There are several things you need to take into account when you’re calculating the cost of importing goods from China. It’s important to get a good idea of what your shipment will cost you before you proceed to avoid any nasty financial surprises. Some of the main factors you will need to consider include the size, weight and volume of your goods, your suppliers shipping terms, the location of the item and where it will be delivered to. It’s also wise to get your goods insured so you’re covered if anything happens to them whilst they are on their way to you.
What are the shipping terms?
It’s essential to check what the shipping terms are when you place your order to import goods from China. The main terms include FOB, EXW and CIF/CFR. FOB stands for free on board. FOB terms mean you won’t have to pay to get the goods on board because the supplier will be paying these charges. However, these charges may be included in the cost of your goods.
With EXW or EX-works, you will be responsible for covering all charges from the moment the goods leave your supplier. One advantage of these terms is that there shouldn’t be any hidden costs. However, it may take longer for you to work out how much the shipment will cost you.
With CIF/CFR (Cost, Insurance & Freight or Cost & Freight) your supplier will pay the cost of getting the goods to the UK, and you will only pay for costs generated once the products have arrived here. With CIF terms, the supplier will also pay the insurance. However, you may find that various hidden costs are included in the final price.
Do I need to pay UK duty and VAT?
You will also have to pay UK duty and VAT on the goods that you are importing from China. The amount of duty you will pay will depend on the kind of goods you are importing. Duty costs can be up to 12% of the total price, and VAT will be charged at the standard rate. This is 20%.
Transporting your goods
You don’t need to opt for sea freight if you don’t want to. Many customers only choose sea freight when their goods are at least 100kg in weight. It can take around 6-7 weeks for your goods to get to you via sea freight. If you need to dramatically shorten the amount of time it takes to receive your goods, you may well wish to choose air freight, though this can cost much more.
Paying for your goods
When it comes to paying for transporting goods from China, it’s wise to shop around to cut the cost, read our blog here on importing goods and cutting cost. There are many currency exchange services around that can offer you much better value than you might get via facilities like PayPal. Our service is 9x cheaper than Paypal for international transactions. By choosing the right service for sending money to China, seek out companies that don’t hide extra charges in the exchange rate.
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