Import Goods: What Are Some Of The Hidden Problems
If you want to import goods to the country in which you live, there are a few essential things that you need to know to make your business successful. An import business could be one of the most lucrative businesses that you could create, as long as you know what you’re doing and go about it the right way.
Obviously, the first step is finding a company or person whose goods you want to import. Where you find these trading partners can vary a great deal depending on what kinds of import goods you are trying to get. You may work with companies strictly via the internet, by phone or Skype, or you may find your trading partners in person by visiting them in their own country. In any case, having a good relationship with the companies you work with will be very important to your success, so be sure to check them out thoroughly before you sign a contract.
Import Goods Rules and Regulations
The laws and regulations that govern the way import goods are dealt with can vary significantly from country to country, so it’s important to check these out in advance. Most countries will require that goods being imported are well documented. This may include a commercial invoice that gives the value of the goods being imported, a packing list of all the items in the shipment, a sheet that details how the goods are made so they can be classified and taxed, and any other documents required by customs.
Dealing with Manufacturing
The company that is producing the import goods may not have them in stock. This means that they may have to manufacture them after the order is placed and a down payment is made. The amount of time that this will take varies depending on the item. It may take anywhere from 1 to 4 months or even longer to get the materials. So you should take this into account when placing your orders and calculating your numbers. In addition, there may be a large minimum order required by the manufacturer, so you may need to store the product you order before distributing it to your customers. All these factors will effect your bottom line profitability.
Import Goods Payment Terms
Most, if not all, overseas manufacturers will want payment by wire transfer or some similar method in return for the import goods. They will usually require a down payment up front, with the rest due when the items are ready to be shipped. Sometimes an escrow service may be used to make sure that there are no issues, but these can be costly, so often you must just work on mutual trust with your trading partner. This may mean some quality control issues up front, but these generally can be worked out. Using a Letter of Credit between both parties banks is probably the safest way to go especially in the beginning when you are still building trust in your relationship.
Depending on where the import goods come from, there may be language or other communication barriers. While the best practice may be to employ a native speaker from the country to handle transactions, this is not always practical. Instead, keeping most communication to email and other written sources will cut down on misunderstandings, as most non-native English speakers read the language better than they understand it when it’s spoken. Be prepared for language to be a problem.
If you run a business that wants to start to import goods, it is important to prepare for the issues that may be involved. Making sure you identify some of the potential problems will help you make your new business run as smoothly as possible.
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