Section 2: What Products to Import from China to Make Good Money?

When planning to import products from China, the most crucial step is deciding which products to buy. This decision is essential for both e-commerce businesses and offline stores. Selecting the right product can greatly impact your success and profitability.

However, the ideal product choice varies depending on your country’s business environment and your specific business model. Many inexperienced importers often make mistakes in product selection, leading to wasted time and money. Some even abandon their business dreams due to these challenges. 

In today’s post, I’ll provide practical tips for choosing products by analyzing six different product types. This will help you gain a better understanding of what kind of products you should consider importing from China.

Trending Products

Trending products, often referred to as viral products, hot-selling items, or “hot cakes,” have a unique allure for both online businesses and offline stores. These products spread rapidly, much like a virus, attracting a multitude of new sellers eager to cash in on their popularity.

Typically, it takes about six months to a year for these products to go from unknown to ubiquitous. When demand peaks and everyone wants to buy them, countless sellers flock to China to source these products, hoping to grab a share of the market.

However, by this stage, it’s often too late to achieve significant profits. Demand begins to wane, and market saturation leads to limited profit margins. The real money is made by those who capitalize early in the product trend, selling in large volumes before the market becomes oversaturated.

Examples of Trending Products

• Loom Bands
• Selfie Sticks
• Hoverboards
• Fidget Spinners
• Masks (especially during the COVID-19 pandemic)
• Portable Umbrella With Fan

While you can still profit from importing these popular items from China, success hinges on having an efficient distribution system and robust promotional capabilities, rather than merely being early to market. For example, importing masks requires not only a solid distribution and promotion strategy but also the relevant import clearance qualifications.

Recommendations for New Importers

For new importers, I generally advise against starting with trending products. Success with these items depends heavily on market timing and insight. Only those with keen market awareness and the ability to launch at precisely the right moment can hope to make quick profits.

Instead, new importers should consider starting with products that have steady demand and offer a more predictable and sustainable business model. This approach allows you to build experience and infrastructure, reducing the risk of losses associated with the volatile nature of trending products.

Low-Value but High-Demand Products

Many new importers often consider low-value but high-demand products, such as toilet paper, printer paper, baby diapers, and disposable cups, as ideal options to import from China. They are attracted by the significantly lower wholesale prices in China compared to their local markets. Additionally, these products are always in demand, making them seem like a safe bet for steady sales, particularly to large companies or supermarkets.

Why Low-Value High-Demand Products May Not Be Ideal

Despite their constant demand and low cost in China, these products are not always suitable for new importers. Here’s why:

1. High Shipping Costs:
   • Although the products themselves are inexpensive, their low value means that the per-unit shipping cost can be disproportionately high. For instance, importing disposable paper cups requires large quantities to make the shipping cost per cup economical. The shipping cost for a full 40HQ container will be significantly lower per cup than a 20HQ container, but it requires a substantial upfront investment.
2. Local Competition:
   • Many countries have local manufacturers producing these high-demand products. When you factor in the local manufacturing costs and shipping expenses from China, the price difference may not be as significant as initially thought. This local competition can make it harder to offer a competitive price.
3. Storage and Handling:
   • Large quantities of low-value products require substantial storage space and efficient handling to manage inventory, which can add to your operational costs.

When It Makes Sense to Import These Products

1. For Your Own Company:
   • If you are importing these products for your own company’s use, the bulk purchase can be justified, especially if you have the storage capacity and can manage the logistics efficiently.
2. Established Relationships:
   • If you have a strong relationship with a large local buyer or supermarket that has committed to purchasing from you at a competitive price, importing these products can be worthwhile. This pre-arranged demand mitigates the risks associated with high shipping and storage costs.

Conclusion

For new importers, it is generally advisable to avoid low-value but high-demand products unless you have a guaranteed market or are importing for your own large-scale use. The hidden costs of shipping and storage, coupled with local competition, can erode the price advantage of importing from China. Instead, focus on products with higher value and better profit margins to ensure a more viable and profitable importing business.

Ordinary Daily-Use Consumer Products

Many ordinary products such as towels, T-shirts, hoodies, backpacks, and sunglasses are commonly considered for import. Let’s take socks as an example: producing a pair of high-quality cotton socks in China usually costs about $0.30. Shipping these socks to the United States costs between $0.02 and $0.20 per pair, depending on the shipping method and quantity.

If you were to buy a similar pair of socks from a retail store in the United States, it would likely cost you at least $3. This apparent 6-7 times profit margin makes importing such products from China seem attractive. However, these products are not always ideal for new importers for two main reasons.

Challenges with Ordinary Daily-Use Products

1. Market Dominance by Big Retailers:
   • In developed regions such as North America and Europe, ordinary products are primarily sold by large retailers. Customers tend to prefer buying these daily goods from well-established stores. This market dominance means that if you are a small retailer, you may face significant challenges, such as high store rents and labor costs, when trying to compete.
2. High Online Marketing Costs:
   • Selling these products online requires substantial marketing investment to stand out in a crowded market. The cost of online marketing can be as high as the rent for a physical store. Moreover, ordinary products often struggle to capture customers’ attention and drive orders, making it difficult to achieve profitability.

Over the past decade, many small factories in China producing ordinary daily goods have exited the market. Similarly, small online or offline stores selling these products have either gone bankrupt or are struggling to survive. Even in China, consumers spend $2 to $3 on a pair of good-quality cotton socks from large retailers or manufacturers.

Opportunities and Solutions

Despite these challenges, there are still opportunities to succeed with ordinary products. Here are two strategies to operate such products more effectively:

Solution 1: Product Differentiation

• Enhance and Innovate: Make improvements or adjustments to your products to differentiate them from ordinary types. For example, while the market for ordinary socks is competitive and low-margin, the Swedish brand Happy Socks succeeded by offering interesting and unique designs.

Solution 2: Target Developing Markets

• Focus on Developing Countries: If you are in a developing country where large retailers do not dominate the market, and ordinary products are still primarily sold in small street stores, you may find better opportunities. In these markets, the competition is less intense, and you can leverage the cost advantages of importing from China.

Conclusion

While importing ordinary daily-use products from China can appear lucrative, it is essential to understand the market dynamics and challenges. Competing with big retailers in developed regions and the high costs of online marketing make these products less suitable for new importers. However, by differentiating your products or targeting developing markets, you can find profitable opportunities in this segment.

Small Demand Products in a Small Niche

When it comes to e-commerce, the best products are often those with a small demand in a highly specific niche market, rather than products with broad market appeal. Small demand products present unique business opportunities. With fewer competitors, you can charge higher prices as customers are willing to pay more for these unique items.

Why Small Demand Products Are Lucrative

1. Less Competition: Fewer sellers mean less competition, allowing you to dominate the niche.
2. Higher Profit Margins: Customers in niche markets are often willing to pay a premium, leading to better profit margins.

In fact, 50% of our clients are e-commerce entrepreneurs, primarily running Amazon and Shopify businesses. Many of our million-dollar sellers focus on niche products.

Case Example: Expandable Garden Hose

Several of our clients selling expandable garden hoses have achieved annual revenues exceeding $300,000. However, as the market became saturated, the return on investment (ROI) diminished. This demonstrates the potential and also the need to adapt when a product becomes too common.

Other Examples

• Moving Straps
• Acrylic Makeup Organizers

For small-demand products in a small niche, dedicating your efforts can yield substantial returns. It is not uncommon to achieve $200,000 in annual revenue from a single product by concentrating on a niche.

Brand Products

Many new importers believe that brand products like Nike shoes or Xiaomi smartphones, made in China, can be bought cheaper directly from Chinese manufacturers. However, brand products have established distribution networks, and you typically can’t buy directly from the manufacturers at wholesale prices.

When Can You Import Brand Products?

Situation 1: No Local Retailers If there are no official retailers in your country, and you can handle the import costs, you might try importing brand products. Ensure you work with suppliers authorized to sell these brands. You will need a letter of authorization for customs clearance to avoid issues with counterfeit goods.

Situation 2: Second-Hand or Parts Importing second-hand brand products or parts can be lucrative. For example, second-hand iPhones or iPhone parts like screens and motherboards are commonly sourced from China by phone repair centers worldwide.

A specific product category

Focusing on a specific product category can be a great long-term strategy. This approach allows you to build a brand and a loyal customer base.

Case Examples

1. Women’s Underwear: A Singapore client specialized in women’s underwear and grew her business to a million-dollar enterprise within two years, with her store being featured as a success story by Shopify.
2. Cosmetic Products: An Italian client running a luxurious resort developed his own brand of cosmetic products, named after his resort, capitalizing on his specific niche.

Conclusion

To develop a successful multi-million-dollar business over the long term, choose a product category that interests you and explore all potential products within that category. Gradually, you can build your brand and establish a stable customer base.

The End

If you have any questions or need advice on whether a product is worth importing from China, leave a comment below or feel free to contact us. If you found this article helpful, please share it with your friends.