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What inexpensive options are available in Asia for repairing defective products?

Posted: 2011-11-18

Full Question

I currently buy returned electronics in bulk and selling it further. However many of these items are defected, so I need to repair it here in the States which way too expensive. Are there cheaper resources in Asia for these kinds of repairs? Most of the replacement parts are made in China anyway.

Here is some background information to help you prepare your answer:

1.  Type of electronics: Nintendo DSi (game boy console); Nintendo 3ds (game boy console); Apple Ipad; Canon EOS Rebel T1i (Digital camera).Issues range from cracked LCD, broken hinges and power problems.
2.  As you see they are light and can go via air although they don't have to.
3.  Regarding value of the products, in the beginning it would be in the $100's since I would like to see how things work out, but eventually it will be in the 1000's.
4.  You may want to look at the option of using a free trade zone facility, since these products will be exported back outside of china.

Answer

Assuming the costs of international air don't eat up your margins, I think your best bet is to use a repair center in HK or one based in a Free Trade Zone on the mainland. While the labor and utility rates are lower outside of the FTZ and much lower than HK, you will find it very difficult for defective goods to clear PRC customs as they try to keep out such products for fear of becoming a grave yard for defective goods (e-waste) and if they do allow the goods in, you would need to pay a duty/VAT on the way in and the way out. HK is much more flexible, but there is a trade off with costs. FTZ labor rates are less than HK, but make sure you find a partner who has a track record importing these types of product because your items will most likely raise a few red flags at customs even at the FTZ, but a partner with experience will know how to handle the import and re-export after re-fabrication. You will also find that moving goods overland from HK to a FTZ and shipping relatively inexpensive items via express mail will both be a lot less of a headache than shipping in bulk via sea. If you do go down the air shipment route direct to mainland China, know that if your paperwork or order has any problems at customs, they will most likely make you send it all the way back. So do a few test orders first to make sure you and your partner can organize things well. Another option is to air into HK then use local courier to deliver to a FTZ in Shenzhen (nearest mainland city to HK).

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