The global LED lighting market is booming right now.
Due to its technology, efficiency, and eco-friendly properties this lighting solution is quickly filling the offices and homes all over the world.
And with such product demand, there has to be a powerful supplier.
China is commonly known as the world’s factory, the industrial center, so it only makes sense to employ Chinese import resources to satisfy the global LED lights demand.
Here, we will discuss the LED market, the market of Chinese imports, as well as some how-to guidelines.
Strap in and lets light up the world together!
The first thing you need to do is research.
No business can shine without rigorous initial research.
Find out about the market as much as you can.
- Research The Best LED Manufacturers And Industry Information
- Reach Out To Your Chosen LED Manufacturer
- Check Out LED Exhibits
- Design Your LED and Place Your Order
- The Business Side of LED Import
- Types of Import
- The Documents You Need for Import
- Paying To Your LED Manufacturer
- Shipment Methods
- Shipping Routes
- What To Do Just Before Shipping
- What You Need To Pay For
- LED Products Quality Check
- Materials For LEDs
- Packaging Your Lights
- Label Your Packages
- Tracking the Importing Road
- Finding Your LED Distributor/Warehouse
- Step Into The LED Market
- Avoid The Pitfalls
Research The Best LED Manufacturers And Industry Information
You can start with a simple Google search.
At this point, the broader your question is, the better.
Once you browse through some manufacturers’ homepages, blogs, images, and videos, you can make your research more specific, as well as make notes.
Note prices, advantages, disadvantages, styles, materials, FAQs, anything you find useful.
Then you can go back to Google and do more research.
Another resource we encourage that you check out reports.
These can be technical reports, business reports, and – very important – market analysis reports.
To give you some statistics, the global LED market was valued at 45 billions USD in 2018.
This value was forecasted to climb up at CAGR 11.8%.
A big and promising LED light will be smart lighting due to its innovative technology and versatility.
Also, importing to Europe is looking more optimistic.
Of course, these are just surface insights.
To find out more, you need to do more specific research.
Beware, economy reports may cost money, but you can always look at free samples.
Reach Out To Your Chosen LED Manufacturer
After you feel satisfied with your online browsing and have settled on a few manufacturers, don’t hesitate to reach out.
Some websites have live 24/7 chats that you can use to talk to operators.
This is great because you wouldn’t have to wait for an email, but you’ll get some information right then and there.
Plus, the operator can provide you with additional resources and advice.
If the website doesn’t have operators, then just contact them via email or send in a quote.
Don’t worry about this step. You are the client and you are the boss.
Here you can mention the type of lights you want, their style, your budget, maybe send in some images of what you want.
While you’re doing that, you can check out available corporate literature, as well as history and reviews of that manufacturer.
If you are contacting several businesses, this step should eliminate most of them, leaving just one or two.
You can also request a free sample of the manufacturer’s standard light just to see how it works and check the quality for yourself.
Check Out LED Exhibits
Here is the active part of your investigation.
Research some LED expos and showrooms.
There are many Chinese expos all around the world, so you can go to such an event and talk to suppliers, see more LED lights and delve into the market more.
Most notable ones are the Canton Fair and the Hong Kong exhibit.
The Canton fair is the oldest, most representative, and the largest lighting fair in China.
It harbours not only manufacturers, but also private enterprises, scientific research institutions, and even foreign trade companies.
It is specifically targeted at import, so that is definitely an event to check out.
The Hong Kong exhibit is an international event, and it is the biggest in Asia and the second biggest in the world.
To give you an idea of how big, in 2018 there were 1355 exhibitors and over 20 thousand visitors.
There, you can see the latest LED technologies and take note of the best trends and designs.
Plus, you can talk to different manufacturers.
Our SMAlux team will be waiting for you!
Also, you can visit China.
Ask the manufacturer if you can have a tour around the facility.
If yes, go for it! If not, then request at least a meeting.
Either way, seeing your possible business partners face to face is definitely a plus.
Design Your LED and Place Your Order
When you are ready to place an order, request another sample based on your specifications.
To make sure that there are no misunderstandings, send in your inquiry in as much detail as possible.
Here is where all your previous technical research comes in handy.
Decide what lumen output you want, what beam angle, what light intensity, what color temperature, what design, what IP code, installation method, charging method, LED type, materials.
Anything that comes to mind, outline it.
Also, make a detailed sales contract.
It should include all your product specifications and quality requirements.
You may also be required to pay something in advance.
Usually, manufacturers want 30% of the entire sum in the beginning.
However, if they are asking for more, be very careful when placing your order and have stricter quality control.
The Business Side of LED Import
You can also request the manufacturer’s quote on Incoterms and city.
For example, FOB Shenzhen.
There are many Incoterms, so make sure to be familiar with those as well.
But basically, Incoterms are business terms that regulate the seller-buyer relationship.
It can include price, liability, shipping methods, and route.
If the order is small, the manufacturer may recommend FOB or EXW.
If the order is big, then they may sway you towards FOB or CIF.
These are just the most common ones.
FOB stands for Free on Board.
The most important takeaway from FOB is that you don’t pay sea freight charges.
It is the recommended Incoterm to use for Chinese import.
Other common Incoterms include FAS, CFR, and CIF.
FAS stands for Free Alongside Ship.
It outlines that the buyer is responsible for any damage to the products during shipment.
This term is good for the manufacturer, but not to you.
CFR, or Cost and Freight, means that the seller arranges shipment, but the buyer is still subject to damage charges.
CIF is Cost Insurance and Freight.
This outlines that the seller is responsible for insurance and loading the product, but during shipment the buyer becomes responsible.
This one is more or less safe both for the seller and the buyer.
Besides Incoterms, you should also look into shipment costs, as well as import taxes.
Regarding the shipping costs, many factors are at play here.
It depends on the weight of the cargo, the shipping method, the distance, as well as what the cargo is.
As for import taxes, there are plenty of online calculators to help you out.
But to get the best estimate, you need the HS code of your products.
Typically, different LED lights have a code of or close to 9405409000.
The way HS codes work is that half of it is international numbers, and half is national.
International numbers consist of a chapter, heading, and subheading.
National numbers just have divisions.
Also, you should know general regulations of the country you want to import to.
Currently, Importing to the US would give you some of the biggest taxes because of the trade-war, so the European market is far more welcoming.
Your overall landing cost depends on many things, so research them thoroughly.
Types of Import
Aside from regular shipment, you can opt for door-to-door shipping or drop shipping.
They are quite similar, but have a few differences.
Door-to-door is when shipment happens from the manufacturer’s warehouse directly to your customer.
This is done by specialized companies and can take off a lot of shipping stress you may have.
Here is where your bill of lading becomes super important since it can actually save you money.
Drop shipment is initiated by your customer.
They place an order, which you compile from different customers and send your own order to your supplier.
Then the manufacturer fulfills it and you ship it.
This is common for expensive products, but it is also prone to scams.
The Documents You Need for Import
Import is a business that deals with a lot of money, a lot of people, and a lot of products.
Thus, you need a lot of documents to back it all up.
Overall, this step is the most involved one.
Here, you would have to make a lot of calls and sign a lot of papers.
It is better to make a checklist and follow it on this one.
Let’s dive into it!
Some initial documents you need are a customs declaration form, a packing list, an invoice, a contract, and export permission for some products.
Some other important documents include an import license, a bill of entry and of lading, insurance, a declaration of conformity, and an industrial license.
Your invoice and contract need to be authorized by your embassy, which either you or another company can do within 2-3 weeks.
Also, you should ask your supplier for a Proforma Invoice.
This is a document that declares the value of the trade, the commitment of the seller to provide goods on specific terms.
It goes hand in hand with Incoterms and gives you some security.
Keep in mind to have your original documents, not copies, during clearance.
Also, note the issue date because it will help you track your product and notice any delays in shipment.
But you’re not done here – there are more!
You also should have a carrier signature from your shipping agent, a description of stock, and notification for a third party to receive the cargo.
For more information on compliance with regulations and documents, visit an expert website.
Once all your documents are sitting neatly in your or your agent’s file, the real money can come into the picture.
Paying To Your LED Manufacturer
You can pay with either your PayPal or through your bank.
PayPal is the safest and easiest options, so if you are a novice in the area of imports, use that, or make an account.
If you are more comfortable with using your bank, then contact your vendor for any and all information possible, such as swift codes, addresses, account numbers, etc.
Be sure to check everything many times over because this method is a little more prone to mistakes, which can cost you your money.
Once you’ve got the payment and your order all right, it’s time to do some business.
There are 4 main types of shipment you can use.
In most cases, you would actually have to combine these methods because one alone is not sufficient.
Sea freight is affordable and can carry large numbers or volumes of cargo.
However, sea and ocean freight requires more paperwork, has more taxes, and takes longer.
Thus, if you are importing large quantities as once, go for it, but if you are just starting, then you may not be importing as much, so other shipping methods would work better as they require less documents.
Furthermore, you can have either full container load (FCL) or a less than container load (LCL).
FCL is when your products takes up the full cargo, so you are importing a lot of product.
LCL is when you don’t have as much product to import, so you share the cargo with another importer(s) that go from the same port and to the same destination. Of course, LCL is cheaper, but FCL allows for more product to be imported.
Air freight is efficient, fast, and easy to track.
However, it does not carry as much as sea freight.
Also, air freight is the safest in terms of cargo damage.
Thus, if you are importing LED lights, you should consider air freight since your luminaires are less likely to crack and break during shipment.
Train freight is a middle ground between the sea and air freight.
It is affordable and fast.
However, it has an important limitation of being a ground-only transport.
Thus, with train freight alone you won’t be able to ship to the Americas, Australia, and Africa.
But if your target market is in Asia, Europe, or Russia, then train freight is a very viable shipment option for you.
Finally, truck freight. It is cheap, bound to the ground, and doesn’t ship a lot.
So, it can only be used as a secondary freight solution to get your goods from the port or airport or station to different warehouses.
This is the freight type that often gets combined with other types for a helping hand.
You can also contact professional freight forwarders from China or from other countries to help you with shipping and routes.
There are 3 main sea and air shipping routes.
They go through the Pacific, the Atlantic, and the Indian oceans.
These routes import to or stop in Japan, America, Pakistan, Korea, Mediterranean, Middle East, Africa, as well as Australia, New Zealand, and Indonesia.
The Pacific route will take your goods to North America, while the Atlantic takes them to South America.
The Indian route makes it possible for trade with East Africa.
You can also look at some major ports, destinations, and shipping companies.
As for land transport, there are also 3 main routes and a couple of detours.
These span the continent and import to Russia, parts of Asia, and Europe.
They are the China-Europe block train that goes all the way to Spain, Trans-Siberian Railway, stopping at St. Petersburg, and the Moscow-Beijing train. All of them go through Moscow.
The extra future detour will go through Turkey and into Europe, so you will be able to easily ship to the Middle East.
With these routes, you may have to employ additional air or train freight if you want to import LED lights to Finland or northeastern parts of Russia.
These routes, too, have their stops and shipping companies, which you can find in the same resource as above.
Knowing the route can help you plan out your freight more efficiently, as well as help you track your product.
What To Do Just Before Shipping
You would need to book loading space at a port or an airport or a station based on your chosen freight method. You also have to book space or rent a ship/airplane/train.
Then, the responsibilities would be different based on the Incoterms, but let’s say you agreed to FOB.
In this case, your manufacturer will handle the transportation of products from the factory to your booked loading space.
Then they will also deal with the customs export declaration and pay all local fees.
Once the cargo leaves, you are responsible for any charges, taxes, and fees.
What You Need To Pay For
With such a big undertaking as import, there are lots of fees waiting for you.
Now, what you pay depends on the Incoterm you and your supplier select.
But we will mention a few possible ones just so you know.
When you are placing your order, take into account the MOQ, or the minimum order quantity.
If you are assertive enough, you can get the manufacturer to lower it, which means that you can save money on prototypes.
Yes, you will have to develop and order prototypes before you go into mass production since you need to make sure your LED lights are just as you want them to be.
Besides the obvious costs of the products and the fees for documents, there are a few more.
The big one is shipment.
For most Incoterms you are the one that pays for shipment, and the prices can range based on factors we’ve discussed above.
Also, you have to pay the destination port/airport/station charges upon arrival of the cargo.
Plus arrival customs, VAT, tariffs and duties, inland transport to warehouses, as well as fees of renting space in a warehouse.
What is the difference between customs, taxes, tariffs, and duties, you may ask.
Well, taxes is an all-encompassing term for the other 3.
With tariffs and duties, the major difference is that tariffs are direct taxes, whereas duties are indirect.
Tariffs are imposed on goods, which is what you need to focus on.
Duties are imposed on the consumer.
However, import duties and general duties are different. Import duties are basically tariffs.
Customs is a government service that oversees taxes.
LED Products Quality Check
Before you order anything, you should request test reports and product certificates.
So important certifications include UL, as well as cUL.
These are for the US and Canadian markets.
Some more include AIG, and DLC 4.0premium.
For the European market, you should look at CE and RoHS certifications.
SMAlux has all those necessary certifications, by the way.
Also, it is not necessary to have full-on certifications, but listings are crucial.
You should also request an RFQ (request for quotation) file, which is just a more detailed specifications sheet.
In this file, the supplier should include their feedback and confirmation on your requested specifications and the order terms as well.
Plus, there should be applicable standards, unit cost, MOQ, production time, and payment terms.
This is more or less a full overview of the product, the safety, and the business.
Also, before you ship in bulk, have a third party conduct tests and determine the quality of the LEDs for you.
This is very important and will assure you that you are investing in the right product.
Whatever third-party testing lab or company you choose, make sure they have the ISO 9001 and AQSIQ certifications!
If you want to see the quality for yourself, then you can look at the CRI of the lights.
This value shows how well the LED light reproduces colors.
Cheap lights will distort colors, but quality light won’t.
This value, ideally, should not be less than 0.8 or 80.
Lights with higher CRI will produce accurate and vibrant colors.
You also see the CRI for yourself with the apple test or the arm test.
Basically, under cheaper light, the colors will look grey, greenish, dull, or too orange.
Also, you can check the pulsing of light.
Cheap lights will pulse more because of cheaper LED drivers.
This pulsing is bad for human eyes and may cause headaches over time.
Normally, you can’t see it, but if you record the light through your phone camera, you’ll see waves of light.
If they are prominent, then the quality is questionable.
Materials For LEDs
When designing your LED lights, beware that some materials are prohibited or restricted to import from China.
Prohibited materials include copper, silver and nickel alloys, as well as too much silicone.
Restricted materials include natural rubber, aluminum alloys, and CFC compounds.
All these may be used to manufacture LEDs or the designs of LED lights.
Thus, be sure to avoid them as much as possible, especially if you are a beginner importer.
This way, you’d have less to worry about.
Packaging Your Lights
A crucial part of shipping is packaging the products.
In terms of shipping containers, there are a few types of those.
For LED lights, it is recommended to use either a reefer or a general cargo container.
General containers are the most basic, cheap, and easy to find.
They are also versatile.
Reefer containers could be a consideration if you are shipping via a route that will get very hot.
LED lights don’t fare well in hot environments, so trying to keep the temperature a little lower can prolong its life.
Now, packaging the LED lights themselves is also important.
If you are opting for air or train freight, it is recommended to use either a wooden or a double-cardboard box for your LED lights, such as tube lights.
If you are choosing a sea route, then 10 layers of packaging should be covering your lights.
Also, cross-stacking the boxes ensures that they don’t topple over during shipment.
Label Your Packages
Each country has its specific labelling requirements, so you should research those.
Certificate marks need to be on the package and have specific dimensions.
For example, for European import, the CE mark should be impossible to remove and at least 5 mm in height.
You may also be required to include a Waste Electrical and Electronic Equipment label of 7 mm in height.
This label should also be accompanied by instructions on how to recycle and handle products like LED lights.
Another type of a label you need is an energy-related product label.
This label tell your consumer about the efficiency of the light, its energy consumption, supplier’s trademark, and identifier.
This label needs to be 9 mm in height.
This is also a requirement for the EU, but other countries have their versions and similar requirements.
Some other important labels include a “Made in China” mark.
Also, some packaging boxes need special marks, such as wood containers that need an IPPC mark.
It is common to ship things in wooden crates, so just keep that in mind.
Also, there are other marks you can use on your crates, such as “fragile”, or “handle with care”.
This is not necessary, but it benefits your products and reduces the risk that you’ll have to pay damage charges.
Tracking the Importing Road
Of course, you just sent your first shipment and you’re anxious about it.
So it is only natural that you want to track it.
There are a few ways to do it, but you’ll need to know some information.
Firstly, you should know the container number, the document number, the booking number, your master code, and general shipping line information.
You can track your products via these numbers and check the status of whether or not it has arrived.
Finding Your LED Distributor/Warehouse
Unless you are your own brand and have your warehouse, you will need one.
The most popular is Amazon.
Some countries have their own Amazon-like distributors, like Wildberries in Russia.
So you may have to research this, as well as how to change your importing plans to fit the warehouse’s agenda.
All these have warehouses that you ship to, register in site-specific database, and your LED lights will get listed on the site – or the online marketplace.
Each of these may also have a set of regulations, such as labeling and documentation, so make sure to contact the company and figure it all out.
Now that you’ve got a warehouse, it’s time to strike up a deal with a courier company.
Sometimes, your warehouse/distributor company will help out, but don’t count on that.
For example, Amazon FBA service will take care of delivery as well, but not every distributor has this type of service.
Just like before, you will need to research some courier companies.
These can also be your shipping companies.
For example, DHL handles regular deliveries, express deliveries, and long-distance deliveries, which is akin to import shipping.
FedEx, as well, has international shipping services as well as just courier services.
UPS has freight services that you can fill out an order form online – easy and convenient.
And TNT is basically FedEx.
Step Into The LED Market
Here you should be creative!
Keep in touch with your manufacturer, contact your warehouse and distributor regularly.
If you are selling the lights yourself, then make or improve your website, market yourself and your creations!
Avoid The Pitfalls
Many novice importers make mistakes that cost them loads of money.
To help you avoid them, we found a video resource.
Keep in mind that it is US-centered, but these mistakes could be taken into account for other import destinations as well.
For more information on shipping resources, you can also look through freight company blogs, follow our links, visit importing forums, or even talk to successful importers!
Chinese suppliers provide great products at a low price, creating the perfect start for your business.
With a rise in LED light popularity, as well as China’s production potential, importing is a goldmine.
If you carefully follow the steps and are diligent and motivated, your business will shine on the world.
And, remember, there are always companies, guides, and online mentors ready to help you every step of your bright and innovative way!