Do you speak Mandarin or another Chinese dialect? Do you have connections in Shenzhen? Maybe you simply love Chinese culture. In the import/export industry, you can use your own interests to help match product manufacturers with markets. If Chinese businesses want to export their goods, you help them find buyers. If they’re looking for specific merchandise, you help them find sellers.
With dedication and this guide, you can become a part of the estimated $72 billion in goods and services traded between Canada and China.
Although there’s a bit of variation, import/export businesses usually fall into three main categories.
Export management company
If a company in China wants to export electronic equipment, for example, an export management company (EMC) would be the one to help. An EMC takes care of all the finer details involved with shipping goods overseas. This could include hiring distributors, creating marketing materials and preparing shipping logistics.
Export trading company
An export trading company (ETC) finds out what foreign buyers want and then locates domestic companies that can export the goods.
Import/export merchant (or free agent)
Import/export merchants buy merchandise from a manufacturer, foreign or domestic, then resell it around the world. They’ll generally have no specialty in an industry. It’s often a high-risk, high-reward scenario.
How to find your target market
Once you’ve decided on what type of import/export business you’re interested in, it’s time to figure out your target market.
By focusing in, you can focus your attention on a market you can serve best. Think about:
Who are your customers?
What parts of the world are you targeting?
What types of goods will you offer?
Take the time to be as thorough as you can with your market research, as it’ll pay off in the long run.
Your target customer will be someone who wants to trade globally. They’ll either want to sell goods overseas or buy goods from international sources.
Beyond that, you can choose any type of customer you wish. Maybe you’ll cater to companies that sell China’s number one export, electronics. Or perhaps your interest lies more in medical equipment.
As soon as you identify a need, you’ll be able to target a group of companies as customers.
China’s top 10 exports
Office machine parts
Source: The Observatory of Economic Complexity, 2016
Permits and licences
Before importing machinery into Canada, you will need to obtain a Business Number (BN) issued by the Canada Revenue Agency (CRA) for an import/export account. This account is free of charge and can usually be obtained in a matter of minutes.
Many goods are subject to the requirements of other government departments and agencies and may require permits, certificates, and/or inspection. You might like to authorize a Licensed Customs Broker to act as your agent to help determine your tariffs and make sure that you have the appropriate documentation for your imports.
To export goods from Canada, you’ll need to have a business number with an import-export account. You may also need to complete a Canadian certificate of origin and apply for an export permit to get your goods across the border.
Your next step is to figure out the appropriate tariffs for your goods (according to the Harmonized System (HS codes) or the Canadian Tariff Classification Number) and report your exports to Canada Border Services Agency (CBSA). If you don’t follow the proper steps to export goods, you may incur stiff penalties from CBSA.
For many years, the Chinese government limited the number of companies able to import goods into the country. Since China’s acceptance to the WTO, you need only register with the Chinese Ministry of Commerce.
Contact a professional to learn more about registration, tariffs and special trade zones that could affect your business.
What risks are there?
Unpredictable shipping logistics
Getting your goods to their destination safely and efficiently is your number one priority. You’ll be responsible for making sure the product leaves the local port and arrives on time, as well as damage to the cargo. Staying organized and partnering with a well-known freight forwarder can help with this.
Not doing enough market research
It’s a good idea to thoroughly research a market before entering into this business, though even that may not be enough.
Consider hiring an expert who understands your specific market. This is important, as you’ll need to sell products that resonate in countries you’re unfamiliar with.
Running into problems at the border
Customs rules vary from country to country. Expect to encounter many different regulations while transporting goods. To avoid drowning in a swamp of border regulations, hire experts in customs law and trade compliance.
You can safely and affordably manage your business payments, with lower fees and stronger exchange rates, by comparing the services of a money transfer specialist. Check out our calculator below to see what fees and exchange rates a range of providers are offering. How to send money to China
Kelly Waggoner is editor-in-chief at Finder US. She's worked with publishers, magazines and nonprofits throughout New York City, including ghostwriting a how-to on copyediting for the Dummies series. Between projects, she toys with words, flips through style guides and fantasizes about the serial comma's world domination.
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