Advantages and Disadvantages of Importing from China

The need for businesses to remain competitive in the globalized environment calls for a need to adopt strategies to sustain a healthy business operation amidst the competition. This is especially with the expansion of digital marketing and the rise of businesses on a global scale. For one, the importation of goods is one way to increase profits, a factor that allows businesses to enjoy a competitive advantage. Consequently, with the majority of the world’s goods being obtained from China, it makes sense for businesses to import from the world’s largest manufacturer. However, entrepreneurs are advised to consider some of the advantages and disadvantages of importing from China.

Here are some of the key advantages of importing from China

Importing allows the sourcing of goods at lower prices. One of the many advantages of importing goods and raw materials from China is the lower costs. The low labor costs in China allows the manufacturing companies to sell their products at a cost that is way lower than that of the products manufactured locally. This is highly related to the concept of comparative advantage, where the conditions in China such as low labor costs and tax schemes facilitates production at much cheaper costs.

 

High-quality products. It’s erroneous to think that factories in China churn out cheap and low-quality products. The country’s manufacturing sector has changed drastically over time, and many manufacturers are capable of manufacturing goods of high quality. The success of many entrepreneurs who obtained their products from China reflects the quality of products sourced from the country.

 

The Chinese government support trade relations. The Chinese government affirms its commitment to support trade relations, which allows entrepreneurs to proceed with their business with peace of mind. Moreover, trade relations agreement includes an agreement that offers the importers with unique benefits that can make the importation process much easier and cost-effective.

 

Increased effort for better quality control. The realization of the importance of producing and exporting high-quality products resulted in the heightened quality control among China’s manufacturing companies.

 

China is home to top product designers. China holds a dominant position in global manufacturing, and this is attributed to its unique product designs. The manufacturers have good process knowledge that allows for the introduction of features and components that make a product stand out.

 

Established manufacturing infrastructures. Many importers favor sourcing goods from China because of its advanced infrastructures that are critical in the manufacture of products of world-class quality.

 

Despite the advantages, importers are cautioned about some of the pitfalls associated with importing from China. Here are some of the factors that importers, especially the beginners, may need to consider when deciding to import from China in order to side-step some of the costly mistakes that one may experience when importing.

Difficulty in choosing the supplier. There are challenges in selecting whether to go with a third-party supplier or a manufacturer. There are pros and cons of these two options, and the importer may need to consider the system that goes well with the product’s development and supply chain process. It is important for importers to find as much information about the potential supplier.

 

Risks of miscommunication. The risks of miscommunication are very high, especially when purchasing from other countries. This calls for a need for the importer to send accurate details and specifications to reduce the risks of mistakes. The importer may need to call the manufacturer on the phone, and order samples as needed. While this may take some time, it is better than going through the costly mistake of ordering and receiving an item that is different from who you intend to have.

 

Challenges in communicating online. Vetting for potential suppliers requires the need to find as much information about them. While communication through the phone and other forms of interaction is possible, importers may need to travel to China to know more about the companies.

 

Transportation and import duties. Despite the cheaper costs of goods, the importer may need to consider the landing costs which is the sum of all the transport costs, import duties, cost of service providers and other fees associated with importation. There are also hidden fees that the import company may need to pay in the process.

 

Longer time of delivery. Shipping is quite slow, and the time required to transport the products is affected by factors such as documentation, customs clearance, inland travels and port handling processes.

Nevertheless, importing from China is a highly promising endeavor for many businesses. Products such as clothes, shoes, electronics, home furnishings that are imported from China have made their way in many offshore stores. While it is not an easy task, given the complex and costly processes, importing from the world’s largest manufacturer helps in scaling a company’s competitive advantage. Importers may only need to plan and consider factors that may affect their processes to make the process of importation more efficient.