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What You Need to Know to Begin

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By Chris Malta
Home EBiz Product Sourcing Expert

Importing can provide your e-business with cutting-edge products at rock-bottom prices. But it’s a very complicated process, and not one you want to go through alone. “Customs brokers and freight forwarders are your gateway into the world of international trade,” explains Custom House Broker Don Hoffman, of EveryOnlineShoeStore.com. “For commercial shipments, you’re legally required to utilize the services of a licensed broker. They’re the experts in getting the documentation and duty payments through Customs.”

Getting Good Help
Since most freight forwarders employ brokers to handle any customs issues, you might start by contacting a forwarder as soon as you make the decision to import products into the U.S.

You can find a forwarder in the yellow pages or search engines, but doing so is like playing the lottery—you have no idea what you’ll get. The real problem is sorting through third-party operations, posing as forwarders, who are really nothing more than middlemen, marking up your end costs. The safest way to find a reputable forwarder is through trade associations or publications.

A forwarder can help you calculate your costs up front to determine if you can be competitive with a product. Your manufacturer should be able to give you the tariff number for your product, which your broker will use to give you the local U.S. duty rate. You have ten days to pay once the goods have been cleared in the U.S.; but most companies pay within eight, to give themselves room, in case of processing errors.

Bond Options
When importing, you’re required to buy a bond that acts as insurance with Customs, in the event you should default on duties—although the bond doesn’t relieve you from legal repercussions should that happen. Bond companies underwrite the value of the shipment plus the duty, with either a single entry or annual bond. If you only plan to import once or twice a year, the single entry bonds are more affordable. But if you’re receiving goods on a regular basis, the cost of an annual bond may pay for itself. You need to make your determination based on the number of shipments you’ll be bringing in.

A Paper Trail
Your manufacturer will send you certain papers:

• a commercial invoice
• a packing list
• a detail sheet (depending on the type of product) that breaks down the components of a product and the way they’re manufactured so Customs can determine the duty classification
• an airway bill or bill of lading

You will need all these documents when you pay duties to Customs to prove what you owe; as the importer, you’re legally responsible for obtaining them.

Delivery Arrangements
Once you have your paperwork, let your forwarder know the goods are ready. They’ll contact the supplier, process the shipping bill, and book the shipment on your behalf. Your forwarder should be able to price out your shipment in various ways to see which would be most cost-effective. Air shipping is often overlooked as being too pricy, but it doesn’t require many of the minimums that ocean freight does and there are far fewer incidental charges involved.

Bringing commercial goods into the U.S. is an involved procedure, but don’t let the intricacies scare you. With qualified assistance, it can be a very profitable undertaking. Says Hoffman, “It’s labor-intensive; you have to follow through with everything. The key is to get good help—they can really guide you through the process and ensure you’re in ship-shape.”