Why does the price of importing goods from China increase recenlty?
Most of the overseas importers should have received the stataments from their suppliers in China, which want to increase the price of goods. Our clients are not in China and they don’t konw the situation why suddenly price increse. Here I would like to tell you the details.
There are two mainly parts of Importing goods from China. They are price of goods and the freight cost. Unfortunately, they both increase.
1, Increasing of the goods cost
Many products’ price increase these days. Some of them even increase by 20%. This is a creazy number because sometimes there is no 20% profits for us at all. So it is very difficult for our clients to accept the truth that price does increase. Here we talk based on led lighting products to hlep you understand the reasons.
a, Reasons of price increasing on led lighting products
We have found out 7 reasons of increasing of price. Let’s see as below.
1, It takes half year to make wafer to chips
2, Factories make little stock for chips because of the low expectation for the year damaged by Covid-19
3, Huawei can’t get IC from outside, so it occupied some of the capacity in China
4, With the economic recovery in China, they need to deal with the orders before
5, In this case, factory prefer producing high profit products than low profit products
6, VIP clients enlarge their orders for stocks
7, In order to get some products, everyone starts to enlarge their orders. This creates a vicious circle.
2, Increasing of freight cost
As we all know, importers need to transport their goods by sea, by air or by train. So there is freight cost when importing goods from China. Let’s talk about the most commonly used method, freight by sea.
It’s said that the containers come back less and go out more. So there is no containers in China to use. Because the Covid-19, there are few people working on the port to unloading the goods and send back the containers.
What’s more, there is a bad news that a cargo ship got trouble in sea and lost many containers.
3, Will the price fall back soon
Many importers want to hold the orders until the price fall back. We don’t know how long would this situation continue. But in my opinion, do what you need to do now as before.