Which Shipping Method to Choose?
Episode #6 of the course Fundamentals of importing physical products from China by Damir Serbečić
You’re halfway through. Today, you’ll learn how to calculate and choose the most appropriate shipping method for getting products from China or any other Eastern country.
Shipping cost plays an important role (usually the 2nd biggest item) in overall cost of goods.
If you choose a shipping method that is not appropriate for your product size and weight, then shipping cost might surpass the cost of the product and make you UNPROFITABLE.
There are 2 main ways of shipping goods from Eastern countries:
1. by air
2. by sea
This is the fastest but most expensive form of shipping.
Choose this shipping method only if a product is lightweight, small, and you need it fast.
Personally, I always use air shipping when entering a new niche, since I want to get up and go as fast as possible, even if my margins are considerably lower. With air shipping, inventory can be available at your destination location in about 10 days, depending on customs and supplier delays.
We can divide air shipping even further into air express (<45kg) and air cargo (>45kg).
Air express is the fastest but most expensive and can be informal if its commercial value is less than $2,500 when importing it into the US. This means someone can clear customs on your behalf without the use of a customs broker.
Air cargo is much cheaper than air express, and it’s always considered to be a formal shipment, no matter the commercial value. This means you’ll need to clear customs by using customs broker services.
Sea shipping is the cheapest but slowest way of shipping. From my experience, it takes between 2 and 3 months to receive goods by sea.
If you sell bulky and heavy products, then sea shipping is your only choice in order to be profitable.
However, in the long run, once you have predictable sales, every product should be shipped by sea!
Every sea shipment is considered to be formal, which means you’ll always require the services of a customs broker.
Okay, enough of the theory! Let’s see some numbers!
Well, not so fast, because there are too many factors involved.
First, you need to know the exact shipping volume and weight.
Second, each supplier has different shipping rates.
So, the best place to start and get a rough shipping estimate is Alibaba Logistics Shipping Calculator.
However, in order to get an accurate shipping cost, you’ll have to ask your supplier for a shipping quotation based on your prefered shipping method and shipment destination. (If you don’t know your preferred shipping method, then ask for both sea and air shipping quotations.)
For sea shipping, make sure you know the name of the destination sea port.
For air shipping, you’ll just need an exact destination address.
Keep in mind that Chinese suppliers usually have much better shipping rates because of the shipping volumes they do. So in most cases, it is cheaper to use Chinese shipping agents. However, always feel free to compare Chinese shipping quotations with shipping quotations from your local shipping agents.
This was an intense one!
Get prepared for tomorrow’s lecture, where you’ll learn about the most common payment methods.
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