Importing can be an excellent strategy for expanding your business. It can help you reach new domestic markets, offer new products and reduce manufacturing and component costs. However a good import business doesn't happen without planning and research.
Tip 1: Plan, plan, plan
Before you launch into importing the first thing you need to do is analyse its feasibility and start planning. This includes:
- identifying the market for the imported product;
- locating suppliers;
- adhering to Australian import regulations;
- finding a customs broker;
- collecting import quotations;
- establishing payment terms;
- learning trade terminology;
- managing foreign exchange fluctuations;
- determining methods of transport; and
- securing distribution arrangements and agreements.
Tip 2: Get your import licences
Depending on your product there is a range of licences you need to get, and government agencies to talk to. These could include Quarantine and Inspection Services, Customs and the Therapeutic Goods Administration .
You should also check with Standards to ensure that the product you are importing meets Australian standards and can be sold and used in Australia.
Tip 3: Price to cover costs
It's crucial that you determine the viability of importing before you get started. Will the price you ask for your goods cover all of the costs involved with importing?
There are many additional costs involved in importing. These include, but are not limited to, the exporter's selling price, clearing charges, transport costs, customs duty, port charges, insurance, fumigation charges and bank charges.
For more information about costing and pricing view the Business Guide: Price Strategy
Tip 4: Learn the language of exporters
You should understand the fees, charges and service you are receiving because these terms and conditions may increase the exporter's selling price. Most reputable traders will use Incoterms which are set by the International Chamber of Commerce. Some of the most common trading terms include:
- Ex-works: the price quoted for supply of the goods at the seller's warehouse. It doesn't include transport and insurance costs.
- FOB (Free on Board) – ship or aircraft
- FIS (Free into Store) – total invoice price
- CIF (Cost Insurance Freight) - additional costs to ex works or FOB