If you thought that importing goods from overseas is as easy as taking your phone, placing the order and waiting for the products to arrive at your doorstep, you’re highly mistaken as there’s much more to it. The entire process of importing stocks from abroad is a much more complex process and it is easier said than done. There are practically lots to consider before you move ahead and before you place your first import order. Are you someone who instantly falls for the lure of cheap costs and better products from abroad? If answered yes, here are few tips that can help you decide.
Tips to keep in mind before you import goods
➢ Do you have a local market for the goods that you wish to import?
Are you importing goods in order to resale the products? If answered yes, you have to ensure there is adequate demand for that product in your local market way before you begin to import products for reselling. Recognize the potential target audience and make a comprehensive market survey to know whether or not importing can be profitable enough. In case there’s not much demand of the product, you could end up with too much stock which is not worth a sale.
➢ Can you legally import the products into the country you live in?
Before you give in effort, spend time and invest your dollars on further research, you should first enquire whether or not you are allowed to import goods from another country and legally enter them into the country that you live in. In case you’re living in Sydney, you should take a quick look on the restrictions on importing rules. What are the few prohibitions that are applicable on things like medicines or chemicals or restrictions on specific items and products? Keep these in mind before importing.
➢ Will importing be a cost-effective option?
What will be the final landing cost of the item that you choose to import? Once you decide on the final cost of the item, you have to decide whether or not importing is going to be a cost-effective option for your business. Beyond the cost per unit, there are several other additional costs that you still have to pay and these can keep adding up. If you wish to make a reasonable return on investment, take into account all these costs before deciding.
➢ Can you deal with customs rate fluctuations?
One more potential risk that you could be exposed to being an importer is fluctuations of exchange rate. When you buy goods from abroad, you’re buying them in foreign currency and this implies that the prices will vary according to the exchange rate fluctuation. The fluctuation rate could either move in your favor or against you.
➢ Are you selecting a trustworthy supplier?
Don’t think that the best supplier is always the cheapest one when you deal with your imports. The most vital factor that you need to focus on while deciding to import goods is to locate a reputable and trustworthy supplier. You should find out someone who won’t run away with your cash, who would deliver on time and keep you informed in case there’s a delay due to some unforeseen reason.
➢ Are you an expert in handling overseas suppliers?
Handling foreign suppliers usually includes a deep learning curve as you might be dealing with several clients who speak a different language and whose values and culture differ from yours. There is greater miscommunication and misunderstanding when you have to deal with foreign suppliers who don’t speak the same language.
➢ Do you know the customs rates and trading terms?
Before you sign on the import order, you have to get a grip over the glossary terms and words used by the exporters and importers. You also have to ensure that both the parties have a similar understanding of all the terms involved in trading. If you live in Sydney, you have to keep in mind customs clearance Sydney
so that you can stay well-versed on the rules and regulations.
A guide for rookie importers – Do your import right
Once you have designed a plan for the kind of product that you wish to import, there are few other points that you have to follow in order to make the process of import as smooth as possible. Here are the tips that you need to keep in mind if you’re a new importer in the market.
➢ Establish faith on your supplier
There are several means of communication that you can choose from (email, telephone, Skype and fax) when you have to stay in touch with the supplier and hence you have to look for someone whom you can trust on and establish a good chemistry. It is also advised that you share an amicable relation with the top management of the suppliers as this lets you make sure you have a commitment towards the import program.
➢ Enquire whether or not you require a license to operate
Now that you have set up a good relationship with your supplier, you need to know the government laws and regulations that are applicable in both the countries. One of the most vital questions to ask your supplier during the initial phase of negotiation is whether or not you require an import permit for the country where you wish to import and resell the products. Before you start off with your business, you will also require a license from state and local authorities to conduct the business.
➢ Look for transport company that assists you with customs
Next you have to hire a transport company that can take proper care of the transport, collect payments, prepare the right kind of documentation and also take care of customs clearance at a flat free. There are many who believe they need to hire a customs broker despite working with a company but it is not so. Compute all costs to import the product, include taxes, transport, customs duty and insurance costs.
➢ Determine a payment plan which suits you
If you work with an experienced international banker, this can let you finance the sale, guide you in determining the terms of payments and also recommend you on the risk factors before you carry forth business from the overseas market. Make sure you establish a good relation with the banker on the best economical way of structuring payments.
➢ Calculate the measurements and weight
If you have to calculate the costs of importing the products, you should know the measurement and weight of product cartons. Ensure the merchandise can enter freely in the country you live in. You also have to be aware of the restricted and prohibited items which can’t be imported. Make sure you check and again double-check the list to make sure you don’t disobey the rules of your nation.
Once you’re stepping into the import industry, you should begin by following the above mentioned tips that are designed for the newbie importers.
Hiring a customs broker for your business – Necessary questions to ask him
Does your business rely on timely and smooth arrival of products in order to be called successful? If answered yes, you have to make the most appropriate choice with your logistics partner. Now the question is as there are several custom brokerages in the market, how are you supposed to choose the best one in the market? Let’s check out few questions that you should ask before hiring a customs broker for your organization.
Question #1: What constitutes your bills?
One of the best things to do with a new client is to ask for an explanation of their previous invoice from their present customs agent. The most vital question is the meaning of this fee. You must have come across several invoices where you won’t understand the categorization of fees like ‘invoice integrity fee’, ‘administration fee’ or ‘email phone fee’. Clients often ask what they charge for phone calls, mails or for reviewing their invoices. How can they charge you extra money for doing such tasks? Be sure the broker you choose has a transparent billing system and follows a fair method of business.
Question #2: Since I don’t import too often, why should I require a broker?
In case your business deals with goods which come across the border, you must have not engaged actively with the services of a customs broker or you may have had a customs broker with whom you prefer doing business. In reality, you don’t have any control over the costs that are billed on to you. The goods that reach your door usually come with a bill that you’re bound to pay, regardless of whether you import once in a day or once in a year. Hence, it is helpful on your end to have a customs broker who can take good care of your business.
Question #3: Can you also arrange shipping for my products and goods?
Yes, most of the brokers can do that for you. In fact, majority of the clients love to deal with a similar point of contact for every aspect of their logistics requirements. The customs brokers can offer services via trustworthy freight forwarders through air, land and sea, both internationally and domestically.
Question #4: Why does it show that my goods are duty free on your quote?
If you have already paid 6.5% on the same products with your last broker, chances are high that you can get back a refund on all your last imports. When you seek help of the brokers, they will not just make sure that the goods qualify under your country’s free trade agreements but they will also be processed in a proper manner. They should also help you with an audit of the last invoices and try for a refund for the money that you had mistakenly paid.
Responsibilities and duties of a licensed customs broker
Before you are ready to hire a licensed customs broker, you should know who they are and how they help you. A licensed customs broker will help the exporters and importers in meeting all federal requirements for shipments that travel internationally. They are also responsible for complying with the laws and regulations of the trade. If they violate any law or neglect their duties, the customs officials can issue penalties and fines. Here are few duties of a customs broker.
• Represents clients
In order to conduct customs business for another client, the customs broker needs to receive a power of attorney from his client. Clients usually issue them an unlimited power of attorney giving the broker the license to do any lawful deed during the transaction process. It entirely depends on the broker to verify the identity of the client so that he can be sure about having the authority to sign documents. Such power of attorneys stay put for up to 2 years.
• Payment of fees and duties
Customs duties have to be paid within 10 business days of the entry of the product. Brokers can pay the fees and duties to the customs and send a bill to their clients. During the event of the importer having overpaid his duties or if the products didn’t remain in the US, the broker has to submit request forms asking for a refund or a drawback of duty fees.
The customs brokers also have the responsibility of retaining and organizing all customs-related documents in a systematic and orderly manner for minimum 5 years from the entry date. The brokers should also retain copes of the power of attorneys that are presently active. The revoked power of attorneys should also be kept mentioning that they have been revoked for 5 years. Each and every record of the client is confidential and the broker is only allowed to share details either with the customs or with the client.
Therefore, now that you know every little detail on hiring a licensed customs broker, what are you waiting for? Hire one only after making sure you’re hiring a trustworthy and loyal broker who has your best interests in mind.