How To Import Products From China To South Africa - International Trading Guide

Source: DHgate, Tag: E-Commerce Tips

A trader guide that describes how to import products from China to South Africa is probably the most important thing a new trader needs to be successful.

• The trade of goods between China and South Africa is a great business opportunity. Many South Africans and business people want to import goods from China in order to profit from the large market that has developed in South Africa over the past few years.
  Many Chinese traders want to export their products to South Africa. There are many importers who have tried their hand at importing goods. However, they have all failed miserably because they did not follow the right procedures. It is important that you have a very clear idea of what is required to import goods successfully especially if you are new to this trade. The following guide is meant to show importers how to import products from China to South Africa.

• Step 1: Select Products to Import
  The first step in how to import from China to South Africa is deciding what products you want to import. Selecting the right products to import from China is one of the most critical steps in importation. The success or failure of your business depends on this step. In many cases, new importers go wrong with this step, and it results in huge losses.
  The best way to decide on this is by carrying out market research on the products that are in high demand in your target market. You can do this by visiting retail stores or shopping malls and seeing which items are selling fast and at what price range. You can also consult seasoned importers or product sourcing experts who can advise you on the trending products and potential suppliers that you can work with.
  Once you have done your research, you need to decide whether to import a finished product or manufacture it locally after importing all the components. If you are starting out, it would be wise to start small and choose finished goods since they have a lower risk than manufacturing locally after importing components.
  When deciding on what to import, choose products with the following attributes to maximize your profit margin:

  • A high-profit margin (the difference between the wholesale and retail price). Low risk of damage or theft during shipping. A low import duty rate.

  • A high demand. If you choose products that are in high demand, you will be able to sell them quickly at a good price. You can use Google Trends to research the demand for different products in South Africa and China.

  • Low risk of becoming obsolete or going out of fashion during the time it takes to import them.

  • Low shipping costs. In most cases, you'll use air freight or sea freight, with air being more expensive (but faster).

• There are some other factors to be considered when choosing the products besides these important attributes.
  Permits and Licensing
  There are no specific licenses required on products imported from China to South Africa. However, some products may need additional permits from various government bodies in order to meet the country’s safety standards. The type of permit required will depend on the type of items one intends to import.
  For example, if you want to import vehicles, you will need a permit from the National Regulator for Compulsory Specifications (NRCS) and the Department of Trade and Industry.
  Also, a person who is importing food or beverage will need a health certificate from the original manufacturer. On the other hand, those who are importing pharmaceuticals need a license from the Medicines Control Council (MCC).
  However, there are products that require no permit at all. Some of these items include:

  • Clothing

  • Footwear

  • Jewellery

  • Toiletries and cosmetics

  • Furniture

• Import Taxes
  Before involving yourself in the China import-export business, you need to consider the taxes that apply.
  Import taxes in South Africa vary depending on the country you are importing from and are based on a cost, insurance, freight (CIF) value. The CIF value of your product is determined by adding up the cost of your product, plus the cost of shipping and insurance.
  The current tariffs that apply in South Africa are as follows:

  • General rate import duty – 7%

  • Preferential rate import duty – 0%

  • Specific rate import duty – variable

• Step 2: Find Suppliers
  Once you have a good understanding of what it is you want to sell, the next step is to find Chinese product suppliers who can provide the products you want. There are a number of ways you can find Chinese suppliers:

• Wholesale directory easiest way to find suppliers is by using a wholesale directory. This can be especially useful when first starting out as it helps you quickly find a supplier without having to do much searching yourself.
  A wholesale directory is basically just a list of wholesalers and manufacturers that sell their products at wholesale prices. Some directories will let you search for suppliers according to specific criteria such as what type of products they sell or where they are located.
  Many buyers prefer using trade directories like Global Sources, which lists verified suppliers in China. The directory also has search tools that you can use to find specific products.

  • Trade Shows and Fairs

• Trade shows and fairs are good places to find suppliers. Chinese trade shows have been getting popular in South Africa and there are several of them throughout the year. The Canton Fair is held twice a year in Guangzhou and it is the largest trade show in China with many types of products. You can also find other kinds of trade shows like furniture or textile trade shows. You can search online for upcoming trade shows.

  • Business to Business Online Platforms

• The internet offers many resources for finding Chinese product suppliers as you can use B2B and business to consumer online platforms. One of the top online marketplaces to look for suppliers is DHgate.com, which is one of the world's largest B2B wholesale marketplaces. The online marketplace lists Chinese wholesalers and manufacturers that offer products in a wide range of categories. Its search feature lets you filter results based on product type and price range.
  Once you've narrowed down the list of potential suppliers, contact them via email to ask questions and request quotes.

  • Ask for Recommendation

• You can be lucky enough to find a supplier by asking for recommendations from your friends. In most cases, though, you will need to do some research to find a supplier.

  • Import Records

• You can search for suppliers by seeing who sold certain products to importers in your country. There are various websites where you can check the import records and find suppliers. These websites include customs databases, trade show databases and online directories.

  • Trade Show Websites

• Most of China's famous trade shows have websites that list all their exhibitors with their full contact details and product catalogue pages, so you can easily view their product range and contact them directly to discuss business.
  Step 3: Purchase Products
  Now, the next and probably the most important step is purchasing the items. The process of purchasing products is where most importers make mistakes. It would be best if you were very clear on your requirements and the expectations you want your supplier to meet.
  When making a purchase, it would help if you stated the following things:

  • Your needs

  • A clear description of products

  • Quality standards and safety requirements

  • Packing and labelling requirements

  • Required lead time for delivery (if you have any deadlines)

  • Inspection procedures

  • Mode of payment

• If you haven’t worked with the supplier before, you need to know what payment methods they accept and also confirm if there are any additional charges for the transaction.
  There are several payment methods that you can use when purchasing products from China. The most popular ones include:

  • T/T (Telegraphic Transfer) – This is a common method of payment used when importing goods from China. It offers both importers and exporters a secure payment option and is often used for high-value transactions. However, this method may take longer compared to other options.

  • L/C (Letter of Credit) – L/C is another common payment method used when importing products from China. It provides security to both importers and exporters but it comes at a cost. An L/C may also be difficult to get because of its stringent requirements which makes it less attractive for importers who want to test the market first before investing in large orders.

  • Western Union – This is a convenient way of transferring money between people who live in different countries. You can use Western Union to pay for goods from Chinese suppliers but it should only be used for small orders.

• When everything is all set and look good, you can now place your purchase order by following these steps:

  • Confirm the order and price with your supplier.

  • Be sure to get written confirmation by email or fax that the price is valid for 30 days. This is important because suppliers may change the price due to currency fluctuations or other events.

  • Start by ordering a small quantity, say a few cartons, to test the market.

  • Send a purchase order and ask the supplier to send you a proforma invoice or quotation with details like product description, product specifications, shipping costs, payment terms and conditions etc. The supplier will then send you a Proforma Invoice.

  • Place your order with the supplier after confirming the Proforma Invoice mentioned above and make an initial deposit according to the terms of payment agreed upon between you and your supplier.

• Step 4: Arrange cargo transport
  A guide on how to import products from China to South Africa can’t be complete without knowing how to arrange for cargo transport. DHL, FedEx and UPS are the most commonly used courier services.
  You can also use ocean freight, which takes more time but is cheaper and better for bulky goods. South Africa has three main ports: Durban, Cape Town, and Port Elizabeth.
  It’s important you choose the right courier service that suits your needs. For example, if your goods are less than 500kg, it’s probably cheaper to use a courier service than the ocean freight. Likewise, if you’re importing heavy goods or in bulk, it’s best to use ocean freight transport instead of courier services.
  Step 5. Clear the Shipment through Customs
  After your import goods have been received by yourself or your agent, a clearing agent is appointed to clear the goods through customs. The clearing agent will require certain documents to be supplied to them which are necessary for them to clear the goods through customs. They will use these documents to prepare a Customs declaration which is submitted electronically to SARS.
  From 2016, all importers and exporters must comply with the Legal Compliance requirements in South Africa.
  Here are the steps in Clearing Goods through Customs:

  • A complete, signed copy of the Bill of Lading or Airway Bill (as appropriate) will be required for them to lodge an entry with SARS.

  • The Importer must complete and sign a prescribed form known as an I&E 304 - Declaration in respect of Goods imported from Outside South Africa and Exported from South Africa which must be submitted along with all other required documentation to the clearing agent for them to lodge an entry with SARS.

  • If any other permits are required, such as import permits or export permits, originals must be submitted in order for them to lodge an entry with SARS.

• Frequently Asked Questions
  Which is the Best way to Import Goods to South Africa from China?
  There are two ways to get your products home – through air freight or sea freight. Which option is right for you depends on how quickly you need your order and how much volume you're looking at.
  What are the Main Import Ports in South Africa?
  The main import port in South Africa in Durban. The harbour at Durban is one of the largest in the world and can accommodate container vessels of up to ten thousand TEU. Some importers also use Port Elizabeth as a port of entry, although this is less common than Durban.
  What are the Different Licensing and Registration Processes Involved?

  • There are several licenses required for the process. These include:

  • Customs Registration number

  • Importer Exporter Code (IE Code)

  • Import Export License

  • Customs Registration Number (CRN)

• What is an Importation Permit?
  An importation permit is a document issued by the International Trade Administration Commission of South Africa (ITAC) in terms of the Customs and Excise Act 91 of 1964. The permit allows for the importation of goods that are subject to tariff or quantitative restrictions. The importer must apply for an import permit before importing such goods.
  Conclusion
  We hope that our guide has helped to make importing from China more accessible and inclusive for South African traders. We believe that you now know how to import products from China to South Africa.