How to open an online store through a company in China

The question we are asked most by e-commerce sellers: should I buy on AliExpress or set up a company in China? The answer depends on the size you are now, not the size you intend to be.

AliExpress is for testing. You buy a few units, try the market, and find out whether the product sells at all. Its drawbacks are that the price carries a middleman’s margin, quality is not guaranteed, and you cannot modify the product or put your own brand on it.

Once you are past a few hundred units a month, buying direct from the factory starts to save real money — usually between 30% and 60% against retail platforms. That is where the entity question appears.

Setting up a company in China is not a requirement for importing. You can buy from the factory as an importer in your own country. A Chinese entity starts to make sense when you need a local bank account to cut transfer fees, when you want to contract directly with factories that prefer a domestic counterparty, or when you need to export under your own name and reclaim export tax.

The cost: an entity in China needs registered capital, a registered address, monthly bookkeeping and an annual audit. Those are recurring, and they are rarely mentioned in the advertising. Do not set up a company before you have the volume to justify it.

The order we recommend: test on AliExpress, then buy direct from the factory through an agent on the ground, then set up an entity once the numbers are clear.