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Importing Industry: Checklist To Save Time & Money
Many of the businesses today are engaged in some form of importing activities to acquire materials and goods that are not readily available in their country. As one the most flourishing sector nowadays, the importing industry allows a business to manufacture and sell products using raw materials that are generally cheaper to buy from other countries, helping them gain more profits. This also help the public since they will have more products to choose from in the market, especially those goods that cannot be produced locally.
If you are planning to take the path of importing in your business undertakings, then you must know first the fundamental factors that you should consider before you do so. In the world, if importing industry, there are a lot of issues that requires close attention in order to gain the maximum results you are after. Otherwise, you might just catch your business spending too much time and money on importing costs that can be avoided.
First and foremost, you should have an idea of the charges that you have to pay throughout the whole importation process, such as the shipping charges, brokerage fee, and of course, the duties and taxes. Knowing the exact amount to pay will save you from a lot of headaches when the goods have finally arrived at the destination port.
There are a lot of details that you should look out for in the importation process. Check out this infographic from Excelsior Worldwide Freight Logistics and learn the basic importing details you should never ignore in your business.
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IMPORTER CHECKLIST TO SAVE TIME AND MONEY
Being competitive in today’s market requires your overall business operations to be fast and smart in every step of the way, all while maintaining a sound profit and cash flow.
Many of the trade leaders nowadays see importing as a strategic move to overcome the strains in this overly competitive market.
Importing, especially if it’s the backbone of your business, can give you an upper-hand in the market if executed carefully. Whether it’s your first time to import products from other countries or not, it is always important to know the basics and other fundamental factors that can affect the whole importation process.
To help you carry it out, we’ve put together seven things that can actually save you time and money when bringing in those raw materials and products into the local area of your operations.
1. KNOW THE COST IMPORTING
If it is your first time to import, you have to know the various costs and charges you’ll need to pay before you place on order with an overseas company.
These costs could include:
- Ocean Freight (depending on incoterms 2010)
- Shipping Charges
- Brokerage fee and Processing
You’ll probably need to identify the correct customs clearance tariff for the goods you want to import to find out how much you will need to pay in customs and duties.
You’ll probably also need to supply the country of origin of the goods and the value (excluding shipping), to calculate the correct amount payable.
2. DEALING WITH EXCHANGE RATE FLUCTUATIONS
Exchange rate fluctuations are another potential risk that you could be exposed to as an importer. You’re probably buying goods priced in a foreign currency, which means exchange rate fluctuation can affect the final amount you’ll end up paying in your local currency.
The rate could move in your favor or against you.
There are a few ways you can deal with this:
- Transfer the risk to the supplier by asking them to quote in your local currency
- Purchase forward cover to protect you from fluctuations
- Add an exchange rate risk to your margins and carry the risk yourself
3. CLEARLY DEFINE YOUR EXPECTED PRODUCT
Some buyers approve a pre-production sample and a pro forma invoice and then wire the deposit. This is not enough.What about your own country’s safety standards? What about your product’s labeling? Will the packaging be strong enough to protect your goods during freight?
These are just some of the many things on which you and your supplier should reach written agreement before money changes hands.
Write your product expectations into a detailed specification sheet that leaves no room to interpretation.
Your methods for measuring and testing these specifications, along with tolerances, should also be included in this document.
And your contract should set forth specific dollar penalties if the specifications are not met.
If you are developing a new product with a foreign manufacturer, you should be sure to document that resulting product’s characteristics and production processes as you cannot count on your suppliers to give you this information if you later choose to switch to another factory.
4. FIND A REPUTABLE OVERSEAS SUPPLIER
The cheapest supplier is not necessarily the best supplier to deal with for imports. It is more important to find a reputable supplier.
You want to source a supplier who you’re reasonably sure:
- Won’t disappear overnight with your cash
- Will deliver on time
- Will deliver the products you have specified and at the level of quality expected
- Will keep you informed if there are any problems or delays
Ask to see a list of customers that your potential supplier supplies and contact them for references.
Do a credit check on the company, and if you can, spend the money to physically visit them and inspect their premises, plant, and the quality of their output.
If you’re not able to arrange a site visit, at least insist on samples before placing your order.
5. IMPORT PRODUCTS FROM A COUNTRY GEOGRAPHICALLY CLOSE TO YOURS TO SAVE ON TRANSPORTATION COSTS
Are you based in the Philippines? Then think about the importing from Taiwan or Indonesia.
The proximity shortens the transportation route, reduces the freight expense and allows for faster deliveries.
6. BUY LARGE QUANTITIES TO KEEP YOUR TRANSPORTATION COST DOWN
There is a huge difference between ordering 1,000 unites versus 10,000, and it’s not just in the number. It’s also in the freight savings.
Say it costs $500 to ship 1,000 hammers, or $.50/unit. From the same manufacturer, to ship 10,000 units, its $700, or $.07/unit.
It pays to negotiate larger orders to save money on freight costs.
Oftentimes, the price per unit also goes down when you order larger quantities.
7. CHOOSE A RELIABLE LOGISTICS PROVIDER
A reliable logistics provider can immensely help you reduce the strain in dealing out the overall importation process.
To help you decide which company to choose, here are the four characteristics that you have to look for to find out the best freight forwarding company:
- Owns the Carrier
- There are freight or forwarding companies that own transportation services like trucks and ships, thus eliminating the need to coordinate with a third party carrier
- As a result, such companies are able to take full control of the freight transport, thereby reducing cost, and promoting efficiency and reliability
- Has Significant amount of Knowledge and Experience
- It is critical for a freight forwarding company to have a streamlined process of shipping goods in order to promote efficiency at all times, regardless of the freight being shipped and the destination of the shipment
- Have Problem-Solving skills
- A reliable freight forwarding company need to be able to identify the problem across the logistics and supply chain, and provide the necessary solution to prevent any delays in delivery, as well as to prevent the recurrence of shipping problems
- Ethical and Professional
- Freight forwarding companies must consistently abide by rules and regulations of goods transfer, and they must also have a high level of professionalism
Importing goods from other countries can give your business and the market a win-win situation. By importing raw materials that are not present in the local market, you can raise your productivity since a greater variety of products can be manufactured, while at the same time, giving the consumers a lot of goods to choose from.
The aforementioned instructions can help you bring those imported goods while saving time and money- giving your business a long-term success in your market.
Created & Designed by:
WORLDWIDE FREIGHT LOGISTICS CORP.
Allow Excelsior Worldwide to help guide you through the export world.
Contact us today to learn more about our global logistics. Call (063) 5259775 or visit our website www.excelsior.ph