Product Sample Costs, Importing to the USA from China & FBA Restrictions
Question from Greg Field
I’m looking to get some samples for a product from a fairly reputable factory with the listing on Alibaba. The product is in their catalogue – with genuine pictures of the item in situ (no computer generation / photoshop etc.)
I’ve been very professional in my dealing, letting them know my intention is to place an order of 500 units if the product meets my satisfaction after testing samples, which I will pay for…
Now I hear back from them that samples will need to be made, so maybe this isn’t a stock item? Moreover, 5 units will be $200, 10 units $300 dollars FOB “their company policy”.
These are small’ish items / flatpacked wouldn’t weigh more than 5 kilos so the shipping costs won’t be high.
How should I play this? Just accept the high fees for samples as the price of doing business? (The manufacturing cost will be less than $3 dollars I estimate)
I would ask that the $300 be deducted from a future order
Am I being played there, and should walk away?
I’ve only found one other listing of a similar design / and it’s not the same
Answer from Michael Veazey
It’s fairly standard for factories to charge a high price for samples. Exactly why I couldn’t tell you. But it’s fairly obvious that they don’t want to start producing micro-batches of 5 or 10 units at a price that anyone could resell for any kind of profit, so they want to make sure they place a barrier in front of such things.
You may also be right that they are not carried as stock; or maybe they just ran out
I would usually expect in normal times to pay up to $80 for a small item to be made/taken off shelf and shipped to me in UK (similar cost to go to rest of Europe or USA btw ). However bear in mind that last time I checked with a freight forwarder, the cost of Airfreight was up 300% (3x) compared to this time last year. That’s because half of the world’s airfreight is carried in passenger planes, a big % of which have been/are grounded. And because demand for ecomm is up at the same time.
So a 5 kilo package that might have cost $40 to send DDP (including all duties, import costs etc.) last year by air express (my rule of thumb was $8/kilo for DDP air express – ie by UPS, DHL etc etc) will now cost anywhere up to $120 just for freight.
In the light of that, the charge seems a little high but not terrible.
Negotiate a little by all means but I would still expect to pay say $150-200 range. In my experience highish sample costs from China are indeed just part of the cost of doing business.
Hope that helps and sorry again for ridiculous delay. We’ll try to do a better job of catching questions!
Importing to USA from China, Freight Forwarders
Question from James Fearon
I’m expecting to ship my first bulk order to the US from China in the next few weeks. A Freight forwarder is bringing it door to door to the warehouse / fulfillment partner in the US.
I understand I need each of the 4 items in order to clear customs? Is there anything else I need to be aware of or any pitfalls I should look out for?
- Commercial invoice
- US tax ID (EIN or Social Security Number?)
- Customs form
- Bill of lading
I understand the freight forwarder will use their own customs bond and the UC will be my warehouse partner. Is it standard practice to use the freight forwarders customs bond for LCL shipments?
This kind of thing can vary from Freight forwarder to freight forwarder but they will often do things like this.
In the end all that matters is:
- who/which company pays for what
- whose name/which company is assigned officially in each import role (eg importer of record)
The main thing is to be Very very clear about who pays for what; whose name is on the customs documents in what role (eg importer of record etc.) Get it all in writing.
If you’re really in doubt, check with a *customs broker* which – in the USA or Canada – is a licensed role. Your freight forwarder *may* or *may not* be a customs broker too. It’s obviously convenient if they are. If they aren’t, check with one.
In UK/Europe, there is not such an official distinction between FF and customs broker.
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