Importing from a wholesaler overseas is often a superior strategy for getting goods very cheaply. Let’s face it, many of the products you are going to sell come from Asia–and the closer to the source you get, the better your wholesale price. You may get a product from a stateside distributor at what seems like a good price, but where is that distributor getting it from? Either from another distributor in Asia, or direct from the manufacturing facility. Now I’ve always advocated just going there yourself to examine and select the products in person, and then arranging shipping directly, but that is admittedly a major task, and it probably takes some foreign language skills, and believe me, languages like Thai, Mandarin, Cantonese, or Japanese are notoriously difficult to learn.
Either way, it pays to understand the shipping terms. It may well be that although you would get a better wholesale price from the Asian source, your overall cost–including shipping–may still be cheaper if you have a distributor close to you. Here’s the first thing to know: Suppose you buy a shipment of items from a source in Asia, and the terms specify “FOB Hong Kong.” That means the source is responsible for getting the goods to the port in Hong Kong, but from that point, you’re responsible for the rest of the costs.
The second thing to know is that shipping costs aren’t just what you pay the shipper. There may also be a customs tariff due upon arrival, as well as a customs bond, cargo insurance, and a clearance fee. there may also be an additional “last mile” fee involved. Where is the nearest port to your home or office? Sea freight comes into the nearest port. Your shipping fee may cover the cost of shipping from Hong Kong to San Francisco, but your office is in Nevada–so there’s an extra fee for shipping it over the last leg, unless you want to make the trip to the port and pick it up yourself.
When you calculate it all out, you may still be better off paying a slightly higher price to your stateside distributor, as opposed to going direct, especially if you are buying in smaller quantities. On a per-square-foot basis, shipping over a couple boxes from Taiwan or Bangkok is a lot more expensive than shipping an entire container load. Your distributor is getting an economy of scale on shipping, more than likely bringing items over in large containers, and as a result they don’t have to add on as much to the price when they sell it to you. Shipping cost per item may be several times more for you, if you’re just buying small amounts.
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