Importing: the 10 basic steps
Importing is often thought to be easier than exporting and perhaps in some ways it is. But there can be many traps for the unwary and inexperienced and it is therefore most important that you understand the basic steps before you even think about placing an order.
1. Identify potential suppliers and obtain a catalogue, samples, prices and payment terms
Maxxeshop Limited can help in the process of becoming your buying agent and supplier identification. The price will be based on and include a reference to Incoterms, eg: US$100 CIF Australia 2000 Incoterms. Incoterms represent the foundation for the interpretation of trade terms between countries. Therefore, a reference to Incoterms in the contract price reduces the likelihood of a misunderstanding between you and the supplier.
2. Select a customs broker to assist with importation
Customs brokers expedite quick trouble free clearance of goods through Customs and Quarantine. Maxxeshop will recommend a suitable agent if required.
3. See the international division of your bank
Discuss the financial considerations with your bank:
- How will the transaction be financed?
- What will it cost to finance?
- Paying by International Currencies US Dollars?
- What will the bank charge?
4. Prepare a cost analysis to arrive at a landed cost
Make sure you include all costs e.g. local freight, handling charges, insurance and customs.
Calculating your landed cost on imported products
In most cases the costs are built into the price quoted by Maxxeshop:
- FOB: free on board - includes ex-factory price, inland transport and handling charges
- CIF: cost, insurance, freight - includes ex-factory price, insurance and freight to the port of arrival
- FIS: free into store - includes ex-factory price, insurance and freight to your warehouse.
In most cases the costs are not built into the quote by Maxxeshop are additional and include the following if required.
- Insurance - of goods whilst in transit against damage, loss or theft
- Local handling charges - at port of arrival e.g. unloading and storage at wharf
- Customs duty - check customs department or your broker for rates
- GST - 10% of value of taxable importation (goods + duty + freight + insurance)
- Import licence fees - check customs department or your broker for rates
- Interim storage charges - for storing prior to receipt in your warehouse
- Demurrage - charged on delays in clearing goods
- Quarantine fees - for storage of goods, usually livestock in quarantine
- Fumigation fees - for treatment of goods by fumigation process
- Transport - to local warehouse
- Testing and certification - for safety compliance
- Customs brokers fees - for facilitation of importation process
- Bank charges - for processing of transaction and money transfer
Note: Not all of the costs listed above are applicable in all situations
5. Is it commercially viable?
Having arrived at a landed cost and investigated the marketplace to determine what your selling price should be, is there sufficient margin remaining to cover all your business overheads and leave an acceptable profit?
6. Identify any special requirements
Establish if there are any special requirements such as import quota restrictions, certificates requires to import restricted goods or special inspections on arrival. Your customs broker can advise you on these matters.
7. Place an order with the Maxxeshop
A written confirmation of receipt and acceptance of order will be supplied. The terms and conditions of the order are clear to both parties e.g. product quality, specifications, quantity, price, price basis, payment terms, date required, freight arrangements and documentation.
8. Advise your customs broker of the details
Unless you intend to clear the goods yourself, provide your customs broker with comprehensive details of the transaction and copies of relevant documents to facilitate trouble-free and speedy processing and clearance of the consignment. Your broker will advise you when the shipping documents have arrived and make sure they are in order before you accept them.
9. When the goods arrive
When the goods arrive, make arrangements for your customs broker to clear them through customs (and quarantine if applicable). Maxxeshop will send you the bill of lading/ airway bill, commercial invoice and any other relevant documents.
10. Take delivery of the goods
Examine the consignment immediately for insurance purposes. Give a clean receipt for the goods once you are satisfied as to quality, quantity and condition.