[This post is currently a work in progress. I hope to eventually make it a comprehensive resource, but it is currently unfinished]
This post was put together to help you navigate the importing process, but I’ve created a separate post specifically for Understanding Import Duties because it can be a somewhat complex process. Please take the time to read through both posts if you plan on importing merchandise from China.
You have two primary shipping options when ordering inventory from China. You can ship Air Express (transport the goods by plane) or by Ocean Freight (transport the goods by ship).
There’s also a third option called Air Freight, but generally the two options above should be all you need to know
Shipping by air can be expensive, to the point that it can make some product opportunities unprofitable, but it’s also a much faster method and simpler process than shipping by sea. Shipping by sea also takes much longer than shipping by air. For these reasons, it’s highly recommended that you begin your private label business by choosing a product that can be shipped by air (Express) profitably.
There are a few things that are important to understand about importing in general, regardless of what method of shipping you choose. Let’s cover these first, then we’ll go over some of the specifics regarding shipping by air vs. by sea.
Note: Rules and regulations will vary by country. This post will assume you are importing merchandise from China into the US. The importing process can be complex, so this is meant to be a general overview only. Please contact a professional if you require more specific information.
Shipping Direct to Amazon
- You can generally ship direct to Amazon by air Express with any carrier and without having to use a separate freight forwarder. In order to ship direct to Amazon by sea, you must use Shapiro.com as your freight forwarder.
- You cannot use Amazon’s discounted UPS rates when for shipments that originate from outside the United States.
Shipping by Air
- Cost is primarily based on both the size and weight of your shipment.
- When shipping by air, you should target rates of $6.00 per kg for relatively small products. You may be able to do better than this rate, but it should be achievable as long as your product is small. Larger products will of course have a higher rate.
- It’s recommended to use your suppliers account when shipping by air.
- Common Air Express carriers are UPS, FedEx and DHL. Each will provide door-to-door service. Air Freight services provided by other carriers may only ship to an airport, requiring that you arrange delivery to the final destination. In most cases you’ll want to avoid this, so make sure you’ve selected a carrier that provides door-to-door service.
Shipping by Sea
- Cost is primarily based on the volume of space of your shipment. If you are shipping less than a container load, your price is often determined by cubic meter.
- The documentation process can be complex. It’s recommended you hire a licensed customs broker and freight forwarder to handle the process for you.
- There are some fixed costs associated with shipping by sea, so it isn’t always less expensive than shipping by air.
While the regulations are complex, you don’t really need to understand them all. Just know that they exist and work with a professional who understands the process thoroughly.
This means you should hire a licensed Customs Broker and a Freight Forwarder. Usually you will have the same company perform both services for you, but it’s worth knowing that you at least have the option of hiring them separately (or even just hiring one of the two).
Note: While air Express shipments still require customs clearance, you should typically only need to hire a customs broker or freight forwarder if shipping by ocean freight.
If you’re shipping via air, it’s recommended you use your supplier’s shipping account, so you shouldn’t need to hire a freight forwarder (although this is an option if you wanted to check pricing).
Also, major carriers like FedEx, UPS or DHL will handle the customs clearance for you, so you shouldn’t need to hire a customs broker either.
Customs Brokers vs. Freight Forwarders
So let’s first clarify the difference between the two:
Freight Forwarder: A freight forwarder is an expert at logistics. They can help you find the best shipping rate and handle the door-to-door shipping process.
Customs Broker: A customs broker’s role is to handle the customs clearing process on your behalf. This means they will handle all the documentation and red tape that you probably don’t want to deal with.
So, together, they can handle the actual shipping and customs clearance, allowing you to focus on your core business. Remember, the same company may provide both services for you or you can hire them separately and ask them to work together.
The Two Exceptions
OK, so I said you shouldn’t have to worry about any of the details. That’s true, but I at least want to make you aware of two things that are very important:
- Importer Security Filing (ISF): All importers are required to file one for all ocean freight shipments entering the United States.
- It MUST be filed at least 24 hours before your cargo is loaded on the vessel. There are severe penalties if this is not done.
- Your customs broker should work with your supplier to make sure it’s done, but because it’s so important, it’s probably worth confirming that it’s been taken care of before you cargo is loaded.
- Customs Bond: You’ll need to make use of a customs bond if importing merchandise into the United States. You have two options here:
- Single-Use Bond:
- Continuous Bond:
If you want to learn more about importing into the U.S., some good basic tips can be found here:
The above page also links to a thorough PDF that can be a useful resource as well. It’s very long, but fairly well organized, so it can be a good reference if you’re looking for specific information. The direct link is here:
You can also download an excellent (and free) guide on the importing process by going to http://www.importdojo.com/ and providing your email address.
This post is part of the Ultimate Wiki Project