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Determining Whether You are Ready to Import

Determining Whether You are Ready to ImportYour skills and resources

Importing requires extra resources and special skills. If you are thinking about giving importing a try, before you start, you should assess whether you have the right skills and resources. If you see you have shortcomings, you must decide how to cope with them.

You will need to understand the customs procedures and insure you have the right paperwork. International trade often uses payment methods, like the letter of credit. It requires an understanding of payment documentation. You will also need to be able to handle foreign exchange if you agree to pay in a foreign currency. You will want to be sure your administrative systems are able to track deliveries and payments and manage the paperwork.

If you do not have the skills in house, you may want to invest in training, or use an import agent to handle all the specialist areas. You may also want to hire extra personnel to handle the added workload. If you don’t have the skills, you might decide to only deal with suppliers who handle most of the procedures.

Financial Resources Available to You

In addition to the skills necessary, you also need to think about the amount of resources you can devote to importing. It can be expensive and time consuming to research overseas markets and managing overseas suppliers. This is particularly true if you need to visit them. If you have limited resources, you may want to deal with suppliers who offer credit. Agreeing to pay promptly, however, could help you negotiate a competitive price.

Determine your Approach

You will need to decide how involved in importing you want to be. You need to know if you can cope with the paperwork, logistics and payment issues. You can get greater profit if you choose to deal with inexperienced suppliers and organize most of the logistics yourself, but it also requires more investment and tends to carry greater risks.

If you’re new to importing, you probably want to keep things relatively simple and low risk. Here are a few tips to keep it simple and easier for you.

  • Import from developed countries. If you choose to import from developing countries, it can be more complicated.
  • Deal with experienced exporters. You can usually negotiate a contract where they take responsibility for delivering the goods to your country. The supplier will, of course, want to build all these costs into the price they charge you.
  • Try to negotiate contracts in your currency, rather than the supplier’s currency. The supplier may want to build extra costs into their price for this.
  • Letters of Credit are required by some suppliers, particularly in developing countries. If you are inexperienced, this can cause problems for you.
  • If you are inexperienced, at least in the beginning, use third parties to handle your responsibilities. You can use an import agent to handle Customs clearance, and a freight forwarder to handle onward delivery to your premises.

Questions to Need to Answer

  • Do you understand international payment methods and can you handle them?
  • Do you understand international delivery contract terms?
  • Have you got the right legal advice?
  • Do you have the skills to handle import tasks like customs clearance and delivery?
  • Have you built relationships with third parties to do this for you?
  • How do you plan to develop your importing skills?
  • Have you organized any training?
  • Have you set up administration systems to handle importing such as tracking deliveries and payments?

Importing is not a “ready or not here I come kind of business.” You need to be sure you are ready and have the skills and resources to begin.

 

 
 
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