There are essentially 2 paths to creating “more money” in your pocket- you either make more or you spend less or BOTH!
I am VERY excited to share about a decision I made that saved me thousands- and will continue to save me thousands every time I make this decision! This could easily add another $20,000 to my yearly profit!
I do my best to diversify niches, products, and suppliers. I currently use 6 suppliers from China or Hong Kong (the rest are from the U.S. or Canada in case you’re wondering). As you’ve probably heard, the process of shipping large quantities of goods from one country to another is called “importing.” When I started out, ALL of my suppliers were U.S. based. The idea of “importing” was quite intimidating to me. I can clearly remember my experience connecting with my first overseas supplier (and as usual, I only pushed myself out of desperation- my U.S. supplier had run out of stock and I needed to find another source). The first thing that concerned me was the supplier asking for a wire transfer of funds. I was so used to dealing with Credit Cards or Paypal that this idea scared me. I heard all kinds of stories about wires being untraceable and people getting scammed. I did the research until I felt moderately comfortable with the supplier and the process and initiated the wire (there are things you can do to “safeguard” yourself, but this is a topic for a post of it’s own)
The next step was deciding how to import. I was hit with questions about seaports, security filing, bill of lading, “FOB” and other terms I had never heard of! I tried to educate myself as much as possible with the information I could find on the internet and ultimately opted for a courier service that I was FAMILIAR with (like UPS, or DHL). I’ve been shipping this way ever since. These couriers generally take care of the customs process for you (though I’ve gotten phone calls and have had to provide information from time to time) and the shipment is quick and fairly painless (most of the time.)
I always knew there was a cheaper option (a LOT cheaper) but it sounded WAY too complicated! The cheaper option is to ship by sea- yup- the goods are LITERALLY “shipped” (on a ship). This process takes a LOT longer, but if you plan right, the cost savings can be massive! I am getting ready to replenish my inventory of the brand I talk about HERE. Since I have recently educated myself on the process by reading “Import Direct From China” I decided to ask for a quote by air OR by sea. Here was the difference:
By air (through courier) I was paying $4,495. At 1000 units, this is adding $4.49 to EACH unit (each costs about $8.00 so this brings me to about $12.49- plus a bit of customs tax. Since my target sale price is $39.99, this is still plenty of profit and I’ve always been happy to ship my products this way… however…
By sea the total is:
…wait for it….
$490! Yes, this is a SIGNIFICANT savings. Now- before you get TOO excited, I did go and hire a company to handle customs clearance and final delivery to Amazon. Those charges were quite hefty! After agreeing to their service, I was hit with total charges of $2,113.18!
So, let’s do the math: $2,113.18 + $490 = $2603.18
$4,495 (by air) – $2603.18 (by sea) = $1891.82 in savings!
I know what you’re thinking… “uh… but wait… this isn’t “over $2000″ in savings!
Here is the best part! I was SO thrilled with the $1891.82 in savings and then I received an email from my supplier saying (paraphrase) “we received a call from the customs broker and we’re confused. They are telling us that they will be handling the shipment, but you already PAID US for this- they only need to clear the shipment through customs!”
I called the broker and confirmed this. This was my mistake since I didn’t completely understand who would be handling the actual shipment. The broker assumed they would be and charged me for it. I was told that the payment will be refunded to me except for what is needed to clear customs and deliver to Amazon. If I’m reading all of the charges correctly from the invoice, this will amount to only $592.19! This means my total savings will be:
($490 + $592.19= $1082.19 | $4495- $1082.19 = $3412.81)
You’ll notice this is SIGNIFICANTLY more than $2000 in savings. However, I don’t know for sure that I’m correct about the amount of adjustment from the broker. They are holding this until the shipment arrives (with my permission) and will refund the difference after everything has cleared. Nonetheless, I think it’s safe to say that I’ve saved well over $2000. If I could save this much 10 times in the year, I would add $20,000 to my profit! It is exciting thinking about the possibilities. I hope this helps give YOU confidence as you start thinking about importing- or even if you’ve already been doing it “the easy way”, to consider shipping by sea!
As I mentioned, the book that really simplified things for me was “Import Direct from China.” I would HIGHLY recommend picking it up if you are thinking of importing. $50 could easily save you $2000 as it did me!
If you want to learn more how I use importing as part of building a 6 figure a year (profit) income, please sign up below for free: