Discusses distribution network from how products enter to final destination, including reliability of distribution systems, distribution centers, ports, etc.
U.S. exporters entering the market in China should consider the most appropriate sales channel for their products and services. Options include working with:
- Trading companies: Act as intermediaries buying goods in large quantities to resell to retailers.
- Distributors: Take ownership of the goods then market and service the products.
- Sales agents: Earn a commission for selling the U.S. products.
- E-commerce: Conduct commercial transactions online.
Distributors and agents may operate within specific provinces or areas or across the country and may have exclusive rights to sell products within a particular area. Exporters may have multiple sales channels that may vary by industry or region.
Licensing of Products
Certain goods require an import license. Generally, applications for import licenses are submitted to the central government’s Ministry of Commerce (MOFCOM) or an authorized local office. Applications for many goods are approved as a matter of course; in these cases, the license is primarily used to collect trade statistics. For other products, approval is not automatic because the Chinese authorities wish to control the importation for reasons such as public health and safety or the existence of tariff rate quotas (i.e. two-stage tariffs, where the right to pay a lower tariff is granted to import up to a specific total quantity of goods).
For most manufactured goods, the Chinese importer should apply for an automatic import license, which is free, through MOFCOM. It normally takes two weeks or more for MOFCOM to review and approve the application (in Chinese only). U.S. exporters should ensure that their Chinese importer can determine whether the product requires an import license and will follow the application procedures.
Most businesses require additional permits and permissions from regulators specific to their industry. Depending on the sector, U.S. companies may need to seek business permits from multiple Chinese agencies.
To gain more knowledge about the required permits or licenses for a specific industry, U.S. companies can work with a specialized service provider or consult with a U.S. Commercial Service Specialist.