DEVELOPING A SUCCESSFUL IMPORT STRATEGY
As in the case of exporters, there are a number of small and large corporations engaged in importing a variety of consumer goods, components or raw materials. Countries import for a number of reasons:
- The product is not available from domestic sources. Even when available, it is more expensive than imports;
- Increased profits and sales for businesses;
Salient areas to consider in import trade
- Identify the product to import: Starting your import business with a product or service that is familiar (with some knowledge and experience) to you will make it easier to market and thus conduct a successful sales transaction.
- Establish whether there is a market for your product: One way to consider a product’s import potential is to examine how a product is doing in the domestic market. Market research could focus on the characteristics of potential buyers (the need for the product and their ability to buy), strength and weaknesses of competitors. Markets can also be identified by visiting trade shows.
- Find potential suppliers for the product: Identify and select the countries from which to buy your product. Then, you can select potential suppliers via trade publications, contacts with government agencies (embassies, consulates), trade shows or the Internet.
- Identify marketing strategies: It is important to assess the best ways of selling your imports. You can sell your products directly to consumers, retailers or indirectly through agents or sales representatives.
- Familiarity with product classification: Familiarity with HTS classification helps importers minimize duties and avoid problems during the entry of goods.
- Examine and analyze import regulations: Products are subject to a variety of restrictions in importing countries. It is important to identify if there are restrictions such as tariffs, quotas etc. or licensing /documentation requirements and their implications for your imports. It is advisable to establish whether there the imports benefit from any preferential tariffs (preferential duty programs such as NAFTA) or subject to any quotas.
- Payment and financing issues: Payment terms are critical in obtaining an order. Importers must obtain appropriate payment and financing terms to conclude a profitable sales transaction. They must be familiar with the various sources of public and private sources of import financing.
- Familiarity with terms of sale: Terms of sale differ for domestic and foreign transactions. INCOTERMS describe the responsibility of the buyer and seller in international trade transactions. They were created by the International Chamber of Commerce and have recently been revised.
- Familiarity with documentation requirements: International trade runs on documents! There are a variety of documents that are critical in getting your products successfully imported in foreign markets. This can be facilitated by hiring a customs broker who handles the clearance of imports. US Customs requires that importers keep all documents related to imports for five years.
- Provide for adequate insurance: Given the risks in transportation, importers must ensure that there is adequate insurance for the cargo and establish the party responsible for such payment.