Top five mistakes one commits while sourcing products from China

Just a quick question:

  1. Do you work in the import/export business?
  2. Where are you going to start selling your product?

In your retail establishment? Alternatively, are you considering Amazon, Shopping Five, or EBAY?

It makes no difference what business strategy you adopt if you are importing things from other countries. This content is written specifically for you. This post will discuss five catastrophic blunders that could lead to the failure of your business.

The first error is failing to compute the correct duty.

Tax and tax were once considered key ingredients in your recipe. It is similar to the salt and pepper in your dish. You do not have to think about it because it has included in the recipe.

Consider the trade conflict between China and the United States.

You should consider it if your ordinary tax and duty rate is 5%. You must now pay an additional 25%, for 30%. If you already import merchandise. How will you absorb the expense increases? Will you be able to pass this on to your customers? How will this affect your margin if you have not started importing yet? As a result, I recommend that you priorities tax and duty as the first item on your checklist.

For those of you who are unsure how to calculate the exact tax and duty rate for your merchandise. This post will walk you through the process systematically.

The second error is to behave as if you are a gambler going in blind on an investment dollar.

I’m going to use gambling as an analogy for this error because it has the potential to be disastrous.

You stroll into a casino with $150 in your pocket. You’re so excited that you rush to a blackjack table, and you end up losing $150. You’re upset now. Don’t be upset; this is referred to be gambling, not enjoyment.

However, starting a business or owning an importing company is not gambling or entertainment. You must understand not only how much money is required to start the firm but also how to sustain and carry it through.

Using Amazon FBA as an example, there is a lot of information on the Internet informing you that you only need $500 or 900 dollars to start an Amazon FBA business and make a lot of money. A businessman, on the other hand, should disagree with this get rich quick mentality, since as a businessperson, you cannot approach this, even if it is $500, as a gambling venture. The truth is that true success does not usually occur on the first try. It may take a second or third attempt for you to be extremely successful. This is critical for those of you who wish to start an Amazon FBA business.


The third blunder is failing to understand your rates of return.

Any well-informed investor has two eyes. One is concerned with how much this is costing them, while the other is concerned with my rate of return on their investment.

In our company, when salespersons drastically reduce the price of a product, we feel as if we are losing money on it. We frequently take this joke seriously. Do we work for this company or do we work free for the customer? You own your own importing company. You must ask this question yourself.

Do you run your own business? If you labor free for your consumer, you need a minimal rate of return to make your time and effort worthwhile. What is your expected rate of return?

Most people who start a business have no idea what the rate of return is. It is understandable if you are fresh to the industry.

You can find out how much this product sells on the market if you know how to perform a landed cost analysis. If you know your total landing expenses, you can calculate your rate of return or profit margin.

What profit margin should you be looking for? To determine what rate of return you want, you must first understand how to benchmark your rate of return. If you invest in the stock market, you can get an annual return of 8%. The rate of return varies greatly based on the industry and the product. The rule of thumb is that the smaller the business, the bigger the return because the risk is also higher. If you are in the Amazon FBA business, I would recommend that you aim for a net return of at least eighteen to twenty-four percent. If you invest in the stock market, you will get three times your money back. The bottom line is this, know your rate of return before you committing your money to your suppliers.


Fourth mistake: wrong order quantity

So many groups are teaching students to buy a small quantity by airfreight, so they can test the market. Are you testing or just gambling?

If you have a plan for your second shipment that includes how many and when I am going to buy the second shipment. That is testing.

However, if you do not have a plan for your second shipment, then you are simply Gambling. Because it means you are going to perpetually run out of stock. You pretty much put yourselves back into a corner. Either you pay another airfreight to ship another small quantity, which will make you lose money because the airfreight covered the entire margin. Alternatively, you have nothing to sell. This means the first order quantity is wrong. You are gambling this quantity and gambling away your money.


Once you know how to do the inventory planning, you would be able to use your money wisely. When you make your purchase order, you need to know exactly why you are buying at that quantity. Otherwise, you are putting yourself in gambling mode, hoping things will work out. It could be a mistake, which you are gonna have to pay the price for this mistake.

Mistake number five: not having a marketing budget

Particularly for those of you who are the Amazon FBA sellers, many sellers do not even budget the PPC as your marketing cost. That is a mistake because doing business on Amazon is getting very competitive.


You cannot expect your product to be a rock star if you just take off on its own. You have to help this product by giving it some fuel to help lift this product until it gains some momentum and can sell on its own organic traffic. Not only the PPC but also your returns and defects should be taking into consideration.

At last, for you to own a successful importing business, I suggest you make a checklist to avoid these five fatal mistakes. If you are already preoccupied with other tasks, it is a good option to consult a Top Guangzhou sourcing agent or an experienced sourcing agent in China. They can help you minimize risks and reap more benefits while sourcing.

Do I know my duty rate?

Do I know exactly how much money I need to invest to sustain the business?

Not just the first 500 dollars. Do I know the rate of return from my money?

Do I know why I am buying this order quantity? Do I have a plan for the second order?

Do I have a marketing budget to sell and promote this product?

Do I have any references for a market guide in China?

I hope this article can help you. Thanks for reading.