Category: Business

Therefore, product quality shouldn’t be a concern for our customers if the supplier is a Chinese manufacturer. However, not every manufacturer in China is licensed to engage in foreign trade. These factories are “sponsored” by Chinese trading companies—intermediaries. They will help you purchase, clear customs, and ship your goods from China. This service costs 2-3% of the purchase price. Lately, I’ve often seen advertisements in China declaring that they don’t charge a percentage for the first purchase, but I think this is a marketing ploy—they’ll include their percentage in customs clearance or shipping costs from China to Russia.

Standard warehouse for goods consolidation in Yiwu

This increase in the cost of purchasing high-quality Chinese goods can only significantly impact large wholesale orders. On the other hand, you’ll be protected from any potential complications when shipping goods from China yourself.f Therefore, feel free to enter into a contract with a Chinese intermediary company for the goods you’re interested in, such as Vesna. The company is a reputable company with extensive experience working with Russia, and its director speaks fluent Russian. Currently, they ship 30-40 containers per month to their clients via Ningbo to Vladivostok, complete customs clearance, then, at the client’s request, offer truck, air, or rail transportation.

As the experience of such Chinese companies shows, Russian entrepreneurs start their own businesses in China with a small investment—typically starting from $1,500. Within a year, they’re already generating $30,000 in turnover if they find the right product in China and their target audience in Russia.

Without further ado, our employee’s wife bought a small batch of jewelry to try out and brought it back to Vladivostok on July 20, 2013. It was all sold in two days, with a 360% profit margin! When I left Yiwu on August 12, 2013, they handed me the next batch of goods—a turnover, indeed!

I spend almost half my time traveling around China. 

How can you quickly and effectively start your own business in China and minimize the number of mistakes along the way? Why reinvent the wheel when you can use ready-made options and strategies that successful entrepreneurs are ready to share with you? This is the topic of the  second international exhibition and conference  “Business with China.”  The organizers of this large-scale event have asked would be happy to post an announcement and fulfill this request:

Understanding China’s Business Landscape

During the business program, successful entrepreneurs who have built their businesses on trade with China will share their experiences with visitors, and experts will discuss the details of organizing supplies, customs clearance, working with Chinese suppliers, setting up private label production, currency transactions, and investing in the Russian-Chinese market. The exhibition area will feature logistics, customs, and transport companies, representatives of the financial sector, and Russian-Chinese projects.

On the first day after the grand opening, a plenary session will be held on the topic “Russia and China: Challenges, Conditions, and Financial Potential for Trade and Economic Cooperation Between the Two Countries.” Invited to participate are members of the Shanghai Cooperation Organization Business Club Council: President Sergey Vadimovich Kanavsky, First Vice President Mr. Wang Lin’an, and Director Denis Valerievich Tyurin.

Transit Plus specialists, including Dmitry Portnyagin, host of the well-known podcast about business with China, “Pravdachaye,” will share their experience of doing business with China. A delegation of the company’s specialists will arrive at the exhibition and conference directly from China. This year, Transit Plus served as the event’s General Partner.

Essential Legal Requirements for Starting a Business in China

Valentin Ostras (China Solutions, the China External Trade Organization) will be attending the event as a special guest. The organization is currently preparing to launch a unique service in the HR services market, ChinaHR.ru, designed to connect the best Chinese-speaking specialists with leading employers from Europe and Asia. China Solutions supported the event and served as the Official Partner.

On both days of the conference, sessions will be held on customs clearance of goods from China. A thorough understanding of customs matters, an understanding of the best options for clearing goods, and the ability to take advantage of existing incentives are essential for conducting international business professionally. Specialists from the Venta Group, the event’s Official Partner, will share this and much more with conference participants.

The program will also include a session titled “The Hong Kong Offshore as a Tool for International Trade and Investment.” This session is primarily intended for more experienced investors, but will be of interest to anyone looking to conduct business with China on a professional level.

Collaborating With Local Partners and Agencies

Organizations such as the Committee for the Development of Entrepreneurship and Consumer Market of St. Petersburg, the Committee for Industrial Policy and Innovation of St. Petersburg, the Investment Committee of St. Petersburg, the Hong Kong Trade Development Council, Delovaya Rossiya, Opora Rossii, and the Association for the Promotion of Entrepreneurship have already announced their participation and support for the project.

Among those invited to participate were Mr. Ji Yanchi, Consul General of the People’s Republic of China in St. Petersburg, Guan Xuefei, Vice President and Member of the Board of Directors of Bank of China (ELOS), Lan Weijie, Deputy Chairman of the Board of Directors of the Hong Kong Trade Development Council, and Leonid Orlov, Head of the Representative Office of the Hong Kong Trade Development Council in the CIS and Baltic States.

I’d like to apologize right away for not answering your questions about building your own profitable business with China. First and foremost, Alexander and Tagir, my personal apologies. Unfortunately, it’s not always possible to promptly respond to emails and questions. Therefore, today I’ll try to explain in as much detail as possible the essence of building a business in the delivery and customs clearance of goods from China.

Secrets of starting your own business in China

But first, a brief report on the past month (mid-May – June 21, 2013, when I returned from another trip to China). We held productive negotiations with several companies in Yiwu focused on Russia. For reference: the Yiwu dry port processes 2,500-3,000 containers for export per day! I’m not mistaken – that’s right! But that’s for ports around the world; unfortunately, only 150-250 containers are processed daily for Russia. I’m overdoing it when I say “regret,” of course. If you take 10% of this flow, then 15-20 containers per day from China to Russia from Yiwu alone is quite good. Do you agree?

How to start your own business in China?

Now, about creating YOUR own business with Chin. Alexander asked me: What can we offer the client? How do we differentiate ourselves from other market offerings? What is our unique selling proposition, in a nutshell?

I propose to structure the work:

• at below-market prices for transportation and customs clearance,
• according to minimum delivery times for goods, up to penalties for each day over the agreed timeframe,
• individual approach to each client.

In short, any freight forwarder’s offer of “Fast, affordable, high-quality—pick any two!!!!” doesn’t work for us. We’re truly ready to deliver our clients’ cargo—fast, high-quality, and affordable. And we’re willing to accept penalties! You won’t hear me say things like “these are circumstances,” “force majeure,” and so on. We ship at shipping company rates, don’t add commissions, and our customs clearance prices are incredibly competitive. A deferment of all shipping (freight and rail) and customs payments until the goods arrive in your region—what could be more convincing?!!! Why do we employ Chinese and Indians who speak little Russian? Our translators speak at such a language level that the Chinese shrug their shoulders—you can’t just throw away 20 years of experience, after all.

The spirits of Beijing are with us

For added credibility, I’m happy to provide documentation of your shipment’s progress through our service upon request. You’ll be able to see for yourself the timeframes, prices, and quality of our services for the delivery and customs clearance of cargo from China.

For those who don’t want to make a pittance on logistics, I have a very attractive offer. One of our Chinese partners is ready to provide a full range of services for sourcing, purchasing, customs, and transport clearance of cargo in China for 3% of the order value. A highly professional team of Russian and Chinese employees will fulfill all your needs. We provide guarantees throughout Russia.

The secrets of doing business with China are revealed!

Now, a little personal stuff. I was last in China for almost two weeks, from June 10th to June 21st, 2013. Naturally, I spent most of that time in Yiwu, where I not only met with current and future partners but also explored the sights of this glorious city. The last three days were in Beijing, where the cultural program took up more time than the business, I’ll be honest. Accordingly, I took photos whenever possible and as needed.

We’re talking about purchasing wholesale quantities of goods if you’re planning to build your own traditional business with China, buy and sell. Some might say that online trading will help. Of course, online stores, Taobao, Alibaba, etc., offer millions of completely different products. But what if you need a product not for personal use or a small wholesale lot for your friends? What if you plan to spend thousands of US dollars, and at the same time…Can you be confident in the quality of the product you’re buying? Can online resources 100% guarantee that the product they’re selling truly meets all your needs? Are you satisfied with delivery times, payment terms, acceptance, and transaction documentation when purchasing online?

Finding a supplier of quality goods in China!

Personally, I wouldn’t risk my money buying goods from China based solely on a photo or picture. Almost every Russian wholesaler visits exhibitions and factories and personally handles all shipping and delivery issues from China to Russia. It’s a fact that any foreign company that locates its production in China maintains strict control over all manufacturing technologies and processes. But we’re not Apple or Mercedes, so we can limit ourselves to minimal costs if we decide to sell Chinese goods.

Let’s not forget about beer in China!

China can be easily divided into provinces specializing in the production of certain products. This applies to both heavy industry and consumer goods. Historically, beginning in the early 1990s, cross-border trade accounted for the lion’s share of transactions. The cities of Suifenhe, Manzhouli, Haihe, and several others are literally “tailored” to trade with Russian entrepreneurs. This includes signs in Russian, numerous Russian-speaking Chinese vendors, and restaurants offering familiar food and entertainment. In short, all the conditions were in place to attract Russian buyers for a decade. But over time, the situation changed.

 Competition already in Russia for selling goods from China, the opening of huge trading markets and centers in major cities where the Chinese themselves were already trading—all this made doing business in China through “buying and selling” more expensive and less profitable. Russian entrepreneurs began to try to bypass Chinese border intermediaries and work directly with factories, often located deep within China and lacking experience working with Russia. A solution came from so-called “CONSULTING IN CHINA,” created by Chinese-speaking Russians, which helped find manufacturing facilities, negotiate contracts, and oversee the production and transportation of goods from China to Russia. This civilized method of doing business with China is currently thriving.

Entire teams of Russian freelancers scour China in search of affordable, high-quality Chinese goods and manufacturers who inspect finished shipments and handle shipping from China to Russia. However, the quality of service and work performed has become significantly different. Many Russian freelancers simply lack the necessary knowledge, yet charge hefty fees. Yet clients continue to pay. Why?

I think there are many stereotypes about doing business in China. Firstly, without knowing the language, it’s impossible to travel around China, find manufacturers, and negotiate with them. Secondly, Chinese legislation is very complex, making it very difficult to prove your case in a dispute with a supplier or seller. Thirdly, logistics from China are so complex that significant losses result from handling customs clearance and transporting goods from China yourself. In reality, it’s not that bad, but I’ll continue this in the next thread.