International Trade Agents

Many people believe that they can make a lot of money when they do some international trading business, however, international trade business is not as easy as you think, and international trade is probably not as profitable as you expect.

1. International trade is more complicated because it involved with import and export, international shipping, language and culture barrier, international payment. There is import or export duty that you need to check, some items are easy to import and export, some of them are not. You need good packaging when you do an international shipment, and it takes longer and costs more than domestic shipping, if you don’t speak your trade partner’s language or your trade partner’s language, you might need a translator’s help. International payment transferring might cost you some fees as well, and there is limit to transfer the payment crossing the borders, for example, Paypal charge you 3.9% + fixed amount per transaction, Western Union charges you with a fixed amount which is quite high, and there is a limit for cross-border transaction.

2. International Trade is not as profitable as it used to be because of the Information Technology, it is much easier nowadays to find leads, easy to find your international trade partners. There can be less or no middle man in between you and your trade partners because of websites. Many suppliers from China can easily set up an account on Alibaba, and there are so many competitors on Alibaba, they have to lower their profit, so some prices that you see on the website are actually too low, sometimes they are even lower than the local prices, because they want to attract the customers to send them inquiry. And eventually you will find out that the lowest prices always have some problems.

3. Many people have a wrong consumption that if you go direct to the manufacturers of product, they can get a better deal, well, this is a wrong idea, with the Information Technology, there is no difficulty for the manufacturers to post their information online, and you will have no problem to find them, however, some manufacturers don’t want to deal with every customer, they just want to deal with a few big distributors or trading companies, because they don’t have much time or they don’t want to focus on customer services and international trade, it is much easier to sell to a few big distributors and pass the customer leads to their distributors, when they receive a new customer inquiry, they just give it to their distributors. If you are new in international business, it is better for you to start dealing with those “middle men” because they give you better customer services and they are willing to sell to you in a small quantity, when you are set up with your sales channels and you can handle in big volumes you can start to talk to the manufacturers.

To avoid the middle men and still want to get the services provided usually by the middle men, you need to have an international trade agent who can provide you services like import and export documents, international shipping, translation, and cross-border payment handling, then you can deal directly with the manufacturers if your MOQ meet their requirements.

What are the business models in China?

We, as interpreters and consultants, in a very important position of your business model, will help you achieve your target in a very effecient way.
Here are some information provided by a local consultant who is very experienced in international trade.
There are many suppliers on Alibaba, however you don’t know whether there are manufacturers or not, maybe they are traders, you just don’t know, how do you tell a manufacturer from a trader?
Here is a simple tip, look at their address, if it is located in the city area such as Futian, Luohu and Nanshan district, and they don’t have any other detailed address, most of the time, they are just traders, as the factories can’t be located in the urban area, sometimes some suppliers claim that they are manufacturers and even put both their office and factory address on the website, however their factory addresses are either not detailed, or do not exist at all, you can’t find it at all.
So you might want to tell your friends that they are liars, you can do that, however, I would say this is a very popular business model in China, as you know it is quite expensive to run a factory with those production lines, SMT machines, injection machines and employment of so many people, and it is not so easy to fulfill the capability of a factory unless you can give them some very big orders such as 30K to 100K sets per month. Because of reasons listed, the factories will try to get orders from different sources, such as the local traders. And the traders need to partnership with these factories too, in fact, they act as the factories’ sales departments.
Some people want to be self-employed, because they don’t want to work in any company, so they set up a company with a HSBC bank account, and they pay to be a member on Alibaba, from where they can get a lot of inquiries, and they claim that they are the manufacturers which they are not but partnership with them.