Entrepreneurship & Small Business

Importing from China (Alibaba) -- a few questions . . .

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[OP]
Sr. Member
User avatar
Aug 22, 2009
565 posts
129 upvotes
Guelph, ON

Importing from China (Alibaba) -- a few questions . . .

Hey Guys,

I've used Alibaba to connect with a Chinese factory (Guandong province) that's going to create a custom item for me that I will sell to a niche market here in North America. My initial order will be for about 100 units at about $25USD/unit FOB. I'm quite confident that I can easily sell the 100 items at about $75/unit here in North America, but if worse comes to worse, I could very quickly offload them at cost. Even in the worst-case scenario where I'm screwed out of my entire investment, it wouldn't be the end of the world.

So far, my contact and I have been emailing back and forth each day (and chatted one evening when I was up late), trying to iron out the details. So far, they seem VERY pleasant to deal with, and I'm amazed at the lengths they are going to in order to try and win my business (especially given that it's such a small order!). There's a chance that I might be ordering more units in the future if the project is successful, so perhaps they're banking on that. Once my design is finalized they will send me a custom sample for $100USD which will be deducted off the full 100-item order if placed.

Anyway, I have some questions for the importers of RFD:

1.) The seller's price is FOB. What is the most reliable and cost-effective means of getting my shipment from the port in China to my location here in Canada (near Toronto)? I will need someone to deal with customs in China, shipping by sea to Canada, customs in Canada, and then shipping by land from (presumably) British Columbia to Toronto. The shipment will be about 350kgs and 2.5 cubic meters.

2.) I understand that when I import goods, I will have to pay for HST (13%) as well as a duty. I have the eight-digit HS code for the product (39129090), so is there somewhere I can go to find the duty associated with that number?

3.) My father has a registered company in Ontario and I can use his company number when importing and selling the goods. Do I need to register his company to be eligible to import? If so, is this expensive?

4.) If I use my father's company (that has an HST number), do I simply collect HST when selling the items and then remit to the Gov't at tax time? Does this mean that I only have to remit the net HST (i.e. HST Collected - HST Paid when Importing)? Am I only able to collect HST from Canadians? What happens if I sell items to Americans where HST doesn't apply?

5.) Does anyone have any tips or things that I should be cautious about?

Thanks!
20 replies
Member
Jan 25, 2010
375 posts
34 upvotes
Montr
VifferFun wrote: 1.) The seller's price is FOB. What is the most reliable and cost-effective means of getting my shipment from the port in China to my location here in Canada (near Toronto)? I will need someone to deal with customs in China, shipping by sea to Canada, customs in Canada, and then shipping by land from (presumably) British Columbia to Toronto. The shipment will be about 350kgs and 2.5 cubic meters.
-- Ask your seller to contact a shipper and charge you for it. 99% of the time the shipping rates they get will be soooo much cheaper than a company you would contact here. The price they'll quote you would be to the shipping agent's warehouse here in Canada (even if on their invoice it says door-to-door, unless the shipping company is DHL/FedEx/UPS, that's never the case. And for your volumetric weight I doubt that the courier companies would be the cheapest option. Though, it seems like it would be close. So I would ask them to get you quotes both for those guys and for a freight company). Then you have to go and clear it from customs, and have someone ship it from the warehouse to your warehouse. To clear from customs you can either go to Canada Borders Agency and do it yourself, or hire a broker. The broker would cost you a fair amount, so if you have the time to go do it yourself, I'd choose that route. Once it is cleared, most shipping agent's warehouses here would offer to deliver it to your warehouse, typically that is the cheapest option as opposed to have a third shipping company go to their warehouse and bring it to yours. Because the shipping agent's warehouse would also charge them a "docking fee" which can be anywhere from $60 to $100.

2.) I understand that when I import goods, I will have to pay for HST (13%) as well as a duty. I have the eight-digit HS code for the product (39129090), so is there somewhere I can go to find the duty associated with that number?
-- Here you go: http://www.cbsa-asfc.gc.ca/trade-commer ... u-eng.html I find it much easier to just download the PDF file and file the HS code's rate.
Just remember, the 13% HST that you will pay on your item is reimbursable granted that you are re-selling the item.


3.) My father has a registered company in Ontario and I can use his company number when importing and selling the goods. Do I need to register his company to be eligible to import? If so, is this expensive?
-- Yes you need an import account. This is typically your father's GST/HST account number followed by RM001, but you have to call up the CRA (or the borders agency, I forget which one) and ask them to activate the import number. Otherwise you won't be able to clear the goods from customs. Getting an import number is free and it takes only a phone call. They'll ask you a bunch of questions as to how much you expect to import and what items bla bla and you're done.


4.) If I use my father's company (that has an HST number), do I simply collect HST when selling the items and then remit to the Gov't at tax time? Does this mean that I only have to remit the net HST (i.e. HST Collected - HST Paid when Importing)? Am I only able to collect HST from Canadians? What happens if I sell items to Americans where HST doesn't apply?
-- You are correct about the Canadian part (though if you sell to provinces which don't have HST, you only collect the GST. When you sell to the US, you are eligible to ask for the HST that you have paid back, as well as to get a refund on the custom duties that you have paid on your item, this is because the product isn't staying in Canada. But I've never done this, so I don't know how it's done.

5.) Does anyone have any tips or things that I should be cautious about?
Threaten your supplier that you would have the shipment inspected by a third party before shipping. There are many companies who do this (you give them a photo/dimensions/information of your product, they send their agent in China to the factory and have it checked.) this is relatively cheap to do on larger shipments, but you don't actually HAVE to do it. Just at the time of order tell them you will do this prior to the shipment coming out. It'll make them make the goods right lol. And then it's up to you if you actually want to do an inspection or not.
Start your orders with small items until you have a trustworthy relationship with your supplier. Argue with them on your price but don't push them too much. Most Chinese suppliers would go down on the price when you argue with them, but in turn they'll use cheaper components and lower quality results endure.


Thanks!

I hope this helps.
[OP]
Sr. Member
User avatar
Aug 22, 2009
565 posts
129 upvotes
Guelph, ON
Sean_A wrote: I hope this helps.
Wow, thanks Sean_A, that is certainly helpful! There are some great tips in your post.

SHIPPING:

I'll ask the supplier what kind of shipping rate they could get for me. I tried chatting with a Chinese shipping agent directly and it sounded like their cost was $630:

- $150 for customs brokerage in China
- $300 for shipping by sea from Chinese port to Canadian port (i.e. $120 per cubic meter)
- $150 for customs brokerage in Canada
- $30 for insurance

However, the agent said that this was shipping to the "Toronto Port", but since we're not a coastal city, this probably leaves the goods in British Columbia or something and I would still have to pay to ship from BC to Toronto.

TARRIFFS:

I took a look at the full tariff document from the CBSA website but I couldn't find my specific HS number there (3912.90.90). The closest item I could find was this (although I don't know what it means):

3912.90.00 00 - Other
Unit of Measure: KGM
MFN Tarriff: Free
Applicable Preferential Tarriffs: CCCT, LDCT, GPT, UST, MT, MUST, CIAT, CT, CRT, IT, NT, SLT, PT,
COLT: Free

HST:

Thanks for the HST tips. Before talking with my father, I was always assuming that I would have to eat the full 13% HST on my own, but it sounds like this isn't the case (which is great)! I anticipate that my items will mostly be sold in Canada (30%) and the US (70%). I will look into how I claim back my HST for goods that are exported to the US. I'll look into having his company registered for imports.

QUALITY CONTROL:

I will have a sample sent to me before the production run, but telling them that I will have an independent inspector prior to shipping is a very good idea. If the inspection is cheap enough, I will probably just pay to have it done. I think I've read that you can have an inspection done for about $100 - $200, so it's probably worth the money!

Thanks again!
Newbie
Sep 25, 2010
1 posts
calgary
How did that go? Did you import from China? Was there any issue with customs here?
Newbie
May 24, 2016
70 posts
16 upvotes
Hey all, thanks for all the great posts. I have learnt a lot from the community related to importing. One question however:

- I am importing from China. LCL (less than container load)
- Was quoted 140 USD to Toronto ( I assume a railyard)
- The company in China arranged that and am aware there will be some charges on this end.

- What companies could be recommended in Toronto to organize things on my end so I can go directly to the railway and pick it up?

- Would it perhaps make more sense to do FOB? A freight forwarder here in Toronto indicated that would be easier.

What is the best and cheapest method? And also the most reliable?

Thanks!!!!!
Newbie
May 19, 2015
16 posts
Toronto, ON
What route did you end up going if you already finished your first batch btw?
Newbie
Dec 26, 2017
1 posts
Hi VifferFun and Sean_A,

Thank you for your posts! They are very informative! I do have some questions and appreciate any advice or thoughts on this.

I am wondering in order to help you cut costs, which method of transportation did you use? I realize most if the package is usually under 60kg, they will ship by air with international courier like DHL, etc. and anything over 60kg (I think the weight standard is different with different companies...) but if it is a bigger package, I understand they usually send by sea (which means freight would be a little cheaper and the products would take longer to arrive). They don't usually send smaller packages by sea as they claim the smaller parcels get lost if shipped by sea...

Did you hire any fright forwarders or custom brokers? Or did you provide CBSA with the documentations and duty payments yourself? I would like to do this step myself to cut costs, but I'm wondering if that would be super inconvenient for me. This may be a silly question but if I attempt to do this myself, would I have to go myself to the actual dock where the shipment would arrive and work with the CBSA there?

The supplies/manufacturers are giving me some freight quotes which are higher than I expected... almost USD $500 for order worth $920. (Is this kind of price normal? That seems really expensive).
Thank you again and any help or insight is greatly appreciated :)

VifferFun wrote: Wow, thanks Sean_A, that is certainly helpful! There are some great tips in your post.

SHIPPING:

I'll ask the supplier what kind of shipping rate they could get for me. I tried chatting with a Chinese shipping agent directly and it sounded like their cost was $630:

- $150 for customs brokerage in China
- $300 for shipping by sea from Chinese port to Canadian port (i.e. $120 per cubic meter)
- $150 for customs brokerage in Canada
- $30 for insurance

However, the agent said that this was shipping to the "Toronto Port", but since we're not a coastal city, this probably leaves the goods in British Columbia or something and I would still have to pay to ship from BC to Toronto.

TARRIFFS:

I took a look at the full tariff document from the CBSA website but I couldn't find my specific HS number there (3912.90.90). The closest item I could find was this (although I don't know what it means):

3912.90.00 00 - Other
Unit of Measure: KGM
MFN Tarriff: Free
Applicable Preferential Tarriffs: CCCT, LDCT, GPT, UST, MT, MUST, CIAT, CT, CRT, IT, NT, SLT, PT,
COLT: Free

HST:

Thanks for the HST tips. Before talking with my father, I was always assuming that I would have to eat the full 13% HST on my own, but it sounds like this isn't the case (which is great)! I anticipate that my items will mostly be sold in Canada (30%) and the US (70%). I will look into how I claim back my HST for goods that are exported to the US. I'll look into having his company registered for imports.

QUALITY CONTROL:

I will have a sample sent to me before the production run, but telling them that I will have an independent inspector prior to shipping is a very good idea. If the inspection is cheap enough, I will probably just pay to have it done. I think I've read that you can have an inspection done for about $100 - $200, so it's probably worth the money!

Thanks again!
Deal Addict
Feb 5, 2009
2809 posts
928 upvotes
Newmarket
This is a timely topic for me since I am about to make a purchase, this is a personal purchase and not for resale. The questions I have are the following:
I was quoted the price CIF (cost, insurance and freight), so I am expecting to pay only for hst and duty on top, should I expect any other fees (I plan on picking up myself from the port).
The supplier states delivery to Toronto Port, the shipment is by sea, am I correct in assuming that everything is arranged by the seller up to the point it is delivered to Toronto Port.
My payment terms are 30% in advance and 70% against bill of landing, the currency is USD, how is the balance settled, will they want me to wire the balance once the goods are in Toronto without me even seeing the item?
Will I need import account since this is a personal purchase? I can set up import account since I already have a business account, however since this is a personal purchase I didn’t want to mix it up.
Thanks
Deal Expert
User avatar
Aug 2, 2010
15195 posts
4869 upvotes
Here 'n There
VifferFun wrote: 2.) I understand that when I import goods, I will have to pay for HST (13%) as well as a duty. I have the eight-digit HS code for the product (39129090), so is there somewhere I can go to find the duty associated with that number?
You have neither the HS code, which is 6 digits, nor the HTS code, which is 10 digits and is the one you require for the paperwork to be done during importation into Canada. In fact there is no HTS code that starts with 39129090 (See below the page from the 2018 Canadian Border Services Agency Customs Tariff showing all 3912 codes). You had better determine the proper code before you import or your product will be held at the border pending this being determined. The customs brokers are not always a great help I have found.

What is the product?
tariff.png
Newbie
Dec 23, 2017
9 posts
3 upvotes
Homerhomer wrote: This is a timely topic for me since I am about to make a purchase, this is a personal purchase and not for resale. The questions I have are the following:
I was quoted the price CIF (cost, insurance and freight), so I am expecting to pay only for hst and duty on top, should I expect any other fees (I plan on picking up myself from the port).
The supplier states delivery to Toronto Port, the shipment is by sea, am I correct in assuming that everything is arranged by the seller up to the point it is delivered to Toronto Port.
My payment terms are 30% in advance and 70% against bill of landing, the currency is USD, how is the balance settled, will they want me to wire the balance once the goods are in Toronto without me even seeing the item?
Will I need import account since this is a personal purchase? I can set up import account since I already have a business account, however since this is a personal purchase I didn’t want to mix it up.
Thanks
Most likely before shipment you will have to pay the rest off. If you do not like the product, good luck on getting a refund after payment, unless you paid with PayPal with your CC (never use your debit/paypal balance).

No import account is needed for a personal purchase, likewise with any other international item, like an amazon order from the usa.
Newbie
Apr 6, 2018
1 posts
I am also curious about importing, I am doing this for promotion for The City Of Toronto,so they merchindise will not be resold.
A am looking at 2500-3000 plastic beachballs with the logo printed on it.
Any knowledgeable soul out there who knows the import bussiness that would be able to hook me up or walk me throgh the process step by step?

Much appreciated need merchandise before labour day.
Jacki
Newbie
Mar 30, 2019
1 posts
I have a few questions regarding importing from China from alibaba. I am women’s clothing company so I found a few suppliers that dropship but the problem is the shipping costs. They told me 0.55kg for 21 usd so that means I would have to sell my products for a lot higher than I thought. What are my options ? I found a good suppler that had amazing products that I want to resell but the minimum amount that you can buy is 100 pieces so it’s not an option for me currently since I just started my business. Can you also tell me about repackaging options. I recently registered my business but I don’t no how I can reduce the customs.
Deal Expert
User avatar
Aug 2, 2010
15195 posts
4869 upvotes
Here 'n There
I guess you need to call around for cheaper shipping options.

As for the minimum volume you're SOL unless you can convince them to sell you fewer, but then the price goes up.

You can't reduce 'customs', if you mean duty, taxes. It's a fact of life.

Seems like you don't really have the resources to compete as you can't handle the about shipping cost, minimum order quantity, customs fees, etc.
Member
Jun 27, 2010
457 posts
110 upvotes
Mississauga
This thread is quite useful as I am importing some blinds from Alibaba. I am preparing the necessary docs the clear the item from customs.

But what happens when the HS code declared on the Bill of Landing doesn't match what is listed on CBSA?
- for example, my supplier code is HS 6303920010. But this cannot be found on the CBSA pdf. The supplier says this code is 100% correct.
- Doing a quick google search confirms this is correct.
  • HS Code: 6303920010
  • Article Information: Shutter, valance, roller shutter, of synthetic fibres, not knitted or crocheted
Jr. Member
Oct 9, 2011
110 posts
17 upvotes
I ordered 5, 50 lbs boxes from Alibaba, had all the necessary custom info and they ended up shipping it UPS right to my house (I resell them online)

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