As your eBiz grows, and housing large stores of inventory becomes feasible, importing becomes a cost-effective way to source products. If you purchase in large volumes, the incredible deals you can find by purchasing directly from overseas manufacturers may outweigh the costs and complications involved. The key to importing profitably is to do your homework:
Research your suppliers
According to Peter Zapf, of GlobalSources.com and GlobalSourcesDirect.com, there are several steps you should take to find and select a manufacturer:
• Locate suppliers. Look for online sites that deliver imported goods directly, or that list manufacturer names and contact information. If possible, attend an overseas tradeshow, visit their booths, and ask questions in person.
• Verify suppliers. To ensure you’re dealing with legitimate suppliers, find out what steps a website takes to verify the manufacturers they list. Also, ask the suppliers if they participate in any tradeshows, and then go to those shows’ websites and confirm their participation. Most tradeshows research the manufacturers they let in; and a company that invests the money to take part in a trade show is probably genuine. Lastly, always be certain they provide you with the paperwork to prove they have all relevant certifications.
• Evaluate suppliers. Suggests Zapf, “Notice the customer service you receive—how long does it take them to respond to your inquiries? Are their answers thorough and friendly? If they seem capable, try them out with a small order. If you’re happy, go from there.”
Take steps to ensure product quality
• Request a sample, and study the product and packaging. Make sure the information and spelling are correct; and check the instructions. You don’t want them to be written in British English for a U.S. market.
• Keep in constant communication with your supplier. Email digital pictures back and forth of any changes.
• With a larger order you may consider hiring a third-party quality control firm to inspect and count your products at the factory, and perform a functional check. A small order may not justify that kind of risk-management investment; but with a larger order, you can more likely afford to pay for an inspection and still make a profit.
Confirm your shipping logistics
Your shipping agreement will assign handling of the different shipping costs and logistical factors to either you or the manufacturer. Depending on which agreement you sign, you may need a Customs broker or freight forwarder to handle your end of the shipping logistics. A freight forwarder will give you a quote based on the shipment size, the ports you’re going through, and the inland freight to your warehouse.
Plan ahead for duties and customs
All imported products are categorized and assigned a duty rate, which you can find in the Harmonized Tariff Schedule, available online. However, customs doesn’t decide how to categorize a product until they see it, so you may not know the exact rate of certain ambiguous products until they arrive. Even though two-thirds of all products have no duty, you should always look up the code—never assume they’re duty-free! You don’t want unplanned expenses eating away at your profits!
Enthuses Zapf, “When your e-business reaches a certain point, importing becomes a practical consideration—buying directly from overseas suppliers can provide your business with a steady source of low-overhead, quality products.”