If you’re importing a product or service for the first time, it can be an intimidating experience. Not only are there lots of steps involved in the process, but you have to consider all of the regulations and requirements specific to your country. If you’re thinking about starting an import business or becoming a consumer who buys from overseas suppliers, here are ten tips that will help simplify this process:
What Is an Import?
An import is a good or service purchased in one country and manufactured in another country. Imports and exports are part of import export company in uae When a country’s imports exceed its exports, that country has a negative trade balance, also known as a trade deficit.
1. Search for suppliers
Compare and compare as many providers as possible. It is important to understand who you are dealing with. Is it the real manufacturer or an import export company ? Sometimes it can be difficult to tell the difference. Complete the factory tour to make the best choice. Make sure the factory name matches the company name you quoted. Find out who you are dealing with and whether your supplier is the actual exporter or uses an export agent or trading company.
2. Understand the components of the offer
Make sure the various quotes you receive are broken down by component cost, labor cost, and other costs.This makes it easier for you to compare offers and check for possible future price increases. For example, if the material cost of a product has increased by 30%, the supplier may request a 30% price increase. However, if materials make up 50% of the score, only a 15% increase would be appropriate.
3. Understand when assets become your responsibility
Insist on an appropriate Incoterm (the Incoterm defines the obligations, costs and risks for buyer and seller in transporting and delivering the goods).Incoterms specify when the import export company is responsible for the goods and what insurance is required. Familiarize yourself with terms like FOB – Free On Board, CIF – Cost Insurance Freight and EXW – Ex Works.
4. Understand the transport and logistics process
Too often deadlines are missed due to poorly managed logistics. Find your transport and logistics service provider.Make sure they can demonstrate experience handling loads from the area where the supplier is located. Take the time to understand each step of the process, including ground transit, container storage and consolidation (if required), shipping, and customs clearance after unloading. Make sure you understand the full cost of unloading the goods, including any government levies in your jurisdiction.
5. Local relationships are essential
The import export company in uae of goods does not always run smoothly.Chances are you’re not there when a problem arises. Because of this, it can be important to maintain a relationship with someone other than the supplier. This party, which may be a sourcing company, inspection agency or export agent, is a knowledgeable person who can quickly help get the process back on track.
6. Conduct a pre shipment inspection
Once the goods have been dispatched, it is extremely difficult to organize the return of the goods.Getting a loan or repayment can be just as difficult. Ideally, you should carry out an incoming goods inspection on all shipments. This process is even more important when dealing with a new supplier.
7. Insist on adequate insurance
If the importer knows when he is responsible for the goods (via Incoterm), it is necessary to insure the cargo. Many import export company mistakenly believe that insurance is provided by the shipper facilitating the import. This is not the case and it is a pity that containers are lost. A notable example was in February 2014 when 520 containers were blown up when the ship Svendborg Maersk was hit by strong winds and waves off the coast of France.
8. Currency hedging
US$ is the reserve currency for most import deals with China and the surrounding region. Fluctuations in the value of the local currency against the US dollar can have a significant impact on gross profit margins. One way for importers to avoid this risk is to work with currency suppliers to enter into FX forwards that fix the exchange rate.
9. Minimize your deposits
Most suppliers require prepayment before production begins. Deposits affect cash flow and increase transaction risk. Please note that if there are any unforeseen complications, it can be very difficult to recover deposits. Many suppliers try to avoid Letters of Credit (LCs), but they really should be part of every importer’s conversation with suppliers. LC can be used in place of deposits to minimize risk and cash flow impact.
10.Document all communications with the carrier, freight forwarder and customs broker throughout the process of importing goods
Use email, phone, text and social media to communicate. Keep a record of all communications with each party. Keep copies of all documents you send or receive in relation to your shipment (e.g., packing slips, invoices).
