China virtual assistant|# 1 china sourcing services for importing Building Materials From China
Most home builders find importing materials from China a good idea. These wholesale building materials are taken in at very cheap prices to be used by construction firms and a number of US retailers. A lot of industries today are making really good business coming from their deals with building materials suppliers in China. Such success has contributed to increased demands for an outsourced home building materials company overseas. As a China virtual assistant, my companby and team can import materials from China for your business
The growth of China as a manufacturing and outsource powerhouse has grown incrementally through the years. About 25 years ago, China’s share in the global manufacturing output was at 3-5%. Today, half of the world’s goods come from Factory Asia. Name any product in any industry. Name any international brand. There’s a high chance that China has something to do in its production, one way or another.
The same can be said in the home building materials supplier industry. If you look at every corner of your house, you’ll surely find an item or structure that came from China. That is how lucrative the business of importing wholesale building materials from China is. However, there are a lot of factors and situations to consider if you are planning to start a wholesale business of importing building materials from China.
We have come up with the most comprehensive and complete guide for home builders on finding a building materials company and buying their wares at wholesale prices. We will also help you by sharing some trade secrets on how to get the best deals through the best places and methods like online sourcing, hiring a broker, and solving issues. Our guide is also a go-to source for those who want clear information related to documentation, importation, and solving the common problems and challenges one may face in the home building industry. We’ll show you how to import building materials from China.
1.1 What makes China the best source of imported home building materials?
China is the largest country traders from around the globe import from. Wholesalers and retailers of building materials in the US alone have established connections with corresponding wholesale building materials suppliers from China in the production of their privately labeled products.
There are four main reasons why sourcing building materials suppliers from China is preferred by many businesses:
1.2 Terms in International Trading and Manufacturing
International Commercial Terms, or generally known as Incoterms® is the universal language used by importers and exporters around the globe. Governments and legal authorities have also adapted the Incoterms® to reduce and avoid uncertainties and misinterpretations when it comes to international shipping transactions.
The following Incoterms below are usually used in transactions between a US trader and a building materials company from China:
FOB
FOB stands for Free on Board. FOB is the most commonly used type of agreement. Exporters and importers regard this kind of agreement to be fair for both parties.
FOB can be simply explained like this:
The building materials supplier is solely responsible and liable for goods until it is received by the carrier on a designated location to be the point used in shipping from China to the US. From then onwards, the responsibility and liability transfer to the buyer.
There are also two subtypes of FOB: the FOB shipping point and FOB destination point.
FOB shipping point means the responsibilities and liabilities of the supplier ends once the shipment leaves the dock and heads to the US.
FOB destination point means the responsibilities and liabilities are transferred to the buyer once it arrives at the port of destination.
This type of agreement is only applicable to transactions that are using the sea freight shipping mode.
EXW
EXW (Ex Works) type of shipping is an agreement in which the buyer arranges every step necessary for the wholesale building materials’ shipping from China to the USA. The only advantage for buyers that we can think of is they have complete control of most, if not all of the processes involved.
Manufacturers love this form of agreement. The seller is only obliged to help get an export license and Certificate of Origin. The procurement of other documents falls in the hands of the buyer. EXW is not that popular and is rarely used alone. It is usually combined with other Incoterms for parties to arrive at a better and fair agreement.
However, using a freight forwarder to handle the steps in the shipment process while using EXW could be beneficial for the buyer. Check out our steps on how to import building materials from China below.
BOL (Bill of Lading)
The Bill of Lading is a document between the shipper and carrier that acknowledges the receipt of cargo for shipment. The BOL is an absolute requirement before the wholesale building materials’ shipping can come into fruition.
International laws such as the Hague Rules, Hague-Visby Rules, and Hamburg Rules require the carrier to issue a BOL stating the details of the cargo such as nature, quantity, quality, and leading marks.
To be specific, these are the details mentioned in a BOL used in shipping by building materials suppliers in China:
Content and classification of the shipment (tiles, steel frame, insulation)
Type of inner packaging (boxes, crates, drums, sacks or rolls)
Outer packaging
Prominent markings or characteristics of identification
Type of transportation used
Specific handling instructions
Weight and volume of the cargo
Details of the shipment’s journey which includes:
Brokers and agents can also help in getting this legally binding document. Thus, they are also included in the BOL outline whenever applicable. In some instances the key players below may be included in the BOL:
Shipper and consignee of the cargo
A carrier who issued the Bill of Lading
Origin freight forwarder
Arrival agent or destination freight forwarder
Freight payer
The advancement of technology and easy internet access has created the option for any building materials company to use paperless BOL for shipping negotiations. Also called Electronic Bill of Lading, this digital document is commonly used today as it has the very same functions and legality of a paper BOL.
MOQ
Minimum Order Quantity is an Incoterm that refers to the least amount of units, in this case, wholesale building materials, the manufacturer or supplier is willing to produce at one time. The building materials company set this type of agreement to cover the costs during production and ensure profit is made with every production run.
Every supplier may have different MOQ. The minimum order quantity range from 10, 50, 100, to 100,000 —all depending upon the type of wholesale building materials and production processes involved. MOQs can also be defined by the currencies like “$10,000 worth of products”.
The importance of MOQs lies on the fact that both building materials supplier and the buyer can determine and agree on how much units are needed in order for both parties to start talking about doing business together. Some businesses operate on a small scale and need building materials suppliers who are willing to provide in small quantities. There are also big volume buyers who are seeking for a building materials company that have the capacity, materials, equipment, and personnel to handle such demands.
OEM
OEM is the acronym of Original Equipment Manufacturer. Its actual definition may be a bit vague but it basically states that one company can sell products, parts, and equipment made by another company using the former’s brand.
The purchasing company is enabled to obtain its needed product without the need of owning and operating the manufacturing company. Moreover, OEM relies on their ability to drive down the cost of production through the concept of economies of scale.
Product Sourcing Agreement is another term used for OEM. The OEM is composed of several other agreements related to IP security and manufacturing outsourcing. It is also used to clarify some very important components in the deal with the building materials supplier
Items that are at least included in an OEM include:
IP ownership
Product quality
Timeliness of production
Ownership of Mold and/or Tools
Non-compete, non-circumvention, non-disclosure, NNNs
Sub-supplier/sub-contractors involved
Liquidated damages, in cases of breaches
CIF
A CIF or Cost, Insurance, Freight type of agreement solely places the burden on the supplier. The building materials supplier covers all shipping costs from China to the US, plus insurance.
Both parties shall agree on whether the delivery ends at the point of destination or at the final delivery address. The buyer is responsible for paying the costs once the goods arrive at the point of destination though.
The CIF agreement is much more expensive compared to the FOB as building materials suppliers add a premium charge to compensate for their efforts.
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