According to SBA importing goods represent a significant market opportunity for savvy business owners with margins as high as 700%.
Here are 6.5 tips that can help you save time and money.
1) Choose the Right Business Partner.
You have a lot lose: TIME, MONEY, and your REPUTATION. There are many roads that you can select. At the preliminary stages you want to reach out to a foreign country trade offices, look at a few trade publications, search the web for manufacturer directories, attend trade shows and or hire a consultant if you have the budget and the funds to do so.
1.5) If you are looking for ways to "minimize risk". It is essential that you do your due diligence in selecting suppliers since this can affect your company finances and reputation. A subscription to a database such as Trade Mining can help you find quickly and very affordably the types of products that you want to buy and more importantly help you assess the trustworthiness of potential suppliers.
2) Familiarize Yourself with the World Trade Organization (WTO) and The U.S. Trade Representative's Office (USTR) . The WTO is the governing body responsible for overseeing trade agreements relating to goods, services, and intellectual property. And the (USTR) is responsible for developing and coordinating trade matters with foreign countries. These two organizations are a great resource on trade agreements and many other trade topics that may be applicable to your area of interest.
3) Get Acquainted with Currency Fluctuations. The relation between a product and money in any business transaction is the price of the goods. In the foreign exchange market the relation between one currency to another is the exchange rate. The law of supply and demand apply to foreign exchange rates just as any other commodity traded in the world therefore a lack of understanding of currency fluctuations can hamper your profitability.
4) Hire a Customs Attorney of Broker. All goods purchase abroad must be filed U.S. Custom Border Protection (CBP). A Customs broker or an attorney can be a great ally to your company, they can help you properly classify and assess the correct valuation of your imported merchandise and avoid you hefty fines. In the United States an importer can file an entry on their own, however for what it cost I would not consider doing business without a Customs broker. Here's a link containing a few tips from CBP
5) Paying For The Goods. The ideal payment method for a buyer is a consignment or an open account type of an arrangement, and the best payment method for a supplier is cash in advance. The middle grounds for both parties is the use of a letter of credit.(Seyoum 461)
6) The Role of Freight Forwarders. Once the transactions has been consummated between you and your supplier you have three choices to move your goods (inventory): air, water, land or a combination of these. If you are looking for economy and you do not have a sense of urgency to get your inventory your best bet is ocean shipping. Airfreight though more expensive can deliver advantages in the form of speed, reduce storage cost, and insurance cost (Seyoum 461). Hiring a freight forwarder can deliver your company an ROI and peace of mind. Freight forwarders can save you time and money in locating the best rates for your cargo, booking space with the air, ocean, and truck carriers, handling documentation, and the local transfer of goods to the port of loading.
Trade Mining provides Customs trade intelligence solutions that helps businesses engage more effectively in global trade, support decisions, and reach objectives. To learn more about us please visit www.CustomsTradeData.com