What any new importer needs to know

So many clients I talk to have the problem of if they are ready outsource. Importing is big business, so you need to know exactly how much money you’ll spend. If they are ready, then a variety of reasons to consider when taking your business to the next level. The most obvious place to start is where to outsource from. They place where you outsource may be more important than price. Why? Well, the risk associated with the country reduces price savings. Check the ease of doing business rankings. This often gives a glimpse of the country’s ability to cater to your firm.

Likewise, the distance of the supplier from both the coast and your country may influence pricing. In addition, customs clearance fees, duties and brokerage fees may also influence pricing. Customs fees relate directly to the trade agreements between the importing and exporting countries. Free trade agreements (FTAs) improve foreign market access and reduce your bottom line. To really save from exporting, go big or go home. As an importer, you should always compare per unit costs between domestic and foreign suppliers.

Sometimes, the price reduction may not be worth it as communication may bog down production. I recently had a client who looked to purchase furniture, but could not provide samples. This led to delays in production. The further the supplier, the longer the transport time. Customs will influence your timing. If you do not properly adjust for customs clearance, then your timing will be off.

So when starting to import from abroad, I always suggest the following steps:

  1. Start small

Going small allows you to streamline the processes immediately before the larger sales. This will give you a good feel for the importation. These steps will allow you avoid getting a warehouse or over purchasing in the even the product fails.

  1. Market, market, market

Your product is new and entering the market. NOBODY knows your product—especially, if you are a new company. This means that you have to work on getting your name and your product respected.

  1. Go direct to consumer

Skipping sites like Amazon will add an air of authenticity to your company. Make a website and make sure your consumer can purchase directly from you.

  1. Properly label the items

People mess this up all the time. So much that I’m going to go over it in detail below.

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Firstly, labeling is a law in most countries—particularly when you are importing items for consumption. Failing to list the proper ingredients in line with FDA (or your importing country’s) standards can lead to a recall or bar the product from entering the country all together. Each order must have a test for quality; this includes a list of materials used.

The Food and Drug Administration contendgs, “Labeling mistakes are the biggest cause for food recalls, with the administration sometimes listing two or three recalls a day. Much of this is due to overseas distributors, as there aren’t specific rules in place for monitoring labels that are imported from overseas,”

Check the following steps to ensure you will not encounter labeling blunders:

  1. Check online with a keyword search
  2. Talk to your consumers or distributors
  3. Talk to your local regulator. In America, the Federal Trade Commission (FTC) protects consumers.
  4. Use third-party agents to check labels prior to leaving the exporting country.
  5. Talk to a customs broker to make sure the documents are filed appropriately.
About the author

David writes about economic activity throughout Southeast Asia and specializes on international trade relating to China. In addition, he holds a Masters Degree in Economics from Peking University.
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