Posted by Alec Jones on 06 Sep 2007,
(74) Comments — Import / Export
Are you a business owner who shudders at the thought of importing goods from abroad? The toughest part of importing lies in finding a reliable overseas supplier, which requires research, possibly some networking, and, of course, due diligence. However, after that, the shipping logistics, customs clearance, and duty payment, is actually a piece of cake. Since we all love to lick the frosting before biting the cake, I’m going to indulge myself here by talking about the latter and easier part first, and save writing about supplier selection for a future article.
Assuming you’ve already found a reliable supplier, you’ll need to figure how have the goods shipped to you you quickly and economically. You have four main options for shipping. Your choice depends on the volume and weight of the goods, method (air/ocean freight), speed, cost, control, and ease. Here’s the low-down:
- Best suited for: Speed, air, and shipments under 25 kg and $2000 value, or any value but no duty, a mutually trusting supplier relationship
- Advantage: Ease and control over entire shipment.
- How: Simply provide your supplier with your UFD account.
- Caveats: May be more expensive than using supplier’s UFD account (see option #2 below). Shipping costs may differ if supplier uses large or heavy boxes. Also, many suppliers may refuse this method since the shipper is accountable to pay UFD the bill if the recipient fails to pay, for any reason.
- Best suited for: Speed, air, and shipments under 25 kg and $2000 value, or any value but no duty
- Advantage: Ease and cost. UFD rates are often cheaper for shipping into the US than out of the US. For example, in a recent 40 kg shipment (3 large boxes) I made from Hong Kong to Seattle, I cut my shipping costs from $780 to $345 (56% savings) by having my supplier use their UPS account instead of mine.
- How: Ask your supplier to ship with their account, requesting a finalized quotation first. Also, request the air waybill (or tracking) number.
- Caveats: Keep any extra “handling charges” in check. Immediate tracking information may not be available from all destinations until 24–48 hours. Many suppliers may not agree to ship C.O.D. since they are liable for any charges that recipients refuse.
- Best suited for: Air or ocean, shipments over 25 kg and over $2000 in value, or goods that require special customs clearance
- Advantage: Control of shipment from warehouse to your door step. Freight forwarders know the ins and outs of the business, and handles for getting the shipment to you.
- How: You’ll need to find a freight forwarder service, and ask for a quotation.
- Caveats: Usually the minimum charge for handing a shipment is around $200, which includes processing all customs paper work, and truck delivery from the airport cargo bay to your location. This does not include the freight cost from your supplier to your airport, which varies by weight and distance traveled.
- Best suited for: Air or ocean, shipments over 25 kg and over $2000 in value, or goods that require special customs clearance
- Advantage: Supplier’s freight forwarder may have lower rates from supplier’s warehouse to your airport cargo area. You then cover the truck rate from your airport to your location.
- How: Ask the supplier for a quote. You’ll likely need to prepay shipping. When the air waybill is ready, email it to your freight forwarder, and they’ll handle the rest.
- Caveats: Usually the minimum charge for handing a shipment is around $200, which includes processing all customs paper work, and truck delivery from the airport cargo bay to your location.
Use your own standard UPS/FedEx/DHL account (“UFD account”)
Ship C.O.D. or prepaid via your supplier’s UPS/FedEx/DHL account
Hire your own freight forwarder service
Use your supplier’s and your freight forwarder service
Treat your freight forwarder or any of the major couriers such as UPS, FedEx, and DHL as your partner or even your own import/export division. Their international representatives will not only provide you with most of the information you need for understanding the customs process, but actually take your products right through it. In many respects, you can indeed have your cake and eat it, too.
Here are some freight forwarders I’ve used and liked
Both of these have offices on the U.S. West Coast. If you are located elsewhere, you’ll need to find one near you, or your nearest port or major airport.
Robert E. Landweer & Co., Inc., Seattle, WA
McClary, Swift & Co., South San Francisco, CA
Phone numbers of the three major international couriers
UPS 1-800-782-7892
FedEx 1-800-247-4747
DHL 1-800-225-5345
See more practical business tips.
Comments for "Importing Can Be a Cakewalk"
07 Sep 2007 at 06:09 AM
Hi Alec. This is great info - thanks. I’ve thought about importing, but I worried that it would be too complicated. Your post has just made it sound quite straightforward. Thanks.
07 Sep 2007 at 09:56 AM
Hi Catherine:
We’ve got another post coming up really shortly that will talk about the basics of the customs process, which can sound intimidating, but is actually quite easy as well.
The hardest part, I think, about importing lies in choosing a good, reliable supplier. You’ll want to do your due diligence. For me, referrals has been the way to go. I hope to post an article about that as well.
Kind regards,
Alec
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I think your first point about finding a reliable supplier is the most important. I always like to travel to meet with my suppliers face-to-face before beginning the business relationship.
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