and in my local stores. After 8 months, I am earning $400 a week. I finally quit my day job!”
Learn How
Importers Manufacturers
Purpose of Importers Manufacturers
The Importer Manufacturer's role in the international trade business is to create or manufacture products in one country (usually foreign) for exporting around the world. Compared to other simpler roles (Import Agent or Import Distributor), the Importer Manufacturer is the most complex and the most resource intensive. However, it can also be the most lucrative because the Importer Manufacturer owns and controls the majority of the import process.
Example of Importers Manufacturers
Here is an example of how someone may have chosen the Importer Manufacturer path.
- Mary loves leather boots especially cowgirl boots. She knows that there is a high demand for quality cowgirl leather boots in the United States.
- She decides to start her own manufacturing plant in China to create a line of leather boots.
- She exports the boots from China and imports them into the U.S. where she ships them to boot wholesalers serving the specialty shoe market.
- In this example, the manufacturing, the importing and finding wholesaler customers are all Mary's responsibilities.
Challenges of Importers Manufacturers
The complexity of the Importers Manufacturers role poses challenges:
- Importers Manufacturers must ensure that there is enough startup capital to carry the operations throughout the early phases of the manufacturing operations. Without enough working capital to properly startup the company could mean early failure.
- Importers Manufacturers need to confirm through research to make sure that the market potential is strong. Before venturing down the Importer Manufacturer's route, confirm your gut feel that there is a large enough market for you to make a healthy living,
- Importers Manufacturers need to develop a product plan through research with consumers. What benefits are they looking for? Which product models are the most popular? How will you roll out your product line if you have multiple products?
Drawback Program for Importers Manufacturers
For products coming into the United States, you may be eligible to participate in the Drawback program. It entitles you to receive up to 99% of your import taxes back if you plan to export your products to other countries again.
Here are the two major types of Drawback programs:
- Direct Identification Manufacturing Drawback -
When goods are imported as raw materials for further production within the U.S., the tariffs paid are eligible for the Drawback program. The tariffs are paid out only if the finished goods are exported again. This government policy encourages U.S. exports and businesses to keep manufacturing jobs within the United States. - Substitution Manufacturing Drawback -
This program allows drawbacks on raw materials brought into the U.S. for manufacturing but they were never used. Components from the U.S. are used instead and the foreign raw materials are returned.
In order to work effectively with Customs, detailed documents are required to trace back to the raw material components of your products. Reimbursements are also time bound. So make sure everything is dated.
This gives you an idea of the scope and complexity of your responsibilities as an Importer Manufacturer. Some import entrepreneurs are overwhelmed by this position. Many of them begin their career in importing from China by becoming an Import Agent or Import Distributor first. Once they learn the process and the rules of importing, it is only then that they will consider being an Importer Manufacturer.