Here’s what to keep in mind:

•    Use an independent testing and safety lab to do a product-design evaluation. The Federal Trade Commission
(www.ftc.gov), the U.S. Customs and Border Protection (www.cbp.gov), and the Consumer Product Safety Commis¬sion (www.cpsc.gov) are among agen¬cies that will insist your product meet safety requirements.
The CPSC has a list of independent testing/safety labs listed on its Web site. A lab will review your product for any red flags or possible safety problems and provide a list of recommended modifications. These labs also address the numerous labeling, packaging and other government regulations for im¬ported merchandise.
The last part of the evaluation will in¬clude a list of recommended production testing, which should be done in China, where it’s cheaper. Production testing also helps when it comes to obtaining product liability insurance, a must for businesses selling consumer products.
•    Spend the money on a perfect pro¬totype to send your overseas manu¬facturer. If you send only engineering and design drawings, prepare to spend a lot of time with back-and-forth e-mails answering questions. A top-notch prototype drastically reduces the chances for errors and goes a long way to closing the inherent communication gap. Have your prototype made in the United States. Visit United Inventors Association (www.uiausa.org) for a list of capable prototype specialists.
•    Prepare a detailed purchase order with the China factory. It’s for your protection. The purchase order is a contract and it typically includes buyer and seller names, addresses, phone/fax numbers, e-mail addresses, quantities, and unit pricing. Determine in advance if you will be paying “FOB China” pricing, which doesn’t include ocean freight and marine insurance, or “CIF USA” port pricing, which does include freight and insurance. Purchase orders also typically cover molding and tooling charges, wire transfer details such as the percentage for down payments (usually 30 percent), and percentage for bal¬ance due, which is paid only after you receive the proof-of-shipping document.
Make sure your purchase order in¬cludes a “stipulation for defective mer¬chandise” clause. Under a “comments” or “remarks” column in the purchase orders I issue for clients, I write:
“Seller (name) is responsible for defective merchandise. Seller will be responsible for the entire cost of merchandise, freight charges for return of defective items, to be returned to the seller, in addition to replacement of the defective merchandise or refund of buyer’s payment (in U.S. dollars, at the option of the buyer, via wire transfer).”
Include all specifications, product description, components, Customs information, labeling and production testing reports, packaging information, carton marks, and international ship¬ping documentation requirements. The more information you provide, the more protection you have.
•    Get a “binding ruling” with U.S. Customs to classify your product for import duties. While your order is in production – most initial orders can take at least 45-60 days – calculate the import duties you’ll have to pay once your shipment arrives at a U.S. port. A binding ruling from Customs let’s you know how much you’ll have to pay. Go to Customs’ Web site and look for information on how to apply for a binding ruling request or you can have your international trade consultant, or customs broker apply for this on your behalf. Customs can review and classify your product within 30 days, if you submit a sample product along with descriptive literature, specifications and components, etc. Customs also can provide the duty rate information on international labeling and marking issues. Proper labeling of your product and marking of your export cartons are important to help avoid having your shipment detained. Penal¬ties for improper labeling can be steep.
•    Before shipping, get a final shipment inspection in China. You need to know that the shipment meets quality standards throughout the numer¬ous cartons, that it is packaged properly, and that your product has all its components and labels. To play it safe, arm the inspection firm with photos or a sample of your product, as well as a copy of the purchase order, which details shipping marks for cartons, labeling requirements, and so on.
Once you’ve done all that, your shipment is ready for delivery. After your order is loaded onto a ship or plane, the factory will send you a copy of the shipping manifest, and a dock or cargo receipt as proof of shipment. That’s your cue to wire any payment you owe. Your supplier will give you an estimated time of arrival and will forward shipping documents stipulated in your purchase order to you, or a U.S. Customs broker.
Remember, it’s up to you or your consultant to send a copy of the binding ruling to Customs so the agent will properly classify your product and clear your shipment after it arrives at port.

Adapted from the “Essential Guidelines for China Sourcing: What Not to Over¬look When Manufacturing your Invention in Asia” ™
Printed by permission from EGT Global Trading – EGT@warwick.net / www.hometown.aol.com/egtglobaltrading

HELPFUL LINKS

1. Harmonized Tariff System of the United States:
www.usitc.gov/tata/hts/bychapter/index.htm
2. U.S. Customs and Border Protection: www.cbp.gov
3. Consumer Product Safety Commission: www.cpsc.gov
4. Consumer Product Safety Commission’s suggested in dependent safety/testing labs’ link:
www.cpsc.gov/businfo/testtoylabs.html (although it says “toys,” it does state that they handle “other products”)
5. Federal Trade Commission: www.ftc.gov
6. KRT Industries (for shipment inspections):
www.chinainspect.com

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