As an experienced importer, Brendan Elias has learned a thing or two about how to source products from China and sell them for a healthy profit.
Speaking at Business Blueprint’s 15 year anniversary conference, Brendan shared the top factors to keep in mind if you want to succeed in this industry.
Take a look at the highlights from Brendan’s presentation:
Importing successfully requires patience & persistence
First things first, Brendan explains that in importing, as with most areas of business money comes to people who are willing to handle headaches. Many people try importing once, get it wrong and back away from the idea, but it takes time to learn and improve.
Choose the right niche
When it comes to selecting products to import, Brendan recommends focusing on a specific niche rather than trying to be a jack of all trades. Find a “quarter-inch-wide, eight-miles-deep” market – something like electric leaf blowers, for example. This allows you to build a range of related products and own that space.
Brendan recommends avoiding very low cost items and advises sticking to consumable and business-to-business items, rather than trying to reinvent the wheel with custom products that don’t have an established customer base. The key is to find a proven market, then put your own spin on it through branding and design.
Be selective with suppliers
Once you’ve identified your product niche, it’s time to start sourcing suppliers. As an expert in the industry, Brendan has learned to carefully vet potential factories and vendors – this helps weed out the ‘dodgy’ operators who pretend to be a factory but are more like middle men who add massive markup.
If you’re new to the game of importing, Brendan suggests you try using a sourcing agent who will act as the ‘bridge’ between you and your supplier. These experts have excellent connections and understand the industry.
When choosing a supplier, be very clear on your product specifications, from materials and colours to packaging requirements. And always ask for samples – this is crucial for ensuring quality. Remember, the production run will always be worse than the “golden sample” that you look at first, so set your expectations accordingly.
Negotiate like a pro
Negotiating with overseas suppliers is an art form, but there are a few tricks. Brendan eliminates the 50% most expensive and 20% cheapest options, then focuses on the middle-of-the-road suppliers who have experience shipping to Australia.
When it comes to pricing, he aims for a 5% discount on the initial quote. He adds, “If you’re placing a larger order, see if you can get a credit for the sample costs off your first shipment.”
Think about quality and delivery timelines
Product quality and on-time delivery are critical, so Brendan includes strict penalties in his purchase orders. He says, “If the goods are late, the supplier loses 1% of the total for every day they miss the deadline. And I’ll reserve the right to cancel the order altogether if it’s more than 10 days late.”
Brendan’s advice is to pre-order key components to ensure a steady supply and avoid production delays. He also reminds buyers to be aware of the things that can cause delays, like Chinese New Year when a lot of people stop working for a few weeks, power issues at the factory etc.
Leaving room to accommodate unexpected setbacks will help you avoid the stress of a late delivery.
Shipping and logistics
Some of your goods will come by sea and others by air. Brendan takes a split strategy where he has a portion sent by air to meet urgent customer demand, then has the rest shipped by sea. This helps maintain customer satisfaction without blowing the budget on air freight.
Cultural differences and perspectives
Different people have different ways of doing business and different perspectives. As Brendan explains, you will need to learn to be highly specific and double check that people truly understand what you want.
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