Month: July 2019

What’s the Commission Rate of Guangzhou Agent

This is the question all buyers have to ask in advance if they’re planning to buy from Guangzhou with the help of an agent. But it’s so confusing that the quotes they get vary significantly from agent to agent, even from person to person within a same agent.

“How much should I pay an agent in Guangzhou help me with sourcing?”

This article would offer you some basic ideas about the DIFFERENT commission rates here in Guangzhou.

1% Is Not Reasonable, Nor Sustainable:

If you search on Google with a search query like “Guangzhou agent”, you may find that many agents there are claiming that they only charge 1% commission.

Some of them even have a hint inside that their services are so cheap that you can almost get them ALL FOR FREE.

If you just have a 2nd thought about those “miracles”, you would definitely have one questions like:

– “they even don’t know what I buy and how much I buy, how they can offer a fixed commission rate?”

– “If I just buy a carton of socks worth 100 USD, are they happy to get a 1 USD as their commission?”

This is a typical “bait-and-switch” strategy: offer something that looks so irresistible that you can’t help clicking onto their site and contacting them… then you realize that you’ve been trapped, but it’s too late to step back.

This make me think of the flashing flying bait that fish man use in a fishing tournament.

Busy Fool or Lose Money?

If you think the “one carton socks” is something too puffed. Then let’s look at one 40 feet container (40,000 USD by average), 1% commission rate would be 400USD.

One experienced stuff average monthly salary in Guangzhou is at least 1,200USD because basic living expense is already about 500USD per month. (apartment renting, food, transportation…)

Sourcing, market visit, follow up, collect order, QC, arrange shipping… a 40 feet container would take one stuff at least 15 days.

The gross profit one staff can generate is about 800USD. How can a company make ends meet? Who is going to pay this 400USD?

Not mention the employer needs to pay some money for staff insurance, pension… Office rent, warehouse, advertising, tax…

Of course, above numbers are too good to be true. Base on the fact that only 50-75% visitors can place some orders. Only 10-20% visitors can order one container or more than one container.

That means the agent makes nearly no money when they’re working 30days a month. Are they happy to be a busy fool?

If they can not work 30days a month (Dec. Jan. Aug. Sep. almost no visitors), they’re even losing money! Is anyone happy to lose money?!

How Do 1% Agents Make Money?

Yes, they have to use other “smart” ways to make money.

One very common trick goes like this:

The shop quotes you 1.00 yuan(CNY)for a pack of tooth picks, the translator/agent people will manage to let buyers pay 1.10 yuan in the end. They either translate as 1.10 yuan per pack, or simply tell shops to add 10%!

During this simple transaction(less than 3 seconds), they already increased the price by 10%! But if you don’t know any Chinese, you will have absolutely no way to find out what’s happening. You will probably share with your family or friends that you have a nice cheap agent in Guangzhou who only charges you 1% commission!!!

They can use body languages and write hints/signs at somewhere if you know some Chinese.

It’s NOT something extraordinary that we see agents people lead buyers to the shops and directly tell the shop “add me 10 points”, which means buyers pay 10% extra.

If possible, I DO suggest you go to the market and look for products information by yourself before going with anyone else. The price can also be a bit different in this way, but i bet you can find out what’s going on in most cases.

In this way, we can also put you on our schedule to ensure when you need us, we can be beside you. If you’re not on our calendar, we may be too busy to take care of you when you need us.

But for other tricks, it’s not this easy at all:

They’re always interested in showing you products in their showroom, or leading you to a factory/shop that they claimed it’s their own factory/shop, or one of their relatives’ factory/shop.

They promise purple and blue that the prices you get from these factories/shops are the lowest because they have built “long-term-special” relationships…in this way, they can tell the factory in advance to increase the price, even by 50%!!

Another typical way to make huge money is to switch suppliers. The agent people show you around the market. The suppliers in the market quote one price for one product, but after you wire deposit, your agent will desperately find another supplier with a lower price.

The money in this switch is big. But the risk is also BIG. You can easily receive something “Similar”, not exactly same as what you saw in the market. This “jump-over” is not fair to these suppliers in the market either.

To us, business is not only of money. Business can only grow when everyone is happy and is done in a fair way to everybody.

One TRUE Story:

One of my clients from UK contacted a big Guangzhou agent (has 100+ employees and their ads are showing everywhere both online and offline). This agent was “so kind” to offer him a 1% commission. They promised that their prices are the lowest because they own this topiary factory (my client was looking for artificial topiaries).

But this “clever” agent guy made a small mistake by telling my client that the factory owner (who was driving them to hotel) is the agent company’s full time driver. My client was clever enough to find out that the driver was not a real driver. So he told me this and wanted me offer some suggestions.

The next day, after spending 2 hours searching for a nearby factory zone, we parked our car outside of a factory and the boss who greeted us inside was the “so-called-driver” by the agent guy.

The “so-called-driver” was actually the owner of the topiary factory. My client was right!

Later on, we found that the agent had told the factory owner to add 10% more price if they introduce my clients to their factory. Guess what? The factory owner further lowered his price by 19%, with our help!

We helped our client saved 29%!

This is how the “smart” agencies are making money. They tell you a 1% commission first, and then make a 20+% commission either by taking “kick-backs” or/and increasing price behind you.

What’s Reasonable?

It’s a 3%-10% of your total purchase value, according to what you buy, how you buy and how much you buy.

I can’t go further to explain how these “3 HOWs” matter, because situation varies from case to case. But you can use your common sense here:

The commission rate for buying one container pencils from one supplier is definitely different from buying one container 100 different products from 30 suppliers.

If you need most of your products to be customized, the commission rate will definitely be higher.

Hope this article helps you understand why many Guangzhou agents are offering 1% commission rate, but still making quick money and driving Porsche / Mercedes .

There are dozens of lighting shopping malls in Guzhen, but not all of them are worth visiting. Only 70-80% of the showrooms in shopping malls are actual factories, rest of them are resellers which cooperate with different factories. We have selected best value for money markets (you can find a list below) in Guzhen.

Zhongshan Guzhen lighting wholesale market is the largest lighting wholesale market. And also is a professional lighting production base in China

China lighting capital, named China Guzhen, is located in zhongshan, guangdong province, China. It’s in the middle of the pearl river delta, and connect to Hong Kong and Macao.Guzhen is not only outstanding in economic structure, but also in industrial structure. In addition, it’s lighting industry taken up more than 95% in its total economic volume.Since its developed in 1982, it has formed a lighting industry group. Guzhen annual output value was over 100 billion RMB. It is the largest lighting wholesale market in China.

Our products have been exported to 190 countries and regions, all over the world. Also owned 70% market share in China’s lighing industry. In fact, we sharing the same market with France, Italy and Japan.

Guzhen will hold lighting international exhibition every year . Now Guzhen shape innovation move industrial development strategy. And try to create original design heights. Lighting market try to both mould “guzhen lighting” regional brand, and build a “global buyers purchasing line”. Guzhen lighting together overseas buyers, and first-class quality domestic companies as one. And its also established non-worry purchase, and trade convenience.

The biggest lighting market in the world:Guzhen
Where is Guzhen location?
About Guzhen
How many kinds of led light can we sourcing in Guzhen?
How is the led factory price in Guzhen?
How many famous lighting market in Guzhen?
Do I need to visit the led lighting factory?
Does it any other lighting market in China except Guzhen?
How to go to Guzhen from Guangzhou?
How to go to Guzhen from HongKong?
How to go to Guzhen from Shenzhe?
How to book hotels in Guzhen?
Conclusion

Where is Guzhen location?
Maybe you have hear Guzhen before.But many clients are not visit Guzhen before.
Guzhen town is located in Zhongshan City,Guangdong Province.Lighting industry is the leading industry of the town.Guzhen is famous as “Lighting capital in China”.
Guzhen is not only the biggest wholesale lighting market in China but also the biggest led light production base and the biggest manufacturing base in China.
From the map,we know Guzhen is near Guangzhou,Shenzhen and Hongkong.It is convince for client come to Guzhen from all over the world.

Zhongshan, Guangdong Province, some 23 kilometres (14 mi) from the city center.

The town is most well known for manufacturing all kinds of lighting. In recent years the town has grown into a place with thousands of small and big factories all related to lighting in one way or the other. Many international lighting companies have factories and showrooms in Guzhen town, which is about one and a half hours drive from Guangzhou Baiyun International Airport. If you are coming from Hongkong, it will take 2 hours to reach Zhongshan ferry terminal and another 30 minutes to Guzhen Town. The population of Guzhen Town is estimated at 75,000 permanent residents with a floating population of up to 30,000.

Lighting industry
Dubbed China Lighting Capital by the China Light Industry Council and China Association of Lighting Industry. Guzhen is the largest production base of lighting fittings in China and one of the four largest lighting fitting distributing centers in the world. In 2001, lighting fittings produced in Guzhen made up 60% of the Chinese market with exports reaching $1 billion. The production of lighting fittings is the primary industry in Guzhen, accounting for nearly 88% of the town’s industrial output.

The development of the lighting fittings industry in Guzhen can be traced back to the late 1970s, however, the first significant developments took place from the mid-1980s to early 1990s. Due to the rapid economic development of China Guzhen’s lighting fittings industry has undergone unprecedented growth in the past two decades.

Guzhen’s growth at the turn of the millennium was unprecedented, boasting a 50% increase in lighting enterprises from 1999 to 2001, with exports increasing from $40 million to $250 million. In the year 2013, total exports for lighting items from Guzhen Town exceeded $1 billion, as per unofficial sources.

While Guzhen now primarily produces non-branded OEM goods for international companies, it has spawned some domestic players in the industry, such as: Huayi, Opple lighting, Senqiu, and BECO Lights.

To quote price, the shops normally use meter for woven fabric, kilogram for knitted fabric, yard for lace, pu leather, faux suede…, quite complicated in Zhongda Fabric Market.

Fabrics are available for wholesale or yardage cut, the shops quote price for full roll but if you buy less, don’t forget to ask “retail price” which is more expensive, especially for knitted fabric, they quote price per kilogram for wholesale and meter for retail, price for the latter can be doubled or tripled as Zhongda is a fabric wholesale market. Some knitted fabric from big suppliers, you can buy a few meters as sample but don’t expect them to retail, better to ask the possibility if your order is less than one roll.

There is basic information such as item number, composition, textile width, thickness on the color chart, if not, you can ask them to write down everything, price of course.

Negotiation is not necessary unless you are buying in big quantity, they quote what they want to offer. But there is a possibility you find same fabric cheaper price in another shop, such as you visited A first, and B give you better price, actually A also get fabric from B, that’s rare but can happen.

Except the free color chart, that’s a good idea to buy samples for your favorite fabric or garment accessories, you can pick up samples immediately or in a few hours to a few days.

Quantity in stocks changes every day, most fabrics and clothing accessories are available but some maybe discontinued and need to be produced. For anything you want to order, ask them the situation.

Take pictures in case you want to recall a special shop or items if not swatch type, put a name-card while photo-shooting, and ask them to cut a small piece sample with name-card attached, no matter it’s fabric or lace trim something,

Don’t arrive too early, most shops work during 9:30am~7:30pm. Better to work together with a fabric sourcing agent in Guangzhou, they can guide you inside the huge wholesale market, help you with interpreting, sourcing, inspection and shipping.

Know about the shortage, that’s a typical phenomenon in this market no matter for textiles or garment accessories, especially for knitted fabric, but not always necessary to ask unless you are placing an order, your time is valuable as a traveler

When importing products from China, it is important to understand import duties, customs fees and clearance documents. As an importer, Chinese manufacturing is a good choice for many products that can be sold locally or online and reap huge profits. Tariffs depend on the products and commodities you import from China to the United States, which makes the entire international trade process for new importers seem complicated. This article will help you understand the tariffs on goods imported from China to the United States and how to check each product tariff. Let us delve into the import tax from China to the United States.

As a new importer, you must be aware that US Customs imposes tariffs on all imported goods valued at $800 or more. Values below $800 are tax-free. However, since June 30, 2018, the United States has increased the tariff on China’s 50 billion goods by 25%, which has increased the cost of American consumers.

This article will let you learn more about import tariffs and customs clearance issues.

Trade tension between China and the USA has escalated since Trump raised tariffs on US$200 billion of Chinese imports and threatened to impose on another US$300 billion. Millions of people and companies with import and export business have been impacted due to the increased import duties. 

How big is the real impact on your business line? Is your product hit with the additional 25% tariff? What’re the customs duty rate? How much will you pay? Can you still afford to import from China to the USA? You may have lots of similar or other questions struggling in your mind. 

After reading this article, you’ll be able to measure the impact in figures, know what import taxes you need to pay, and how to calculate it on your own so that you can decide whether to continue sourcing from China or buying locally or elsewhere. 

According to our experience, for small and medium-sized businesses, if you are not purchasing containers of goods at one time, the impact of increased tariffs may not be as big as you might think. Now let’s dive into below article to have a reality checking. you need to pay for imports from China to the USA?

• Under which condition you need to pay for imports from China to the USA?
• What is the US import tariff rate for imports from China to the USA?
• How to check the US tariff ?

1. Under which condition you need to pay for imports from China to the USA?

Basically, for any goods coming into the United States valued at or more than $800 are subject to import duties or customs duties. Import duties are the major part of import tax an importer has to pay to US customs. The rates of customs duties are either specific or on ad valorem basis of the value of the goods, dependent on the H.S code of the product and country of origin. 

Since February 24, 2016, former U.S. President Barack Obama signed the Trade Facilitation and Trade Enforcement Act of 2015, which will increase import tax exemption from 200 U.S. dollars to 800 U.S. dollars, The act was implemented by the United States Customs and Border Protection Agency on March 10, 2016. The amount of tax exemption means that the goods that meet the conditions are less than the stated dollar amount of USD 800, and can be exempted from making customs declaration without paying customs duties or taxes. This means that most goods shipments of less than 800 U.S. dollars will be exempt from customs clearance and import duties.

This move not only motivated the US consumers but also inspired a lot of e-commerce sellers to consider shipping with express delivery. However, the exemption rules are conditional and exceptional, and under the United States Customs regulations (U.s.customs regulation 19cfr10.151), the goods subject to this exemption need to meet the following requirements:

(1) The goods must be imported by the same person on the same day.

(2) Consolidated goods delivered to the same final consignee will be treated as one-ticket imported goods (ie, the same person importing several goods on the same day plus a total of more than $800 is not tax-deductible)

(3)Alcoholic beverages, alcohol-containing perfumes (unless the total fair retail value of the country of shipment of all goods does not exceed $5), cigars or cigarettes cannot be exempt from taxation.

If the Customs considers that the goods are one of several batches under a single order or contract and are shipped separately for the purpose of free entry (tax exemption) or to avoid compliance with any relevant laws and regulations, this situation cannot be exempted tax. Goods that are part of a tariff quota cannot be tax-free (for example, products that are tariff quotas cannot be exempt from taxation). Goods that are regulated if one or more of the cooperating government agencies require information are not exempt from taxation (for example, goods subject to FDA regulation are not exempt from taxation).

Even if you declare less than $800, US Customs still has the right to request a formal customs clearance. As long as Customs suspects that the low value of the shipment is to avoid compliance with certain relevant laws, the goods may be denied a tax exemption. Also, if you are declaring less than $800, but US Customs suspects that you have deliberately underreported and a re-evaluation of the goods is done, if the valuation is higher than $800, then it is still taxable.

There are other additional but relatively small import taxes and fees such as Federal Excise Tax for particular items such as alcohol, tobacco, etc, Merchandising Processing Fee (MPF), and Harbor Maintenance Fee (HMF). 

All imports both for informal entry and formal entry are subject to MPF fee, based on an ad valorem fee of 0.3464% of the goods’ value. But it has a fixed range from $26.22 to $508.70, indicating both the maximum and minimum fee you need to pay. If goods are shipped by sea, you’ll also need to pay HMF fee, an ad valorem fee of 0.125% of the value of the merchandise. HMF is not collected on shipment transported by air.

2. What is the US import tariff rate from China to the USA?

US tariffs are a problem that every Chinese-to-American express parcel cannot avoid. US airfreight and US shipping will have US tariffs, with a minimum of 30 USD and no limit. Goods value below 800USD is duty-free. Of course, there are also many customers who choose to use the US express channel to avoid tariffs.

(1) Tariffs for clothing products (cotton category: 16%).

Customers who have worked in the apparel industry know that the tariff classification of clothing is simply too much. It is possible to have clothing of the same style, different materials but the tariffs will be different. There are also gaps in the tariffs for men’s wear women’s wear and children’s wear, there are also gaps between formal wear and casual wear, and there are also gaps before the different tariffs on apparel fabrics.

(2) LED product tariffs (LED lights: 3.9%).

LEDs may not be as diverse as the classification tariffs for clothing products. The tariffs on LED lamps are generally 3.9%, but the tariffs on LEDs are different from the tariffs on LED lamps.

(3) Tariffs for furniture products (furniture: 1%).

Furniture is also a relatively large proportion of China’s exports to the United States. The tariffs on furniture products are, generally around 1%. However, sometimes there are products related to anti-dumping in the furniture, anti-dumping duties will be as high as 227%, such as the bedroom bed.

(4) Tariffs for solar products (anti-dumping).

At present, solar energy products are in the anti-dumping stage in the United States, so many customers who export such products are discouraged from seeing this high anti-dumping tariff.

3.How to check the US tariff?

1. The US tariffs are very detailed. Open the US import tariff website: https://hts.usitc.gov/. Enter the product name After entering the website, then click “Search” or enter the first 4 digits of the HS code or 6 digits.

2. Enter your product name to view the import tariff (Rates of Duty)

What are the meanings of 1 and 2 of the US import tariffs?

1. The “General” in Tariff 1 is the tariff from most of the world’s imported products (Chinese products apply this tariff rate)
2. The “Special” in Tariff 1 refers to tariffs with the United States from imports from countries with relevant FTA countries.
3. Tariff 2 applies to tariffs on imports from special countries that have no trade relationship with the United States (Cuba and North Korea)