In our last newsletter we went over the costs of importing and showed you how to determine whether importing is a viable option for your business. This time, we're going to take a brief look at how to spot scammers and check that your international supplier is legit! Then we're going to give you our comprehensive importer's checklist. It's a great resource to help keep you on track when finding and ordering from an international supplier.

Scam Spotting Techniques

One of the risks of importing is that it is easy to inadvertently get caught up in a scam. International scammers are well aware of the demand for cheap products from China, Vietnam, India and so on, and there are plenty exploiting the naivety of new business owners for their own sinister purposes!

Possibly the most common type of scam involves scammers fronting as legitimate suppliers on the internet. They reel you in by offering amazing prices on hot selling items, but once they collect payment, they disappear into cyber space, leaving you scammed and without the stock you ordered - or your hard earned cash.

So is it likely you'll get scammed when you try to use an international supplier?

Not if you know what to look for. Once you know the typical characteristics of a scammer, it's usually pretty easy to spot them.

Here are some of the trademarks of international scammers:

• Prices too good to be true.

We really cannot emphasize this enough! If you find a supplier in China offering Kate Spade designer handbags for $129.95 or Apple iPhones for $81.99, you are looking at a scammer. People who want to avoid being scammed MUST do their market research before finding an international supplier so that they are aware of the typical retail and wholesale prices for the items they want to sell.

Even better is if you've already purchased the same or similar items from a local wholesaler and resold them. Then you'll know that 'Item A' has a wholesale price of around $85.00 locally, so  warning bells are going to ring when you see the same item for just $19.99 from China! Importing can save you money - but usually not that much money!

• Brand name items from China

As a general rule, 99% of brand name items from Chinese suppliers are fakes. For that reason it's best to only use Chinese suppliers for non-branded items.

• Doesn't accept safe payment methods

If your supplier only accepts Western Union or wire transfer, tread very carefully, as there is no way to get your money back once you've sent it.

• Minimal contact information

Does the supplier only provide their hotmail address or cell phone number? Stay away!! This supplier is a fly-by-night. A genuine supplier will list their physical address, a landline number and appear in telephone directories. Another good test is to actually call the number listed and see how professional the answer sounds.

• Dodgy graphics

Do the graphics on the supplier's website appear to be a bit grainy and poor quality? Does the supplier have Visa or PayPal logos on their site - but doesn't actually offer these payment methods when you check their FAQ? All these things are a VERY bad sign. Keep in mind, however, that there are PLENTY of good, trustworthy suppliers out there who have poorly made websites, but who will offer you a good service.

• Negative feedback on forums

It's also a great idea to Google the supplier's name plus forum, e.g. "Supplier name + forum", to see whether they have been mentioned in any forum discussions. If they are phony, chances are plenty of people will be posting about their terrible experiences on wholesale or online selling forums!

• They're new to the internet

You can also use Domain Tools to check how long the supplier's website has been around. If the site has been up for more than 2 years, you can be pretty confident that they are legitimate - most scammers tend to disappear fairly quickly.

All in all, there are tons of excellent international suppliers around, and as long as you do your research and build up a relationship with the supplier by emailing to ask questions about their products and service, you should be fine. Typically it's only people who rush into importing without researching or chatting to the supplier first that get scammed!

SaleHoo's Essential Importing Checklist

Each order will be different depending on your shipping terms (you'll remember those from last week i.e. FOB, DDU) and the whether you are using a freight forwarder and/or customs broker. Also, while this checklist is in a progressive order, don't panic if the order gets jumbled.

And for anyone planning a light import sent via a courier, you'll be able to skip the majority of these steps as the courier company will take care of everything for you.

Feel free to print this check list off and tick each completed step off as you go along.

Setting your importing goals

• Decide what it is you want to get out of your import: Is it lower prices so you can compete with competitors, better product selection, or a unique product unavailable in your country?
• Carry out extensive market research to ensure you know your target market, competitors and profit margins inside out.
• Set a budget for your import. This should be no more than you can afford to lose!

Find a safe supplier

• Search for a supplier using directories and internet searches.
• If you find a supplier outside of a safe directory like SaleHoo, then perform the following checks:
• Make sure the supplier accepts safe payment methods like credit card or PayPal
• If the supplier is from China, ensure they do not offer brand-name product, which are likely to be fakes
• If you are purchasing brand-name products from a supplier in another country, ask for proof of authenticity. The supplier should be able to send you documentation to prove the items are authentic and that they are an authorized dealer.
• Make sure the supplier lists full contact details on their website, including a landline and physical address.
• Use Domain Tools to find out if the supplier has been online for more than 2 years.
• Search forums to see if other people have feedback on the supplier.

Research costs and viability

• Email the supplier to ask questions about their products, such as quality, warranties, specifications etc.
• Ask the supplier for a quotation for the number of items you would like to order, including shipping.
• Check customs duties by ringing your Customs office, so you can get an estimate before importing
• If you need to arrange shipping, contact a Freight Forwarder and get an estimate on shipping. Get a contact so you are all ready when it comes time to placing an order. 
• Check whether there are any restrictions or special licenses required for the product you wish to order.

Placing an Order with an International Supplier

• Ask the supplier for a purchase order based on the quote you received. Review the purchase order carefully, sign, scan and email it back to the supplier. Remember that your order is not definite until the supplier has received this.
• Make a safe payment. Although wire transfer is probably going to be the only option for large orders, this is not a safe payment method and it's critical you have built up a good relationship with your supplier before you use this method. Alternatives include using Escrow.com, a Letter of Credit, or keeping your first order small, under US$300 for example.

Prior to shipment being released by supplier

• Arrange a Customs broker. Negotiate fees and arrange Power of Attorney if required
• If under Ex-Works shipping terms, specify to your supplier transportation method and pickup information.
• If required, prepare any additional information for special clearances such as FDA. If you have a broker, they will probably be taking care of this for you.
• If using a freight forwarder, confirm that freight methods and rates used in original landed cost estimates still stand. Book transportation.
• Confirm special packaging arrangements if required with supplier or forwarder.
• Arrange insurance coverage if necessary. If the supplier is arranging, then check their cover policy thoroughly. Confirm that method of transport and natural disaster is covered.
• If necessary, confirm hazardous cargo compliance with freight company.

After the shipment has been released by supplier

• Check with the supplier that the goods have been transported to the vessel.
• Confirm with freight forwarder that the shipment has arrived in your country safely and on time.
• Confirm broker is aware of shipment's arrival, has all necessary documents, and has been given inland shipping instructions.
• Confirm Custom clearance with your broker.
• Arrange/confirm inland delivery with carrier.

That concludes our section on importing; we hope you have found it informative! Next time, we are diving into places to sell your items. Sure, eBay gets lots of traffic and is a fantastic place to start, but are there other places to sell out there that could help boost your business even further? Find out in our next newsletter.

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