How to Import Electrical Accessories from China to Saudi Arabia?
China is considered by many importers from other countries to be the most suitable country of origin for imported goods based on its large population base, rapidly developing manufacturing industry and relatively mature management system. In 2019, trade between China and Saudi Arabia reached US$61.4 billion, up 32% year-on-year. Whether it is traditional B2B import and export trade or B2C cross-border e-commerce, more Saudi importers, especially SMEs began to pour in. If you are new to importing as a Saudi local, to import goods from China needs to understand the whole process from several aspects such as choosing the right import goods, finding a quality supplier, establishing an order contract with the supplier, shipping the goods back to Saudi Arabia and operating the import customs clearance process. Take the example of importing electrical accessories products, which is not difficult but needs to be read carefully.
I. How to choose the correct goods to import?
II. How to find a quality supplier?
III. How to establish an order contract with the supplier?
IV. How to shipping the imported goods back to Saudi Arabia?
V. How to operate the import clearance process?
I. How to choose the right imported goods?
Electrical accessories are the name of a large category of products, including wall switches, lamp holders, plugs, sockets, cables, junction boxes and so on. As a new importer, it is certainly not possible to import the whole series of products at the beginning. The same is not suitable for importing those products with very strong characteristics and low applicability, which will cause hoarding. So it is necessary to find the most common, but most popular products by the following means.
1. Through the Google Search Engine
Google, as the largest search platform, has a wide range of data integration capabilities and powerful user behaviour analysis capabilities, using it is a good way to analyse user needs.
For example, opening Google and typing in the keyword 'electrical accessories', you will get more precise targeting and more ideas for keywords for this product.
2. Through Amazon Best Seller Categories Tree
The rise of the cross-border e-commerce industry has led many small sellers to become loyal to the model of importing goods from China and selling them on Amazon. The Amazon Best Seller Categories Tree is also a way to identify hot selling products.
3. Through Google Trends
Once you have initially selected the products you plan to import, Google Trends will allow you to see whether the product is trending up or down and to confirm whether the product is popular enough in all your markets.
For example, open trends.google.com and compare three products: extension socket, wall switch and lamp holder.
II. How to find quality suppliers?
1. Find suppliers through online platforms
There are many international wholesale platforms that connect suppliers with global buyers, such as Alibaba International, Global Selling, etc.
There are many international wholesale platforms that connect suppliers with global buyers, such as Alibaba International, AliExpress, etc. Take Alibaba International for example, the world's largest B2B platform and the largest trading site for Chinese products. You can find the best match for your supplier by searching for keywords for your target product and narrowing down the restrictions. Or you can submit a Request for Quotation (RFQ) and suppliers will come to you to negotiate.
Again, with Google as the most resourceful search engine, you can search for a number of matching suppliers using the product keys, domain restrictions, ad filters, etc. You can browse their websites for further information, or contact them directly.
Social media platforms
LinkedIn, Facebook, Twitter and other social media platforms are not only a way to communicate your ideas, but also a way for buyers and sellers to find opportunities to work together. Take SQM (Saudi Quality Mark), which is currently the most widely discussed topic in the electrical accessories industry, as an example. If you search with SQM as the keyword, you can find information about some Chinese manufacturers and products certified by Saudi Quality Mark (SQM). Checking their homepages and you will find a number of suppliers who regularly update their product information and industry-related information on social media platforms.
2. Find suppliers through offline platforms
Attend trade shows
Attending trade shows in China is a more costly, time-consuming but more secure option than communicate on networking. You can communicate directly with thousands of suppliers and see the quality of the actual products. This more direct but most traditional way of doing business is very important for developing business relationships. At the various fairs, you have the opportunity to see many new products and get the most competitive prices, which could become the best-selling products in your country.
Top 9 Recommended Trade Fairs in China
China Import and Export Fair (The Canton Fair)
China Yiwu International Commodities (Standards) Fair
CHINA SHOP (The China Retail Trade Fair)
China Stationery Fair (CSF)
East China Fair (ECF)
Hong Kong Electronics Fair
Asia Outdoor Trade Show
China Electronics Fair (CEF)
China Daily-use Articles Trade Fair (CDATF)
Appointing an agent
As a new importer, if you don't want to spend a lot of money contacting dozens of suppliers, or if you don't know the local market for your industry in China, importing through a trusted agent is another option. The agent you choose can be local to China or local to your own country, but the agent must be familiar with the local market for the target product in China and have extensive supply chain resources and experience in sourcing and negotiating, so that you can make a significant profit after paying the commission.
Go deeper into industry clusters
Attending trade fairs and appointing agents is more for new importers, and some importers with years of sourcing experience can choose to go deeper into the industry cluster. After all, the more direct your source of supply, the more you can save on the amount of difference earned by middlemen and get lower prices. If you find a manufacturer that does not participate in any trade shows and does not conduct foreign trade business itself, but only sells products to trading companies, other foreign trade factories, then you may get a better price than anywhere else if you work directly with that factory.
If you already have some experience in the import trade and are looking for a more competitive price and better quality supplier for your current product line, then in addition to the above you can also consult a third-party conformity assessment body that you have previously worked with. They are often the most knowledgeable about each supplier's factory qualifications, internal management system, product quality and cooperation philosophy. Or if you want to expand your existing product line and purchase other kinds of products, you can also ask the suppliers you are currently working with, to help you find local resources, which will not only reflect your mutual trust but also promote further cooperation
III. How to establish order contracts with suppliers?
1. Supplier confirmation
Once you have made initial contact with some good suppliers, you need to learn more about them, including production qualifications, system compliance, quality control processes, product quotations, etc., to prevent supplier fraud and encounter bad suppliers. In China, manufacturers who have passed the ISO 9001 quality management system certification standard are the basis for cooperation. When choosing the 1-3 suppliers you plan to work with and comparing product quotations, it is generally not recommended to work with suppliers whose prices are significantly below average, as there is no lowest price in China, only increasingly lower prices. The lowest price is always accompanied by a high risk, which could be quality, quantity or reputation. Compare multiple aspects to find a trustworthy supplier for the next step.
2. Sample confirmation
Once you have found a supplier you want to work with, you can ask them for samples of interest. Normally, you will need to pay for the sample or at least the shipping costs. This is a necessary expense as the samples need to be carefully checked for material and quality before you set up a bulk order with the supplier. And of course, it includes some necessary testing to ensure that the product complies with the local technical regulations and certification requirements of the market in which it is sold. If you are not sure about the regulations in your sales market, you can also look for similar products in local shops and see how they are packaged and printed on the market, in addition to consulting safety regulations and consulting a number of agencies. Of course, it would be good if your supplier already has many years of experience exporting to that market. Samples need to be communicated in detail and reviewed to ensure that your supplier has fully confirmed every specification of your target product, including the packaging.
3. Trade term confirmation
The choice of trade terms is related to the product quotation and risk transfer issues. Common trade terms used in shipping are as follows.
EXW means EX Works, where the seller is responsible for delivering ready goods to the buyer at his premises, i.e. workshop, factory, warehouse, etc., but is usually not responsible for loading the goods onto the vehicle prepared by the buyer or for customs clearance of the goods. The buyer bears all the costs and risks of transporting the goods from the seller's premises to their intended destination. This means that EXW gives the buyer a clearer idea of the costs involved in advance. The buyer will also control the entire shipment, thus preventing the seller from increasing his local costs.
FOB is Free On Board and delivery is complete once the seller has handed over the goods to the carrier appointed by the buyer at the named location and has cleared the export customs. FOB is currently the most common trade term in trade with China, where the buyer is responsible for booking the ship to take delivery of the goods and has more control over the route, sailing time and costs.
CFR means Cost and Freight, delivery on board at the port of shipment and the seller is required to pay for the cost of transporting the goods to the designated port of destination. However, the risk of the goods is transferred at the time of delivery on board the vessel at the port of shipment. Transportation is arranged by the seller and insurance is handled by the buyer. If the seller does not give notice of shipment in time, the buyer will not be able to handle the freight insurance in time, and there is even a risk of missing the insurance. When a transaction is concluded on CFR terms, the product quotation will include the cost of sea freight.
CIF means Cost Insurance and Freight, delivery at the port of destination, the seller has the same obligations as the CFR term, but also for the buyer to handle insurance, pay the insurance premium, according to general international trade practice, the seller should be insured by at least 10% of the CIF price plus the amount of insurance. Under this trade term, the product quotation will include freight and insurance from the port of shipment to the port of destination.
In general, the product quotation, the degree of risk borne by the importer and the degree of control of the goods under the four trade terms are compared as follows.
Product price: EXW<FOB<CFR<CIF
Degree of risk: CIF<CFR<FOB<EXW
Degree of control: CIF<CFR<FOB<EXW
4. Confirmation of payment term
For parties who have established long term cooperation, it is common to pay a part of the deposit by wire transfer after the order is signed and the remaining balance after the goods are loaded onboard the ship, the seller needs to provide proof of loading such as a scanned copy of the bill of lading. The percentage of deposit and final payment maybe 30% and 70% or other, which needs to be negotiated between the parties before the contract is signed. Wire transfers allow for quicker overseas transfers, but there is a risk for the buyer in paying this way, as you cannot confirm the quality of the goods until the ship arrives in port. But generally, we encourage you to trust the supplier you are working with. After all, trust is the basis for mutual cooperation and long term development, and we will mention how to control the quality of the goods in other ways.
Letter of Credit
A written document is issued by a bank to a seller at the request of the buyer, guaranteeing the liability to pay for the goods. It guarantees that the supplier will receive the correct amount of payment from the buyer on time, provided that the goods are delivered in accordance with the letter of credit and that the required shipping documents are submitted. The buyer is required to pay a deposit or provide other guarantees to his local bank in order to apply for the L/C.
l Documents against payment
A form of settlement in which the collecting bank must pay the buyer in full before it can hand over the shipping documents and documents of title to the buyer. It is usually used for large order transactions. Whether it is a sight payment or a forward payment order, there is a risk that the buyer will abandon the goods and not pay. The risk to the supplier is much greater, so 99% of Chinese suppliers will not agree to enter into this form of payment with a new customer.
In addition to the above three relatively common payment terms, many suppliers have started to accept PayPal, MoneyGram and other convenient payment methods, but due to withdrawal and transfer rates, most are still only used for small orders.