Importing from China to Mexico: The Complete Guide

china-to-mexico

Importing from China to Mexico is a good business that an aspiring entrepreneur should give it a priority.

But to gain from it, you must adopt a cost-effective and efficient strategy.

This guide highlights in details the best imports from China to Mexico, import requirements and import duties among other vital information that you need to be in a position to know as an importer.

Guess what – by the end of this guide, you will find importing from China to Mexico a simple process.

Let’s dive right in.

What you can do in Order to Import Low MOQ from China to Mexico?

Being that China is known worldwide for its ability to manufacture large amounts of goods.

They do set minimum quantity that could be quoted for supply in the overseas, Mexico is one of the countries.

Well, in order to import from China in low volume and sell at in Mexico at higher prices, you need to do the following;

i) The initial part of it is to start by sourcing the suppliers and manufactures on Alibaba or Made in China among other sourcing agencies.

ii) You can consider contacting some sources and you can quote with them as well.

iii) You can then receive the quotations but with a high MOQ which may your expectations.

Having done this, you will be in a position to pick the lowest MOQ from these sourcing agencies.
 

What is Mexico import requirements?

In this section, you will be able to know as an importer what entails Mexico import license as well as the documents you need to have in order to import to Mexico.
· Mexico import license

· Markings on the goods being imported

· List of Mexico import documents: Commercial invoice,Packing List,Bill of lading,Certificate of origin,Weight or volume certificate.

How to get suppliers for goods from China to Mexico?

As an importer, you need to consider reliable online marketplaces as well as taking some interventions in order to get reliable goods from China to Mexico.
Here, you will be able to get reliable sources.
· AliExpress
· Alibaba
· Visit China Trade fairs in Mexico
· China Trade Fair
· Visit China
· Made in China

What are the necessary criteria for considering efficient sourcing agency?

i) Over 5 years’ experience in sourcing operations

ii) The staff of more than 20 people to mitigate the risk of service failure as a result of staff attrition.

iii) Experience with your company’s categories and industry

iv) Staff well-trained in QC, audits, and negotiations

v) Documented Sourcing Process and training regime

vi) Language and management skills.

China to Mexico

Figure 1 China to Mexico

Chapter 1: Top Mexico Imports from China

China is currently at the climax due to the varieties of goods that are being produced from China to other parts of the world.

From a statistical point of view, Trading Economics indicated that China’s trading surplus was up to USD 44.74 billion in November 2018 from USD 38.43 billion in the same month and a year earlier.

Mexico Imports

Mexico Imports

The following are the top imports to from China to Mexico;

· Importing Vehicle Parts from China to Mexico

China has been rated as the leading manufacturer of vehicle parts and thus Mexico has been importing a variety of these products from China.

The car parts are in variety and are designed to suit a variety of car types that are available in the market.

Some vehicle parts from China may include carbon fiber meter hood, truck windshield wipers, universal wiper blades, sprinter steering rack, disc brake pads, auto parts for Toyota Honda, engine mount, spark plugs, front brake pads among other various products.

These products normally made available to Mexico through air freight or sea freight and they normally reach Mexico in bulk quantities and are often in the containers.

· Importing Refined Petroleum from China to Mexico

Mexico has been in the demand of various refined petroleum products such as gasoline, diesel oil, light oil among other products.

China has been exporting these products in large quantities and the costs of these products depend on the commodity in question as prices do vary from one petroleum product to the other.

Oil

 Oil

The Mexican government does charge import duties depending on the quantity of the product imported.

Oil tankers are normally used in order to ensure that petroleum products are transported from China to Mexico thus sea freight is the most preferred route to ensure that these products reach Mexico.

It is also important as an importer to build barrels for the storage of its refined petroleum imports.

· Importing Integrated Circuits from China to Mexico

China has been the leading manufacturer of many electronic devices one of them being integrated circuit.

China being the leading manufacturing hub for these products has resorted to the exportation of some of these products to overseas countries in order to meet the demands of the consumers.

Flexible PCB

Flexible PCB

The market analysis in Mexico is also booming since these products are in higher demand and this is possibly due to the advancement in technology.

These products are normally transported to Mexico from China via sea freight and also via air freight services and this will depend on the importer’s preference.

The government of Mexico do charge import duties base on the quantity and the value of these products and thus as an importer you need to be aware of these.

· Importing Computers from China to Mexico

Computers are another major export from China and due to the fact that China has been leading in the manufacturing of various computer models.

It has resorted to the overseas markets, Mexico is one of the markets.

Chinese laptop manufacturer

Chinese laptop manufacturer

Due to the fact that there is growth in information technology in Mexico, the demands of Mexican consumers tend to outweigh its supply and thus Mexico has been importing large amounts of computers mostly from China.

The freight services being used in order to transport these products from China to Mexico is the sea freight.

These goods are transported in the containers and this may vary due to the importer’s ability.

The government also charge import duties based on the quantity and the value of that given model of the computer.

· Importation of Cars, Delivery Trucks, and Tractors from China to Mexico

China has been making headlines on its high production of machineries such as cars, trucks, and tractors.

Mexico does not have the capacity of manufacturing of cars, trucks, and tractors; therefore, it does import them mostly from China.

HOWO Trucks

HOWO Trucks

The demand of these products are growing since many people need cars for personal use, some use the trucks for business purposes while tractors may serve the multipurpose tasks as some are used in the agricultural sector as well as business.

These products are normally transported to Mexico via sea freight due to the fact that they are heavy and bulky.

They are transported in containers and this is safer means of ensuring that the goods reach Mexico.

The government also charge import duties on these products and the amount normally depends on the quantity of the goods.

· Importing Telephones and other Electronic Devices from China to Mexico

Mexico has been in the demand for telephones and electronic devices such as:

  • Semiconductor devices
  • Video displays
  • Electrical control boards
  • Radio receivers
  • Electrical ignition
  • Electrical transformers
  • Low-voltage protection equipment
  • Electrical motors
  • Insulated wires
  • Valves
  • Electrical power accessories among other many products

Huawei Phone

Huawei Phones

These products are in high demand due to technological advancement in Mexico and since Mexico is unable to meet the demands of its consumers, it has opted to import them from China.

Most of the importers prefer shipping of their goods but some importers opt to use air freight.

They are parked in containers and handled with a lot of care since these electronic devices are always fragile thus once they reach Mexico there are delivered to the market.

· Importing Beauty Products from China to Mexico

The beauty industry is very large and thus as an importer, you need to know what you import and how it can be delivered in the market.

China has been producing various beauty products that are exported to various parts of the world.

Beauty products from China

Beauty products from China

Mexico has opted to import various Chinese beauty products and these include electrical beauty equipment, skin care, human hair, stitching bags, facial care, wigs, lip treatment, glitter sequins for nails, cosmetics vanity carry box, cosmetic eyelashes among other products.

As an importer of these beauty and cosmetics products, you need to comply with the regulations and ensure that they do not contain the products which are prohibited in Mexico.

Importers of these products are charged import duties and as an importer, you need to be aware of this.

Freight services such as ship and airplanes are used to transport these products from China to Mexico.

· Importing Office Machine Parts from China to Mexico

Mexico does not produce many office machine parts and therefore in order to ensure that its market has enough of these products, they have opted to import most of these products from China.

Office machine

Office machine

China has been leading in the production of various office machine parts such as double A4 copy print papermaking machine, EP-42S economy office paper folder machine, tape slitting machine, automatic book cutting machine, cross fold office paper cutting machine, SM-460 manual ceasing and perforating machine among many others.

These products are normally transporter from China to Mexico via sea or air and the importer may decide to use one of his or her choices.

· Importing Air Pumps from China to Mexico

China is producing varieties of air pumps to the global market and one the target market in Mexico.

Various air pumps produced from China include 4kw water ring vacuum pump, economic brush 12V air pump, air operated diaphragm pump, pneumatic double diaphragm air operated reciprocating oil transfer pump, rechargeable portable air compressor, RD 15 air operated diaphragm pump among many others.

Air pump

Air pump

These products are made available to from China and the importers may decide to use sea or air freight services.

Sea freight may be used since these products are durable and hence even reliable even if it takes a longer time before goods are delivered to Mexico from China.

Chapter 2: List of Prohibited and Restricted imports to Mexico

Mexico being a sovereign nation has limitation to some of the imports and it is against the law as an importer to go against them.

Prohibited goods are those that the country does not allow to enter while those which are restricted may be allowed to enter only after clearing.

As an importer, you can review some of the restricted and prohibited imports here: Prohibited and restricted imports.

Prohibited imports

Prohibited imports

Some of the prohibited imports are;

i) Narcotics and some of the habit-forming drugs

ii) Live fish

iii) Images representing children in a degrading or ridiculous way.

iv) Used clothes

v) Firearms and ammunition

vi) Explosives

vii) Toxic and hazardous products

The link above also indicates the reasons for the prohibition and restriction and it is, therefore, important to read it so that you are not caught unaware.

Chapter 3: Mexico import requirements

In order to import to Mexico, there are some requirements that you need to meet as an importer.

In this section, you will be able to know as an importer what entails Mexico import license as well as the documents you need to have in order to import to Mexico.

· Mexico import license

First, as an importer, you need to file your business with Mexico’s Registry of Importers which is found under Mexican tax authority.

Well, after doing so you also need to update your tax obligations and as well with customs laws.

Also as an importer, you need to have documents proving the country of origin.

You will also ensure that you are meeting quotas among other measures which may be applicable to the same effect.

Import license

Import license

These laws are provided and enforced based on the Laws of Foreign Trade.

· Markings on the goods being imported

An importer should ensure that the merchandise imported into Mexico has the following;

Product labeling

Product labeling

i) Name or business name and the address of the importer

ii) Trademark or the commercial name of the product

iii) The total amount or net contents

iv) Use, handling, and care instructions for the given product.

v) Warnings or precautions on hazardous products

List of Mexico import documents

As an importer, you need to have the following documents in order to import your goods into Mexico.

1. Commercial invoice

This document normally contains the official registered business name, the name of the importer, description of goods, price as well as terms of sale.

Commercia invoice

Commercial invoice

2. Packing List

This document supplies all the content as per the shipment, number of pieces, total weight as well as unit weight.

This document is normally recommended for consolidated freight.

Packing list

Packing list

3. Bill of lading

This document is normally issued by the shipping agent at the country of origin and submitted by the supplier.

It is important as an importer to take care of this bill of landing as it is normally needed in order to deliver the goods.

Bill of lading

Bill of lading

But an importer having Express bill of landing will only need to provide this document during customs clearance.

4. Certificate of origin

As an importer, you need to have this document proving the country of origin.

Certificate of origin

Certificate  of origin

More of this document may be required depending on the type of the product you are importing.

5. Weight or volume certificate

As an importer, it is recommended that this document is produced by the Ministry of Finance and Public Credit in order to for it to be certified.

Chapter 4: How to Get Goods to Import from China to Mexico

This is a crucial process that you need to know as an importer and you will as well be able to understand various sourcing agents and the criteria for sourcing.

What should you look for in order to know the capability of a good sourcing agent from China?

i) Fluency in Mandarin and Cantonese

ii) Thorough knowledge of the Chinese business culture

iii) Experience in managing Chinese suppliers

iv) Category and sourcing process experience

v) Quality control experience

vi) Audit experience

vii) Logistics experience

How to get suppliers for goods from China to Mexico

As an importer, you need to consider reliable online marketplaces as well as taking some interventions in order to get reliable goods from China to Mexico.

Here, you will be able to get reliable sources.

· AliExpress

AliExpress is one of the online platforms that an importer may rely on.

It is owned by Alibaba and it can assist importer who imports goods on small quantities from China.

AliExpress

AliExpres

The advantage of this AliExpress is that it works with small retail buyers and also the prices of goods here are also cheap.

· Alibaba

This is also one of the online platforms that you can use at your doorstep through visiting their website.

You can be able to get various suppliers as well as manufacturers with reliable goods that you are in need of as a supplier.

AliExpress

Alibaba

Alibaba has also included various methods that you can use to ensure that you pay for your goods promptly.

You can use either of the following; Alipay, Credit cards, Telegraphic transfer, Western Union among other methods of payments.

· Visit China Trade fairs in Mexico

As an importer, you need to visit China trade fairs and exhibitions in Mexico since you will be in a position to know all that you need to know about importing from China to Mexico.

You will also be able to know various sourcing agents as well as reliable suppliers.

China Trade Fair

China Trade Fair

From these trade fairs, you will also know various goods that are on higher demand in Mexico from China.

The advantage of taking this initiative is that you will be able to even meet various importers and thus you will be able to learn from one another.

· Visit China

Taking this initiative as an importer will enable you to meet your suppliers face to face.

This will assist you as a supplier by ensuring the credibility of the same suppliers.

Shenzhen Electronics Market

Shenzhen Electronic Market

From this visit, you will be able to negotiate on various issues such as the costs involved.

Besides, you will be able to know the maximum and minimum quantities you can order through them.

· Made in China

This is an online platform which you can be able to access at your doorstep.

Made in China

Made in China

You will be able to select suppliers and then agree on the terms of service as well as the initiative you will use to ensure that payments are affected.

Chapter 5: Cost of shipping from China to Mexico

The cost of shipping from China to Mexico varies depending on so many factors. For instance, the type of shipping, cargo type, distance, etc.

In this section, I am going to take you everything you need to know about the cost of shipping from China to Mexico.

Sea Freight from China to Mexico

Sea freight is normally the main shipping method which is used to ensure that goods are transported from China to Mexico and other global countries.

Sea is normally the first choice because of its low prices, large volume, FCL or LCL options.

When it comes from China, CFC has been good at providing ocean cargo services for both small and medium businesses as well as individuals all over the world.

MAERSK LINE

MAERSK LINE

Basically, how much of shipping you pay the supplier to handle is based on the Incoterm you select as an importer.

Container Type – 20’GP/40’GP/40’HQ

These three types of containers are the most commonly used to carry cargo from China to Mexico.

20’GP = 20’feet general purpose

40’GP =40’feet general purpose

40’HQ = 40’ feet high cube

General purpose often means Dry Container (DC).

And sometimes if fluid goods are parked by a flexible container bag, it can as well be delivered by standard DC.

Container sizes

Container dimensions

Freight Cost- Ocean costs

As an importer in order to be fully satisfied, you can use freight calculator to calculate the costs of transporting various cargo based on weight and sizes of different containers from China to Mexico here – ocean freight cost.

In that website, you can be able to know the cost incurred in order to import cargo from various ports in China and as well deliver them to your most convenient location in Mexico.

LCL rates

This will depend by the loading port, the destination port, the volume, weight, the volume/weight ratio.

You should also note the other costs during an import process, they include;

i) Transportation to the port of loading

ii) Export customs declaration

iii) Loading port fees

iv) Ocean freight charge

v) Insurance

vi) Destination port fees

vii) Import customs clearance

viii) Customs duty/tax

ix) Transportation from the port of Destination

The following prices are based on FOB Guangzhou/Shenzhen

DESTINATION ROUTE (VIA) RATE: USD/CBM CFS CLS&ETD CARRIER T/T MIN/CBM
Manzanillo Direct 15 3-1 NYK 24 1
Aguascalientes Via Manzanillo 90 3-1 NYK 30 1
Cuernavaca Via Manzanillo 110 3-1 NYK 30 1
Guadalajara Via Manzanillo 75 3-1 NYK 30 1
Leon Via Manzanillo 90 3-1 NYK 30 1
Lerma Via Manzanillo 95 3-1 NYK 30 1
Mexico City Via Manzanillo 65 3-1 NYK 30 1
Monterrey Via Manzanillo 120 3-1 NYK 30 1
Pechuca Via Manzanillo 120 3-1 NYK 30 1
Puebla Via Manzanillo 110 3-1 NYK 30 1
Queretaro Via Manzanillo 80 3-1 NYK 30 1
San Luis Potosi Via Manzanillo 95 3-1 NYK 30 1
Toluca Via Manzanillo 95 3-1 NYK 30 1

Upon arrival of your cargo, there is clearance and pickup.

The goods may only be entered by the owner, purchaser, or a licensed customs broker designated by the buyer.

The following will also take place at the port you are intending your goods to arrive at in Mexico.

Customs official will process your shipment after;

i) Inspecting the paperwork

ii) Determine duties if apply

iii) Request duty payment

iv) Following confirmation of payment, release the shipment for pickup

Air freight from China to Mexico

Air freight is the fastest and safest means that an importer who needs hi or merchandise to arrive faster should prefer.

Aeromexico

Aeromexico

Air Freight Terminology when Importing from China to Mexico

  • AWB

Air Waybill, this normally referred to as non-negotiable transport document issued by the carrier or the agent indicating the carrier has accepted the goods listed therein.

AITA

International Air Transport Association which supports airline activities and helps formulate industry policy as well as standards of the world’s airlines.

  • ETD – Estimated Time of Departure
  • ATD – Actual Time of Departure
  • ETA – Estimated Time of Arrival
  • ETT – Estimated Transit Time

ULD

As an importer, you can simply take it as air container just like sea container.

If the cargo exceeds below the weight and volume, the carrier can determine the allowable minimum limit and volume cargo based on the flight model, departure and the destination airport handling the equipment condition.

ULD

ULD

How is air freight calculated?

1: Pickup fee + Customs

2: The cost per kilogram multiplied by the chargeable weight.

3: Destination charges, such as customs clearance, tax, delivery

The air freight costs vary depending on many factors such as origin airport, destination airport in Mexico, weight, quantity among other factors.

Calculation of Mexico Import Duty

Import duty will also affect the total importing costs from China to Mexico.

Of course, you need to follow the appropriate import procedure as I will explain below.

· Import Procedure

Importing agents are the ones mandated in the handling of all the administrative as well as requesting the necessary authorizations for customs clearance.

Therefore the importer is advised to work with more experienced importing agents.

Hence, to apply correct taxes/duties, the importing agent need to present an import declaration issued by Secretariat of the Economy, a commercial invoice, bill of lading, proof of exemption as well as a certificate establishing the origin of the goods.

Mexico City International Airport

Mexico City International Airport

Companies that are importing goods that appear on Annex 10 of the Foreign Trade General Rules (FTGR) have to be registered in the Mexican Register of Importers in Special Sectors.

A special tax on production and services (IEPS) is assessed to the importation of alcoholic beverages, cigarettes, and cigars among others from 25 to 160% depending on the product.

Importing samples

The Mexican government requires that samples must be classified according to the custom list 9801.00.01 of the Legislation of General Tax for Imports and Exports.

Customs Duties and Taxes on Imports

Customs threshold is required

Products valued up to USD 50 are exempt from duty and VAT.

Average Customs Duty excluding agricultural products

Mexico Customs Classification

Mexico uses the Harmonized Commodity Description and Coding System and often referred to as the Harmonized System.

This Harmonized system is composed of about 5,000 commodity groups.

From these groups, you can be able to select where the commodity you intend to import falls under.

Normally each of the groups can be identified by a six-digit code used by many countries.

Method of Calculation of Duties

Customs duties are normally calculated Ad Valorem on the CIF (Cost, Insurance and Freight) value of goods.

Calculate tax

Calculate tax

You also need to know that this CIF method is in exception of goods originating from U.S and Canada in which case FOB is used.

Customs Duties or Import will be pending and need to be cleared while importing goods into Mexico.

Import duties and taxes payable are calculated on the complete shipping value which includes the costs of imported goods, costs of freight and cost of insurance.

Imports in Mexico are also subject to sales tax and in some cases to excise tax.

General import Duties ranges from 0% to 35% but normally most imports in Mexico fall within the range of 3% to 20% (exceptionally, certain food products, shoes, and textile pay higher duties)

Excise tax law

You need to know that this tax is levied on certain taxable items such as gasoline whose percentage is variable, beer (26.5%), wine (26.5% to 53%), spirits (53%), and telecommunication devices (3%).

In general, to be fully satisfied or when you are trying to estimate the import duties and taxes you can visit here at your convenience – Simply Duty.

Method of Payment of Customs Duties

Payments can be done through cash, check or bank transfer.

Import Taxes have a tax rate that normally applies to imported goods.

The standard rate is 15%.

How Incoterms Affect Importing from China to Mexico

Incoterms play an important role in international shipping.

Knowing the right incoterm to use will help you save a lot of money when importing from China to Mexico.

1) EXW(Ex Works)

As an importer, you need to know that here the seller is responsible for making the goods available at the seller’s premises.

It is worth noting that the buyer bears the full risk from there to destination.

2) FCA (Free Carrier)

You need to be aware that the seller is responsible for delivery to the custody of a carrier, identified by the buyer.

Also, it is good to note that the risk is transferred when loading has taken place.

3) CPT (Carriage paid to)

Here, the seller delivers goods to the carrier at agreed place of delivery and pays transport to the named destination.

Here, the risk is transferred at the place of delivery, whereas seller pays for transport to the destination.

4) CIP (Carriage and Insurance Paid to)

The seller here delivers goods to the carrier at agreed place of delivery and pays for transport and insurance to the named destination.

The risk transfers at the place of delivery, whereas seller pays for transport and insurance to the destination.

5) DAT (Delivered at Terminal)

The seller delivers goods unloaded at a specified place inside the agreed terminal.

It is good to note that the risk is transferred as soon as goods have been unloaded.

6) DAP (Delivered at Place)

Here, the seller delivers goods to the disposal of the buyer on arriving means of transport, at the agreed place.

The seller assumes risk until goods are made ready for unloading from the arriving means of transport.

7) DDP (Delivered Duty Paid)

The seller is responsible for bringing goods to the destination, paying any duty and making the goods available to the buyer.

The risk transfers as soon as the buyer has access to goods ready for unloading at agreed destination.

8) FAS(Free Alongside Ship)

Here, the seller is responsible for delivery of goods at quay alongside the ship.

From this point onwards, the risk lies with the buyer.

9) FOB(Free on Board)

The seller is responsible for delivery of goods loaded on board the ship.

The risk is transferred as soon as goods have been set down inside the ship.

10) CFR, CNF (Cost and Freight)

Here, the seller covers the cost of freight, duty unpaid, to named port of destination.

The risk is transferred as soon as the goods have been set down inside the ship.

11) CIF (Cost, Insurance and Freight)

The seller covers the cost of insurance and freight, duty unpaid, to named port of destination.

The risk is transferred as soon as the goods have been set down inside the ship.

Chapter 6: Minimum Order Quantity (MOQ)

As an importer, in case you are successful in quoting from China you will be provided with MOQ requirements from a Chinese supplier, manufacturer or factory as well.

MOQ

MOQ

This simply implies that the supplier is unwilling to sell products to the buyer if the buyer is unable to reach the minimum requirements of the lowest quantity of each product.

This MOQ is a rule in China if the manufacturers think that they may make losses of money in case they sell their goods less than a certain minimum quantity.

This, therefore, implies that most of the Chinese suppliers and the manufacturers require importers to have a given minimum quantity in order for them to order goods.

Here are some reasons why Chinese supplier requires the customer to reach their MOQ.

i) In order to meet the Running cost.

ii) When there is no inventory.

iii) To achieve minimum profit requirement.

iv) In case of the small profit margin of products.

v) There are some MOQ requirements from some related suppliers, for instance, upper stream suppliers, accessories suppliers, raw material suppliers, and treatment suppliers.

vi) Again same may apply in the case of Package Supplier Requires MOQ requirements.

Are you able to negotiate with your suppliers for a good MOQ?

The answer to this question is yes. You can negotiate with your manufacturing suppliers for lower MOQ.

You need to note that the suppliers will offer you a very low MOQ only if your products are made from common materials and have a standard requirement.

Some suppliers may as well opt to offer low MOQ in return for a higher unit price.

On the other hand, some suppliers may require you to change the material of your product or design for you to get low MOQ.

So what you can do is to find an outstanding Chinese sourcing agent which will help you get low MOQ for your goods from China to Mexico but it is often not advisable to change the product’s design in order to get low MOQ.

What are the solutions in order to get a smaller MOQ?

The main intention is to import your goods from China to Mexico.

Therefore MOQ requirements should not be a hindrance that prevents you from importing from China.

Therefore I will give you some of the solutions in order to import from China at low volume which cannot reach the Chinese suppliers from China manufactures.

i) In the case of running cost, you need to pay the set-up cost.

ii) In case of no Inventory, source on wholesale sites.

iii) In case of minimum profit requirement, new suppliers.

iv) Small profit margin, increase at a reasonable price.

v) In case of the other related suppliers, you need to negotiate.

vi) In the case of the packaging, you need to pay cutting tools fee or raise the unit

Payment Terms for goods Imported from China

Mode or method of payment is normally a crucial process in order to ensure that you pay the right person and your money is not lost.

MEXICAN PESO

Mexican Peso

The method of payment that you select may depend on the following;

i) The seller’s preferred method of payment.

ii) The Risks

iii) Benefits associated with the method that you choose.

Some of the most common ways of making payments when importing from China to Mexico include:

· International wire transfer

This is not normally a very common method payment small as well as transactions.

It is normally used only to pay for goods before the delivery of goods

· Open account

The method of payment here allows the importer to pay for goods after they have been received.

The wholesaler or manufacturer extends credit.

· Letter of credit

This method of payment works like a traditional bank loan in many cases.

To start with, the buyer’s bank provides a letter stating how much credit is available to the buyer.

A letter of credit often functions as a conditional bank guarantee.

The buyer’s bank will pay the supplier when the obligations of the letter are met.

The buyer will then make payments to the bank to satisfy the line of credit.

This method provides extra security for your payments.

· Online escrow

This payment method is quite similar to the letter of credit and therefore it is commonly used for smaller transactions, including those less than $5,000.

You might find that online importers tend to prefer this method of payment.

· Cash advance

This method of payment is considered the riskiest and involves cash payment for goods in advance of delivery.

This method of payment

· Documentary collection

This works similarly to cash on delivery (COD) option.  In the case of a documentary collection, the seller’s bank will work with the buyer’s bank for the collection of payment.

Imported products can be available before or after payment, depending on the method of documentary collection used.

· Telegraphic transfer (T/T)

This is a method of payment that can be used via the internet or at a bank.

Payment fraud may result as the supplier may be persuaded to pay the wrong account.

· T/T Payment process

The process is quite simple:

  • Ensure that you initiate deposit payment (30%)
  • Your production start
  • Production completion followed by
  • Ensuring quality Inspection / Compliance testing
  • Buyer approves batch
  • Delivery to the Port of Loading
  • Bill of Lading Scan Copy provided
  • Loading & Shipment
  • Consider balance payment (70%)
  • Seller sends original Bill of Lading and other freight documents (required to release cargo in Port of Destination)

When you are using telegraphic transfer, you will pay for your merchandise before leaving China.

· PayPal

This is an online platform which is gaining popularity in the market as a method of payment online.

Its acceptance is still very low even though some industries especially mobile/ computer accessories and consumer electronics.

This payment method even though it still have low acceptance, it is safer than telegraphic transfer.

· Cash

China normally accepts cash transactions even for large transactions.

This cash method only applies when you have a sourcing company or agent involved.

The advantage of using cash is that it can sometimes lead to lower pricing of some products.

The acceptance of this method of the transaction is high in some industries and lower in some.

Its acceptance is lower in larger organized companies and state-owned companies.

· Western Union

This also a method of payment that you can use as an importer but it’s often advised that importer to avoid using the method since it is highly risky to the buyer.

However, you can use Western Union only if you are paying your trusted suppliers or agents when you need to get money across quickly.

Chapter 7: Import Customs Procedures When Importing to Mexico

Customs procedures are normally rigid but as an Importer, you need to take this with utmost seriousness that it needs.

You need to follow all customs procedures properly to clear your imports from China to Mexico faster.

Customs

Customs clearance

So in order to remain proactive in the market, it is essential that you understand important steps under customs procedures and taxes on imports as well.

In this chapter, I will enlighten various important custom procedures that you require to know as an importer.

· Customs procedures in details

It is an established rule that any company that imports goods into Mexico must be registered on the Mexican Importers Registry.

This registry is normally classified by sector.

Importing agents are the ones who are mandated on ensuring that all the administrative formalities and vital authorizations for customs clearance are handled in the right way.

Port of Lazaro Cardenas

Port of Lazaro Cardenas

The first thing that is required to be done by the importing agent so as to ensure that the correct taxes/duties are applied is to present an import declaration.

This is normally issued by the Secretariat of the Economy.

Then the agent will also provide a commercial invoice, a bill of lading, a proof of exemption, and certificate establishing the origin of the goods in that order.

Also, you need to know that import taxes vary depending on the tariff bracket in which your imported goods are classified under.

In general, all the Mexican importers are required to apply in order to be listed on the Importer Registry which is normally maintained by the Secretariat of Finance and Public Credit.

It is also worth noting that goods valued up to USD 50 are exempted of payment of duty and VAT.

It is also worth noting that Mexico has taken the initiative of reducing tariffs on the products that are intended in the development of the local industries.

The standard rate on imported goods is up to 15% and the reduced rate is normally 10%.

The 0% rate also applies to some specific goods such as articles for human consumption, books, medicines, and agricultural produce.

Also, there are customs rights and processing fees of 0.8% on the declared value.

Chapter 8: How to Import from Alibaba to Mexico

Alibaba is an e-commerce company that is mandated in providing manufacturing sourcing options for businesses of all sizes at relatively affordable prices.

Alibaba is also good directive in allowing you as an importer to connect to suppliers based in China.

Alibaba also has vast amounts of products that you can source and you can as well be in a position to get supplier prices at insider rates.

Before going through the whole process of ordering goods through Alibaba, you need to understand the terms that you may encounter on Alibaba. They include;

i) OEM

OEM stands for Original Equipment Manufacturing.

You can come with your own specifications, your own requirements, your own detailed visions of your product and hand them off to an OEM factory.

The OEM will start manufacturing your product from scratch.

This is the kind of supplier you should be looking for if you want a unique product under your brand name.

ii) ODM

ODM stands for Original Design Manufacturing.

An ODM supplier (factory) will give you products ideas.

Give the factory some expected functions, some expected performance and some expected ideas of the conceptions and the factory will suggest some final product options.

· Trade Assurance

If you have a dispute with your supplier, you can submit a claim to Alibaba.

They’ll review it, and if they agree that the factory (supplier) has not made good on their promises, they may give you your money back.

Trade Assurance

Trade Assurance

You should also know that from the very beginning your sales agreement must list the points that could cause a dispute, like quality control (QC), lead times among others.

Gold Supplier

Here, the supplier is paying Alibaba to appear more favorably in the search results.

Assessed Supplier

Alibaba has had a third-party company visit the supplier to check out their facilities.

This ensures that all the suppliers on Alibaba are verified hence reliable.

QC process

Alibaba has lots of quality control processes and terms these include;

IQC:  Incoming Quality Control means the control of raw materials or anything that enters the supplier’s workplace for the manufacturing of goods and products.

OQC: Outgoing quality control is concerned with the finished goods ready for shipment.

QC & QA: Quality Control and Quality Assurance are the ways that quality is controlled and assured during all the process.

IPQC: In-Process Quality Control is made during all steps of the manufacturing of a given product.

In order to import from Alibaba, you need to follow this procedure;

Sourcing of Products you need to Import

You can be able to do this via Alibaba in various ways including, product search, supplier search or by posting a buying request.

But due to the fact that you need to import a given product that you have identified, you need to do Supplier Search.

By choosing the supplier’s search option, you will be in a position to get many suppliers and your product that you are intending to import.

Contact suppliers

In order to achieve this very satisfactorily, you need to do the following.

Alibaba supplier

Alibaba suppliers

  • Provide clear product specifications
  • Provide product certification requirements
  • Specify whether or not you need to order an existing product or an OEM product.
  • Provide your contact details.

In case you don’t provide all these information you will not be served by the suppliers in Alibaba.

Requesting of the Quotation

It is advisable that you send your inquiry to more suppliers after which you will be able to get quotations from some of them even if not all them replied to your quotation.

It is important as an importer to indicate the following information on your quotations;

  • Product images / Link to Alibaba product page
  • Product Specifications
  • Minimum Order Quantity
  • Pricing
  • Incoterms
  • Export Packing

Ordering Product Samples

This is not so important but you can consider ordering samples bearing in mind that you will be required to pay air freight from China.

Consider the following;

  • Order samples from more than one supplier if possible
  • Inform your supplier on which products that you require samples from and the number of pieces that you need per
  • Inform your supplier that the samples that you require should match the final product unless you are intending to order highly customized products that you will need to mould.
  • Provide the supplier with your delivery address and ask them to indicate the products as sample items.

Placing of the Order

It is important that you don’t rush into the placing of the order if the supplier that you have chosen doesn’t meet the expectations of your budget as an importer.

In order to decide on the right Alibaba supplier to order from, you need to consider the following;

i) Whether or not the product samples are matching your product specifications as well as quality requirements that you need.

ii) Pricing

iii) Minimum Order Quantity

iv) Supplier communication

Payment

Here as an importer, you need to negotiate terms of payment with the supplier directly without necessarily using Alibaba’s own payment gateway, Alipay.

You need to know that you are required to pay 30% before the production commences and thereafter 70% before the shipment of your products.

It is there worth noting that; you should not pay money via Western Union since the money cannot be tracked and this platform is normally used by scam suppliers.

You should also avoid paying 100% advance since anything can happen in the course of production and you may be required by your supplier to pay another amount.

Delivery of the goods

You can consider picking your goods from your destination port after ensuring that you have cleared the customs charges as well as availing the documents that are needed in Mexico.

All these documents have been listed in the previous chapters.

Chapter 9: Working with Freight Forwarder to Mexico from China

This is the most crucial part that you need to take very seriously as an importer.

You need to choose a freight forwarder which will be able to serve you regardless of your choice be it FCL or LCL.

Freight forwarder

Freight forwarder

It is very important that when you are importing from China to Mexico you contact a freight forwarder who is based in China.

So it is therefore very important that before getting into contact with any international freight forwarder you need to consider the following on your side as an importer;

i) You need to consider your incoterms that you had with your supplier. This will enable you to know the point your responsibility of the cargo begins and ends.

ii) You need to be aware of the service you opting to get; either port to port, port to door, door to port among others.

iii) Consider the origin of the cargo as well as the final destination, in which case here it is from China to Mexico.

iv) Consider the size, weight of the dimensions of your cargo and its value.

v) You need to know whether your shipment is considered oversized or may be out of gauge

vi) Consider the mode of transport you intend to use; either air or sea.

Consider the nature of your cargo, whether hazardous or not. You need to have the following tips in selecting a freight forwarder from China to Mexico.

  • Do a research on the industry of the freight forwarder you are intending to use from China to Mexico. This will also help you in knowing your responsibilities as well as theirs.
  • Select a freight forwarder which can be able to handle multiple types of shipment. This helps to know their experience as well as whether they have partners.
  • Select a freight forwarder which can handle the type of shipment that you intend to do. You can ask them to bring up an example of a similar shipment they had handled.
  • Choose a freight forwarder who is a member of reputable associations as this will ensure that they handle your merchandise with great care and diligence.
  • Select a freight forwarder who is having a network of agents in your destination. This will be very important for any DDU, DAP, DDP shipments. In case of any issues during transportation, the agents can assist you.
  • Ensure that the freight forwarder you are choosing have cargo insurance as this helps in the cases of theft, damage or loss.
  • Consider a freight forwarder who can be able to do deliver your goods at relatively lower prices as well as offering quality services.

Conclusion

As you can see, importing from China to Mexico is simple and straightforward.

All you need is to follow all the steps and ideas highlighted in this guide.

In case you find it challenging, don’t worry, BanSar is here to help you import from China to Mexico.

Talk to us today, for all importing from China to Mexico needs.

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