Buying from China ? Last week at the Pesa conference we met an interesting group called Alibaba online. It’s an interesting gateway to connect with suppliers ( mostly located in China). If you are interested in sourcing product from China this is a very interesting website to visit. If you are buying from China in most cases you must buy a run or a batch minimum quantities. Shipping is usually on FOB terms meaning that the supplier will get the container to the port then you are responsible or the freight then the local clearance duties and taxes when entering Australia. Generally you can ask the suppliers how many units they can fit into a 20 foot container or a forty foot container. If you are buying product that is reasonably small then you can always ask your local freight forwarder for an LCL price. LCL is also known as less than a container load. Buying less than a container you are charged by the cubic meter. You just get so much more value for money if you purchase a whole container worth of space, that is if you can maximize the packing. That’s why it is good to negotiate how many they can actually fit into the container when you are working out how many to purchase from the supplier.
Example product review – Just say you were looking into purchasing a fishing kayak. You could fit approximately 45 into a 20 foot container from China. When negotiating you could work backwards by requesting how they pack. Manufacturers in China are very good at packing the containers and will do their best to sell you as many that can possibly fit. So it is a win win situation as they want to maximize the sale and you want to maximize the space in the container. Importing is relatively easy however you must be sure you understand the import restrictions including the duties payable and the Goods and services tax applicable for entering into Australia.
What is a 3pl ? If you are thinking of a whole container load you may be wondering where am I going to store all the product. If you don’t have a warehouse or a store there are still options available to you. Have you heard of a 3pl or a pick pack operation? This is where you hire or lease space within an existing facility. 3pl stands for third party logistics and there are operations in Australia that deal specifically with eBay or online retailers. They are a fairly cost effective solution to warehousing as you don’t need to worry about building overheads, staffing overheads and all the other hassles. Most importantly you can have a 3pl operation in a metro area reducing your freight costs and potentially bringing you closer to the customers, depending where you are. Karlie rocks