Have you considered importing products from overseas?
In 2015, the United States imported more than $2.76 trillion in goods and services from overseas. The United States is the number one importer of products in the world. Two-thirds these goods consist of material goods and one-third consist of capital goods. Countless businesses in the United States (and abroad) have found that importing goods can save money, offer diversity in their products, and increase contacts around the world.
Importing can be simpler than you think if you are determined and dedicated to making it happen. Although the exact steps for importing varies from varies from country to country, Here is we will share with you the basic procedure for importing products from overseas.
Step 1: Making Inquiries
The first step in the importing process is finding a trustworthy supplier overseas. There are many online businesses who will connect you to overseas suppliers for free. Global Sources, Alibaba, and Forbuyers are several of the largest dependable Internet businesses who will connect you to suppliers and allow you to receive various quotes from different suppliers. Upon receiving quotes and communicating/choosing a trustworthy supplier, both parties will negotiate the standards and write a contract for the goods, terms of the business relationship, and conditions of the sale.
Step 2: Attaining the Right Licenses
Most countries in the world require the importing party to acquire an importing license. The United States is one country where an importing license is not required (although it is required for the importation of a few item categories). To acquire an import license, the prospective importer will make an application to an approved licensing authority. (prospective importers should apply for the import license at least one month before purchasing products from overseas.) Businesses importing from Canada should also obtain a business number (The application is actually free and can be obtained in a matter of moments.)
Step 3: Finalizing The overall Importing Process
After you have obtained the import license (if needed), the importer will create a contract and place an order. There are many important elements to be considered at this point.
You should be sure your contract with the company is clear and covers all areas of the agreement.
The payment method and payment terms should be specified.
The estimated manufacturing time and expected date the product should be ready for delivery should be established.
Your company’s standards and particulars for the goods should be clearly stated.
The shipper terms should also be specified: FOB, CIF, EXW, or DDP. (These shipping terms will determine which party will paid for shipping and insurance.)
Step 4: Letter of Credit
The supplier can’t risk not getting paid. Therefore, they will often issue a letter of credit (often referred to as ‘L/C’ or ‘L.C’) to the buyer and ask the buyer fill it out and return it to the supplier before the merchandise is shipped.
Step 5: Making the Payment
The method of payment and terms of the payment agreement will vary according to your familiarity with the supplier and options available to that company. Making the payment through PayPal, Escrow, or credit card is usually the best method for importers dealing with suppliers for the first time. These methods can be a little more costly, however, they offer more safety. (You don’t want a supplier to ‘run off’ with your money.) Importers who have been dealing with a supplier for an extended period of time (2 or more years) often attempt to save costs with wire transfers and other payment methods.
Step 6: The Documentary Bill
After the supplier receives the letter of credit, he will arrange for the shipment of the goods (according to the specifications in the contract). When the supplier ships the goods, he will send an Advice Note to the purchaser indicating the estimated arrival date of the shipment. For most countries, the exporter will issue a Documentary Bill which includes documents such as bill of landing, invoice, certificate of origin, etc. This bill is often forwarded to the buyer through a foreign exchange bank where the buyer can view the Documentary Bill and perhaps prepare a payment (however, the payment often will not be issued until the products have been received and approved. The exact time the payment will be released will depend on the details in the contract.)
Step 7: Customs & Clearances
After the goods arrive at the port, the buyer is responsible for taking custody of the goods and taking them to the desired storage location or business. However, before the goods can be claimed, the buyer will receive an endorsement letter, the endorsement letter allows the buyer to take custody of the goods. However, this bill will not be granted until the price of the freight has been covered. If the supplier has not agreed to covered the cost of freight, the buyer will make the payment at this point in time. The buyer will also acquire an “application to import” document which records the fees involved in landing the merchandise, which must be paid. Other documents that will be completed at the port-of entry include: Bill of Entry, Bill of sight, and Warehouse/Bonded Duties. As all these documents take time to complete, importers often appoint clearing agents to take care of the matters and take possession of the good for them.