Importing goods from China and selling them in the U.S. or abroad continues to be an attractive product sourcing choice for retailers, from the small time business to the giants like Wal-Mart. The comparatively cheap labor and production expenses in China can result in a much greater profit margin than what a retailer may get if he sourced his goods in the U.S. (wholesale and even straight from the manufacturer).

However, retailers must understand that the cheaper the production costs of your products, the higher your risks. This goes along with the old saying "you get what you pay for." Chinese manufacturers are known to settle for rock-bottom prices for their services, but what they won't tell you is that quality will need to be compromised, in the form of inferior quality of raw materials and/or level of craftsmanship. There is a trade-off between cutting down your costs at any rate, and the overall risks you are taking. Finding the right medium is the most basic challenge in the import export business.

Maybe you've heard about good and bad points about the import export business, like being able to get goods made at 1/10th the price as in the U.S.; high quality items like handbags which could easily be marked up to 500% in the U.S.; and top notch producers with quality control comparable to U.S. factories; but also vanishing containers, stolen intellectual property, defective products. The negative incidents could be avoided entirely by doing your due diligence: mentoring under an experienced importer; consuming books and trade publications on the subject; taking classes in your local community college; and talking to an import export advisor that has experience on how to import goods from China.

The main benefits of outsourcing your products to China are manufacturing costs are much lower than in the USA; Chinese manufacturers are usually very creative and adaptive; and if you're successful, you can ultimately own your own factory, providing you with the lowest manufacturing costs possible.

The primary challenges of having your goods sourced in China are that lifestyle, language and business practices are quite different from those in the U.S. and are not easy to understand and learn; in order to attain the price point you desire,

You might be needed to order a higher quantity of merchandise than you would from a US supplier; and of course, importing as well as any other new venture, demands a solid, well thought out business plan.

Your ultimate decision on whether or not to source your products in China has to take into consideration these four points: (1) The real costs of importing your products ; (2) A precise monthly sales forecast; (3) Cash Flow forecasts; and (4) Profit

Margin Assessment; and (5) if your business can manage the time lags involved in importing, as you may find yourself out of stock for some items that your clients want.

If you calculate that the overall savings realized if you import goods from china are 35-45%, then it is really worth going for it. If you are not obtaining more than 30% savings compared to your current costs, first go back to your current distributor(s) or supplier(s) and see if you can negotiate a better deal. It will save you time, energy and money. You may always reconsider importing later. Important thing: if you calculate that the savings from outsourcing your products to China definitely justifies the costs, the truth is that if you do not undertake it, your competition will (or is already doing it) and will ultimately dominate your market. Typically, the overall savings are worth going for it. If you find this to be the case, make importing from China a top priority.

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