Starting sales to China is a huge undertaking for small and medium sized businesses. Some businesses are already aware of the large e-commerce potential in China. The hard part of it is to find the right solution when entering the online marketplaces, such as Tmall Global, in China.
For large businesses the possibilities are broader, but for smaller and medium sized businesses it is tougher to find a solution that is not too risky, too investment heavy and which demand to many recourses regarding manpower and knowledge. One solution is to partner up with a multi-brand partner who has a web shop on the market place and who takes care of go-live activities on the shop, payment, marketing, customer service, returns and facilitate the logistic set-up.
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Helping you to play with the numbers – we will give you a calculator and you can test your various prices and create your own business case.
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Start filling in the blanks and find out how much you can earn on a single product sold in China.
Start playing with the numbers and find out at what price you can sell your products, and still earn money. Chinese consumers are willing to pay a higher price for foreign premium quality products.
Showcase for Apparel:
|Price on Nordic web shop||299 DKK|
|Alipay fee 1%||2.99 DKK|
|Category fee Apparel 5%||14.95 DKK|
|Ehubnordic fee 15%||44.85 DKK|
|Shipping – 0.5 kg||40.55 DKK|
|Incidentals 11,9%||20.81 DKK|
|Base price||174.85 DKK|
Good to know…
Nordic web shop: The web shop operated by Ehubnordic is selling Nordic quality design products directly to the Chinese consumer from a brand’s warehouse / web shop.
Web shop Marketing, customer service and returns are handle by the multi-brand owner Ehubnordic and this service is paid by the individual brands.
Shipping is paid by the Chinese consumer and included in the price. The product is shipped from the brand’s warehouse directly to the Chinese consumer.
Base price: The price a brand receives for its products when fees are paid.
Transaction fee (Alibaba’s payment service (Alipay)): 1%.
Category fees (Alibaba fee for doing business on their platform):
- Cosmetics 4%
- Apparel, shoes & bags 5%
- Children’s clothing & toys 5%
- Health care products 3%
- Home decoration 5%
- Food 2%
Multi brand partner fee to Ehubnordic: 15%
Price for shipping (from Denmark with EMS/PostNord): 0.5 kg cost 40,55 DKK and 1kg costs 81,10 DKK.
Incidentals (11,9% duty and administrative fee): 11,9%.
A great beginning is to start with few products, gain experience and knowledge of what is selling in China and what is not. Find a multi-brand partner and start sales in China without being there physically and obtain experience with demand and the online e-commerce market. The best way to start sales is through direct shipment from your warehouse / web shop directly to the Chinese consumer.
Why is this the best way? It is simply the best way as you thereby eliminate the trust issue, which is present among Chinese consumers. “Is this product original?”, “Is it produced to be sold to Nordic residents?”, “Is it a premium quality brand” and “Is it safe?” As you probably know China is known for its counterfeit products and that is why Chinese consumers are critical and suspicious.