• Email or phone the dropshipper twice weekly to check up on stock levels. A drop shipper may not necessarily tell you if supplies are getting a bit low.
• Keep 2-3 ‘buffer’ items on hand in case you have orders that can’t be fulfilled through sudden stock shortages. This gives you more control over the ability to provide solid customer service.
• If the drop shipper is located internationally, then make sure you specify in your listing description that items will take 1-2 weeks to ship after payment. Honesty is the best policy - don’t try to hide anything from your buyers, this will only increase their mistrust of you if things do go wrong.
• Include your policy on returns in your listing description.
• If possible, use a dropshipper who is willing to add your brandname to the packages. For example, Msome let you upload your logo to their website where they will print it onto all your packages. They will also put your address as the return address, rather than their own company name.
• Consider enhancing personalization by giving your drop shipper hand-written thank-you notes to include in the packages. Not all drop shippers will be agreeable to this, but you can always try.
• Note that eBay has a new policy that requires you to list the location of the goods at the time of listing. If you are using a drop shipper, this means you must list China, Hong Kong, or wherever they are located. Some buyers may find this off-putting so I highly recommend including an explanation for the location in your FAQ or description. Explain the benefits to your customer – they are receiving unique goods at a much more affordable price than they could otherwise get! Don’t forget to offer a full guarantee and refund/returns policy to allay any fears over quality.
• Very Important!Follow-up every sale with a customer satisfaction survey. It is critical that you keep tabs on how well your dropshipper is performing. There’s no doubt you’ll be the first to know if the service is extremely bad, but you are less likely to hear if service is mediocre, even though it may still be bad enough to discourage customers from returning. Remember that eBay buyers are now able to give feedback on different aspects of the sale, so it’s now doubly important to ensure every stage of the sales process is excellent.

• Do they have any ‘extra’ fees? Genuine dropshippers should only charge you for the items you sell. Avoid companies that require a monthly subscription fee or something similar.
• Check the age of the site. Online dropshippers and wholesalers go out of business all the time either (a) because it’s a hard business to be successful in, or (b) because they are fraudulent. For these reasons, be very wary of dealing with new sites.
• Customer service is very important - especially in moments of crisis! - but sadly it is all too often neglected. Sending a test email will tell you a lot about the quality of service you and your customers are likely to receive from the company.
• Ask about warranties, guarantees, shipping policies and return policies. Everyone gets returns at some point so you need to make sure that you won’t have to foot the bill. Be sure to get in writing and signed!

There are several ways you can find the best dropshippers:

1: Searching Online - This is risky, but perseverance may pay off with hidden gems. Searching with keywords such as your product name ‘+ dropshipper’ is a good way to start. Just remember the best dropshippers’ sites aren’t always on the first few pages of results.

2: Ring the product manufacturer - You can usually find the manufacturer’s name on the item packaging. Manufacturer’s often have preferred distributors and should be able to give recommendations. You can always use email if the manufacturer is located in a non-English speaking country and you are concerned about communication difficulties.

3: Trade magazines: Distributors and manufacturers pay to advertise in these magazines so it’s an excellent way of finding current contact details. An easy way to find trade magazines in your area is to search Yahoo’s Business directory.

4. ThomasNet - If you are looking for components - anything from boot heels and microwave components to seals and gaskets! - then you will find the excellent online list of distributors and manufacturers on ThomasNet useful. The global register Thomas Global is also worth checking out.

5. Paid Directories - SaleHoo has an extensive list of drop shippers as does Worldwide Brands. But be careful - many paid directories are scams. It’s not uncommon for users to pay for access only to find outdated links or links to sites asking for more money.

6. Trade shows - Tradeshows are an excellent place to find some of the best dropshippers, although they are usually only for established retailers, so you’ll need to be able to show sales figures (unless your business has just started), business cards and a tax ID. However, nothing beats talking to suppliers face to face.

When it comes down to it, there is no getting around the hours that good research requires. Taking shortcuts with your research only means you are more likely to lose out in the end - either because of a scam or because you haven’t found the best prices and are not making enough profit.

It works like this: You find a dropshipper and set up an account. Different dropshippers have different setups but usually you can choose to credit your account, or, you can simply leave it empty and pay for each item as you sell it. Once you’ve created an account, all you need to do is grab the dropshipper’s provided photos and product descriptions for the items you wish to sell and list them on eBay or your website.

After you make a sale and receive payment, log into your dropshipper account, select the product you have just sold and take it through the checkout and pay for it. Enter the buyer’s address details, and the dropshipper will package it up and post it!

Basically, dropshippers take all the responsibility for handling and managing stock, saving you a heck of a lot of time!

But, because they do so much of the work for you, dropshipping is necessarily more expensive than buying in bulk. To give you a general idea, you could be paying an additional $2-$5 per item to cover the handling, postage and packaging costs.

Bulk buying seems more profitable on the face of it, but sellers often neglect to fully account for the time it takes to go and get the item, wrap it up and take it down to the post office and post it.

When all is said and done, both dropshipping and buying in bulk should be equal in cost, although many sellers prefer to buy in bulk to get the immediate profits, even though that effectively devalues their time.

Offer more choice to your customers

For new sellers the main advantage of dropshipping is the lack of risk. But for more advanced sellers, I believe that the greatest benefit dropshipping holds is the ability to offer more choice.

You may have heard the phrase ‘long-tail’, a bit of a marketing buzz-word in recent months. In a nutshell, the ‘long-tail’ means targeting the far corners of niche markets that are normally untapped by selling a lot of low-demand products. Experts have worked out that when added together, sales of low-demand products actually exceed those of single products with very high demand!

Drop shipping enables you to take advantage of that strategy very easily. For example, a DVD seller using a dropshipping supplier could promote 400,000 different DVDs! They are able to make money by selling a lot of low-demand products without any risk or storage inconvenience. This gives the DVD seller a massive advantage over regular DVD stores.

Of course, dropshipping isn’t without its risks.

Probably one of the most common problems sellers have with dropshippers is sudden stock shortages.

A sudden rush for a particular product might cause the dropshipper to sell out, leaving you in a bit of a sticky situation if you’ve got orders to fill!

Having no control over your inventory also means that if buyers ask you for a unique photo of the item (which some do after being caught out by fraud in the past), you are unable to meet their request.

This leads us to the fact that Drop shippers aren’t perfect…but if they stuff up, you get the blame. If the dropshipper packages the item poorly, causes delays in shipping, or makes a mistake with the order, then you are held responsible, even when there is very little you can do about it.

You make money but supplying an item that has a high demand and not enough supply – ensuring your customers are willing to pay premium prices in order to own it.But despite this proven maxim, there’s a common myth that it’s possible to sell ice to Eskimos with the right strategies.

Don’t believe it. Generally, we’ve found that it’s all but impossible to create a demand from scratch when you don’t have a multi-million dollar marketing team behind you.

Anyone Can Import

If you have never considered importing and believe that importing is very complex and high-risk then you’ll be pleased to know that this is not the case!

• You can very easily learn how to import goods and make the profits you’ve dreamed of.
• You can learn the simple secrets of locating overseas suppliers and manufacturers, importing goods and selling them for a good profit.
• You can even do it from the comfort of your own home!

Importing isn’t difficult but it does require dedicated research and a willingness to learn from mistakes. Even with the best advice in the world, you’ll still wish you had done something differently the first time you give it a go.

So how do you find a product with high demand?

The answer is: you need to either find a product that is rare in your country and thus in high demand, or, a product that is available where you live and extremely popular – but you can source it very cheaply from overseas and offer it on eBay for a lower price than elsewhere.

To find a high demand product, you must first increase your awareness of emerging trends and niche markets. But before you do, get rid of the common misconception that popular means eBay’s top 10 searches. This is simply not the case – popular doesn’t just mean iPods, digital cameras, cellphones and designer handbags. Popular does not mean that millions of people are searching hourly for the item.

In reality, to make money online you only need a moderately popular item. As long as it has the potential for you to scale up to selling 50-100 a day – or however many you need to make serious money – then it can be successful. Think about it: stamp collecting and golf are extremely popular with thousands of people all over the world who collectively spend millions on them each year. Yet gold and stamp collecting are not in eBay’s Top 10 searches!

What we are trying to say is that niche markets are where you should be focusing.

To find them, start paying attention to newspaper headlines, magazine topics and new product releases. An article on smokers struggling to quit their habit, faux fur as an emerging fashion trend, new technology for improving golf swings – it’s all useful market information.

eBay itself has some useful market information in eBay Pulse and the Seller Central area. Visit there frequently to see what categories are doing well. Another idea is to see how many items are listed in each category and hone in on ones that have good sales and low product numbers. Just click Search on the eBay home page leaving the keyword area blank and All Categories selected. You’ll now be able to see how many listings are in each category. Click on a category, and to the left in the yellow box, you’ll be able to see numbers for the subcategories as well.

Categories of Goods to Import

When you are starting out it is advisable to choose goods that are light and small because freight will be your biggest cost. This means that the REAL cost of an item includes the freight as well. You might well be overjoyed at the sight of an item advertised for $1 apiece in China, but if freight costs you $10 per item your actual cost per item is $11. In same cases, this will rule out the viability of your idea and you’ll have to start afresh.

Avoid Designer Goods

One category we strongly advise against is designer goods. Almost without exception, all goods advertised as designer that are manufactured in China are fakes. ON the whole, designers have their products made in Italy or France to ensure exceptional quality and they also often destroy left-over goods rather than sell them wholesale. Plus, if you get caught importing fake designer goods, you can face heavy penalties and even jail sentences. These categories are usually hugely over-subscribed anyway. In sum, designer goods are not the best way to make money unless you happen to have contacts in the industry. There is more money to be made by importing cheap, unbranded radio control cars for example, where you can make $30-40 off each one and shift 150 a week.

Easy Steps to Importing

Let’s look at the simple steps you will follow to import items to sell on eBay and anywhere else that you choose.

Step 1: Research: Market research is paramount. You must be 99% certain the goods you import will sell, otherwise you will lose money.

Step 2: Finding suppliers: The Internet is a great way of finding excellent Chinese suppliers – however it is also full of fraudulent sites. You need to take time and care over authenticating suppliers that you find through general Internet search. Then contact the supplier and ask for a sample.

Step 3: Time to place an order, organize freight and make payment for both. You will also need to talk to a customs broker to make sure you fill in the correct forms.

Step 4: You receive the goods: perhaps paying a customs fee. Of these four simple steps, the most important are the first two. Research is time consuming and can sometimes be frustrating, but without it, you won’t have a hope of making money. If you are working part time on importing, be prepared to spend a couple of weeks researching before taking any action. If you are fortunate enough to be able to devote yourself full-time to the course, this will take less time.

This lesson covers the logistics of importing goods from China to your country. If your shipping terms are Delivered Duty Paid or Cost, insurance & Freight, then you won’t have to do anything until the merchandise arrives in your country. But if your terms are Freight on Board, it will be up to you to organize a large part of this process yourself. And remember, even if you are lucky enough to get DDP or CIF now, it might prove impossible to negotiate on subsequent imports from different companies.

Arranging logistics can be tricky to set up at first, but if done well, can save you a lot of money.

Your first priority is to make sure everything runs smoothly and that every participant in the process is reliable. Your second is to ensure that every stage of the process is as cost-efficient as possible because this is where your costs can really add up. It’s vital to research the best freight company, transportation and storage options. You mightn’t get it right the first time, but when you do, you’ll be able to enhance your profit margins significantly.

Below is an outline of each stage in the Import process:

1. Manufacturer/Wholesaler (Supplier)

You pay the manufacturer for the cost of your goods and any packaging. The manufacturer will also prepare export documentation. As we saw in the last lesson, shipping terms such as Delivered Duty Paid (DDP) and Cost, Insurance & Freight (CIF) are much more advantageous than Freight on Board (FOB). The idea is to get the supplier to handle the inbound risk and just pay the cost for a delivered product. If you do get DDP, then you will not have to concern yourself with the following process, however FOB and CIF are much more common.

TIP: Whatever terms you get, don’t forget to check the insurance terms. You need to make sure your container is insured for 110% of the FOB cost.

2. Road Haulage Company

Collects from supplier and delivers to docks/airport.

3. Sea Freight Company

You (or the supplier if CIF, DDU or DDP) negotiate a rate with the company to transport your goods. If you need less than a container load, contact a freight forwarder. The Sea Freight Company then checks goods/documentation and loads onto the vessel. Approximate cost can be anywhere between $1500 and $4500, depending on the volume of the shipment.

Most freight associated charges are calculated per kilo on the Volume weight of your goods and small lightweight consignments are often subject to minimum charges. A professional freight agent will advise you of these charges when they quote you for shipping your consignment.

Goods transported to destination

In your country: Goods are unloaded and if all documentation is in order Customs clears goods. You pay any duty and tariffs required. Remember than unless you have set up credit facilities in advance with your shipping line and Customs, everything has to bepaid before your goods are released and additional storage charges are applied to any delay.

For example, if you wish to pay a shipping charge by check, it will take 5 working days to clear. In the meantime your goods are charged storage at an average rate of $0.14 per kilo per day. A consignment of 1000 kilos stored for 4 days would attract storage charges of $560.00. (Note these amounts are not based on real data. Actual costs may be more or less than the example).

There are normally several payment options you can choose from, the most common being:

1. Cash
2. Deferred payment — only available to importers who are holders of a deferred account. (See your Customs office to arrange).
3. Broker deferred — available on the request of an agent who holds a broker deferred account.

4. Transportation to Warehouse

You need to arrange collection from docks/airport with a freight company.

5. Warehouse Storage

Warehouse will charge to receive the product (cost of labor involved in handling the goods), plus there is long-term storage costs. If you use a broker and/or a freight forwarder you will need to budget for another couple of hundred dollars on top of that.

It is possible to negotiate the cost of all stages of this process and shopping around can ultimately save you a lot of money. For example, the location of your warehouse makes a lot of difference. In the USA, some parts of the country have much cheaper warehousing than others.

For a further breakdown of Sea Freight costs and excellent information on importing procedures and terms see:

http://www.skymartworldwide.com/t_help_simpleguideimporting.htm

Customs Duties and Taxes

Every country has different duties and taxes on imported goods. As you are importing goods from another country – such as China, Hong Kong, India etc - you will very likely pay import duties, although there are some exceptions. Very generally, tariffs and duties are lower on goods that are unavailable in your own country, while anything coming under FDA jurisdiction can require special licenses and is often more complex.

The best way to find out how much you have to pay is by visiting your country’s customs website and reading the information there. You will also find phone numbers and contact details for help with more specific information.

A broker is a must for a first time import. Categorizing your product to ensure it gets the appropriate tariff/duty is a complex task and a broker will help to ensure you don’t end up paying more than necessary. Also, if a portion of your documentation is incorrect, the delay that will inevitably occur can be cripplingly expensive. As you won’t be able to move the product while the documentation is being amended you may end up paying demurrage - a hefty fee for storing your item in docks/yards for more than the couple days they are allotted.

For subsequent imports - when you are comfortable with the requirements - you can choose to save the fees and do it yourself.

• USA http://www.customs.gov
• Canada http://www.cbsa-asfc.gc.ca/travel/postal-e.html
• UK http://www.ccra-adrc.gc.ca/customs
• Australia http://www.customs.gov.au
• New Zealand http://www.customs.govt.nz/default.htm

• A completed C88 form
• An attached copy of the supplier’s invoice
• Goods classified appropriately in order to ensure that the correct tariff is applied
• Any special licenses that may be required

What documentation needs to be attached to my merchandise?

Your merchandise needs to have a copy of the import C88 form (see more details below) and a copy of the supplier’s invoice, or a letter if their has been no sale. The invoice must clearly state what is in each package and contain a full description of the goods.

What is a C88?

A C88 is the customs declaration form all importers (or their agents) need to complete in order to to declare goods to Customs. The form asks you to specify information about the parties involved in the import, the means of transportation of the goods, and statistical data. A paper C88 form presented manually is certified when presented by being stamped by a Custom’s official. Alternatively, details can also be submitted electronically(through CHIEF), and if this is the case, Customs will issue an Entry Acceptance Advice in place of a stamp. This is proof that the entry was input and accepted by Customs.

What duties will apply?

Duties and tariffs depend on the nature of your merchandise and what classification it falls under. It is your responsibility to choose the appropriate classification for your goods based on an accurate description. Note that for some products you may need to apply for a special license – this is particularly relevant for goods imported from outside the EU.

Goods classification

Your goods will be processed through Customs more quickly if the correct classification has been applied. You can search for the commodity code and relevant import duty for your product on the Internet. If you are unsure what the correct code should be for your goods, then you can contact the Tariff Classification help-line on 01702 366077 . The helpline gives a verbal reading on the appropriate code and respective import duty for a particular product.

A written ruling on the product’s Commodity Code known as Binding Tariff Information (BTI) can also be obtained. This is advisable if you are importing goods such as complex food products. For these products, the classification process involves closer consideration of the product’s composite ingredients and is legally binding.

There are a number of different duties that may apply:

• import duties
• ‘additional duties’ on flour and sugar
• ‘countervailing charges’ on fruit and vegetables
• ‘variable charges’ on processed goods
• ‘compensatory charges’ on oils and fats
• ‘extra charges’ on eggs, poultry or pig meat
• ’sugar levies’ on processed goods with sugar in them
• Value Added Tax (VAT)
• excise duty on alcoholic beverages

VAT

The UK standard rate of Value Added Tax (VAT) is 17.5%. Generally, retail food products do not have VAT on them. But the exceptions are:

• Ice Cream and similar products and mixes for using them
• Confectionery
• Alcoholic beverages
• Other beverages, and preparations for making them
• Potato chips (crisps), roasted or salted nuts and some other savory snack products
• Products for home brewing and wine making

What happens when my merchandise arrives at Customs?

Your merchandise will be checked by Customs to ensure that it applies with import regulations. Once an entry has been accepted by Customs it is issued with a unique Entry Number. This number will always follow the format of: three digits (port / airport code), followed by six digits (including zeros), followed by a letter, followed by the date of acceptance; for example 120 – 112034B 190302.

How do I pay my import duty?

Once an import C88 has been submitted and accepted by Customs and Excise, any monies payable against that import are due. You must pay all duties and tariffs before your goods will be released. Importers with goods arriving regulalry usually pay by using a Deferment Account for them or their agent. You can also pay by sterling traveller’s cheques, Bankers Draft or Company Cheque.

For more information see:

• HM Revenue and Customs
• British Chamber of Commerce Export Country Profiles
• UK Trade and Investment
• US Embassy – UK import procedures

The National Advice Service will be able to advise you on any matter relating to importing to the UK if you call 0845 010 9000.

Do I need to meet any requirements before I can import goods into the US?

You don’t need a license to act as an importer but you will need a business tax number, which you’ll have to get through the IRS. This is the number you put on all customs paperwork that requires an ‘importer number’. Note that there are some items that require a license or permit from various government agencies in order to be imported, e.g. plant, animal or dairy products, medications, trademarked and copyrighted material and so on. See http://www.customs.gov/ for more information.

What does the US Customs procedure involve?

Customs is a two-part process: (1) filing the documents necessary to have your products deemed able to be released and (2) filing the documents that contain information for duty assessment. Both of these processes can be completed electronically via the Automated Broker Interface program of the Automated Commercial Systems. When your documentation is presented, customs officials decide whether or not it is necessary to examine the shipment. If your goods are examined, officials will check that no legal or regulatory violations have occurred and then release your goods.

What are Customs officials looking for when they examine my shipment?

• The value of the goods for customs purposes and to check whether duties apply.
• Whether the goods need to be marked with country of origin or require special marking. If this is lacking, they are then marked to meet regulations.
• Whether the shipment contains prohibited articles.
• Whether the goods are correctly invoiced.
• Whether the goods are in excess of the invoiced quantities or a shortage exists.
• Whether the shipment contains illegal narcotics.

Goods are cleared much faster if:

1. Invoices are clear and contain the information that would be shown on a well-prepared packing slip.
2. Each package is marked and numbered so it can easily be identified against the invoice.
3. A detailed description of the merchandise in each package is on the invoice.
4. The country of origin is clearly marked.
5. Any special laws that apply are complied with. Merchandise such as food, drugs, cosmetics, alcohol and so on will usually fall into this category.
6. Your supplier maintains good security, reducing the risk that narcotics smugglers are able to introduce narcotics into your shipment.

Duties, Tariffs and all the rest

All goods imported into the United States are subject to duty or duty-free entry depending on their classification in the Harmonized Tariff Schedule of the United States. The full tariff schedule is quite a hefty document about the size of a dictionary! You can purchase an annotated loose-leaf edition of the tariff schedule from the U.S. Government Printing Office, Washington, DC 20402.

Or you can find an abridged PDF version here.

The easiest way to find out what you may be charged is by searching for tariffs online at http://dataweb.usitc.gov/. You’ll need to create an account before you can search, but it’s totally free to do so.

There are three types of duties that may be charged: ad valorem, specific, or compound rates. An ad valorem rate is a percentage of the value of the merchandise, such as 5% ad valorem. This is the rate most commonly applied. A specific rate is a specified amount per unit of weight or other quantity, such as 5.9 cents per dozen. A compound rate is a combination of both an ad valorem rate and a specific rate, such as 0.7 cents per kilo plus 10% ad valorem. Rates of duty for imported merchandise can also depend on the country of origin. When referring to the Harmonized Tariff Schedule, you’ll notice two different columns: General and Statutory. Most goods are covered by the General column (column 1) if they are from what is known as ‘most favored nations’, that is, countries with a trade agreement with the US. Goods from countries to which these rates have not been extended are dutiable at the full or ‘statutory’ rates (column 2).

So am I likely to have to dig deep?

Generally, importing costs from China to US are very reasonable. While the figures always look frightening in documents such as the HTS, you’ll usually find that the tax is very low unless your item is unusual or restricted in some way. Another tip is to stay away from designer replicas as these are subject to more scrutiny and may cause Trade marking and Copyright issues. If you are particularly worried about getting started, I suggest only importing small lots until you feel more confident with the process. Customs are primarily interested in very large orders and small parcels valued under $1,000 are usually waved on through.

Other Resources

The best source of information is the US customs site:

1. http://www.customs.gov/ – check out the questions area.
2. PDF guide to Importing into the US

In some cases, the company you are purchasing from, or the shipping company (DHL, FedEx etc) will handle all the importation forms for you. For very small imports weighing under 150lbs (68kg; which is the maximum weight these shipping companies can handle), you’ll be able to pick these up from the post office and pay the customs duty there, or you’ll receive notification that your goods are being held at a location pending the payment of import duty, and where and when you can pick them up.

However, it is likely you’ll need to import larger amounts than this – either container loads or half containers.

Customs Restrictions

Before you order your product, don’t forget to check up on restrictions and special licenses required. Some countries have very specific regulations about prohibited or restricted goods.

While many countries prohibit items you might expect (drugs, chemicals etc), some restrictions can take you by surprise. For example, you can’t import shoes to Italy or cultural and heritage goods to Australia!

Don’t forget: If you are planning to sell your item to International buyers, then you also need to check Customs regulations of others countries also.

The easiest way to find information is by going to Customs’ websites for your country and the countries you wish to sell your item too. If you can’t find the information you want or are unclear about the specifications, contact Customs directly by phone or email. This is not something you want to take a chance on!

• USA http://www.customs.gov
• Canada http://www.cbsa-asfc.gc.ca/menu-e.html
• UK http://www.ccra-adrc.gc.ca/customs
• Australia http://www.customs.gov.au
• New Zealand http://www.customs.govt.nz/default.htm

Contract Negotiation

When you have found a supplier for the product you are looking for, the next step is to negotiate a contract. You’ll need to discuss the price per unit, packaging, how many items are to be loaded into each case, and shipping terms.

There are a number of different shipping terms that you can negotiate. Your goal is to get the supplier to take as much of the risk on board as possible.

Terms of Shipping

Ex-Works: You are responsible for all costs once merchandise leaves the supplier’s door.

FOB: Supplier pays for everything up to the Port of departure, including the export charges.

CIF (Cost, Insurance & Freight): Supplier pays to send the goods to the port of destination and arranges the minimum cover marine insurance.

DDU (Delivered Duty Unpaid): The supplier pays for all costs to deliver to the buyer’s door, with the exception of duties.

DDP/CARRIAGE PAID (Delivered Duty Paid): The supplier delivers to the buyer’s door and pays all of the costs including duties.

The most common shipping quote is FOB – or ‘Freight on Board’. This means that freight costs to the point of loading are included in the price.

Warning

‘FOB factory’ has quite a different meaning altogether. “Freight on Board Factory” means that you pay onward costs to the local port or airport and this can increase the price considerably – particularly if the company is situated inland.

A better quote to get is ‘CI&F’ or Cost, Insurance and Freight. This means that in addition to the FOB price, you’ve been quoted insurance and freight costs. This is ideal as it means you can budget much more effectively. Or, if you are very lucky, DDP, where you pay the price of the product delivered to your door.

The site Export 911 has a great information area for people new to import/export at : http://www.export911.com/e911/gateway/gateway.htm.

You’ll find detailed descriptions of each stage of the process and importing terms and requirements. Just remember that this site is aimed at exporters rather than importers (although many terms and processes are the same), and the goal of the site is to get you to use their services, hence processes are in those terms.

Shipment size

The cost of your shipment will depend on the weight or volume you ship. You will either need a Full Container Load or a Lesser Container Load.

For a full container load, the standard container sizes are 20 foot and 40 foot in length and can accommodate whatever mixture of products you choose. The shipping cost includes the use of the container, although you can buy a container if you are making very frequent purchases. If you are purchasing from one supplier, the container is taken to their premises, loaded on site, sealed and collected for onward shipment to your country. For multiple suppliers, you can arrange to have all goods delivered to your freight agent who will load all the goods at their premises. Full Container Loads are the most efficient way to ship as cost savings can be made on packaging and less labor is required. Apart from the obvious advantage of the lower freight cost, the additional Export/Import processing and Handling & Haulage costs are all more economical as processing a full container is calculated as a single transaction.

If you are not importing a full container load, then your shipment will be consolidated along with other company’s goods traveling to the same destination. The rates applied to a Lesser Container Load are calculated by the volume your goods take up in cubic meters. Lesser container loads are not as economical as full container loads because they require more packaging and more labor loading and unloading at both ends.

Invoices and Forms

When you have negotiated a deal with a seller, including the shipping terms, price of goods, and the packaging they’ll be shipped in, the seller will send you a Pro Forma invoice, which you pay according to the arrangements you have negotiated.

A pro forma invoice is basically an advance copy of the final invoice. If you need to apply for a letter of credit (L/C) and/or foreign exchange (import) allocation, you will need your pro forma invoice.

When the goods arrive, they will be accompanied by the Commercial invoice. This invoice enables the goods to be cleared through customs. It is similar to a sales invoice except specific details are included for export-import purposes.

See a sample Commercial Invoice here: http://www.export911.com/e911/export/docCI.htm#docCI

Remember to check that everything you want and have agreed to – and that the supplier has agreed to – is on the invoice. It’s easy to think that you’ve arranged the payment and shipping, and that all your requests have been taken into account. But miscommunication is common so always double check!

Organizing your own Shipping

If you need to find your own shipper, then the best place to start is with a search in Google. Ask for quotes from a number of shipping companies before you decide which one to go with. You can often save between $100 and $500 by doing this.

How does the Canadian Customs system work?

There are two stages to customs: release and accounting. You or your customs broker takes care of the release, while accounting is based on the documentation supplied by you as importer, the exporter, and the carrier.

1. Release: Before the goods arrive, the customs broker prepares the release by gathering all necessary information and documentation from you, the shipper, and the carrier. They then review the paperwork and contact you or the shipper if anything is missing. The customs broker will also obtain any required import permits or certificates required by other government departments. When this is complete, the broker then submits a release electronically to the CBSA. When your shipment arrives in Canada, CBSA will release the goods providing everything is in order.
2. Accounting: Within 5 days of the release of the shipment, the customs broker submits the second stage of the import - accounting. To do this, a customs entry must prepared and submitted to the CBSA with more detailed information about the shipment. The customs entry includes a Form B3 - Canada Custom Coding Form. This form contains information about the goods, such as the your identification, description of the goods, tariff classification, value, country of origin and other trade data, as well as how much duty and tax is owed to the CBSA. In essence, the customs entry is a “tax return” to the CBSA for the shipment.

What do I need to do?

If you are importing to Canada for the first time, we strongly recommend using a customs broker to ensure that everything is accurate and that you build a good profile with customs. Customs can be very complicated for first timers, and someone with in-depth knowledge of the systems is required.

You are responsible for keeping all records related to the import for six years following date of entry.

What documents do I need to provide with my import?

The documentation to be included with an import varies depending on the value of the goods. If the value of your import is valued at $1,600 (CDN) or greater, you need to include:

1. A Bill of Lading
2. Carrier’s Manifest (Cargo Control Document)
3. Canada Customs Invoice or Commercial Invoice
4. Import permits, certificates or licenses (as required)
5. Any other documents that may be needed to present to Customs to satisfy the CBSA requirements or the requirements of other government departments.
6. Certificate of Origin (if applicable)

For Imports valued under $1,600 (CDN) you need all of the above apart from a Canada Customs Invoice.

What is a Customs Invoice?

A customs invoice contains information on:

• Your name and business number
• Exporter name
• Unit of measure and quantity of goods
• Value of the goods and currency
• Detailed description of the goods
• Goods’ country of origin
• Number of invoice pages
• Bar-coded transaction number
• Permits, licenses and certificates required by other government departments

When is a Certificate of Origin required and what is its purpose?

A Certificate of Origin is a documented submitted by the exporter listing the goods to be imported and place of origin. Where countries have agreements (such as NAFTA) for favorable duty treatments for goods originating in specific counties, submission of a certificate of origin can assist in lowering or even completely eliminating duty on goods, thereby helping to increase your competitiveness in the Canadian market.

There are five main types of certificates of origin:

• NAFTA (North American Free Trade Agreement)
• CIFTA (Canada-Israel Free Trade Agreement)
• CCFTA (Canada-Chile Free Trade Agreement)
• CCRFTA (Canada-Costa Rica Free Trade Agreement)
• Form “A” Certificate of Origin from certain developing countries

To find out whether a Certificate of Origin is required, read http://www.cbsa-asfc.gc.ca/E/pub/cm/d11-3-1/d11-3-1-e.html and contact a customs agent.

How much will I have to pay in tariffs and duties?

All merchandise imported for commercial use are subject to customs duty and goods and services tax (GST), unless they are exempt or free of duties. No matter where you purchased the goods and in what currency, the value of the goods must be converted in to Canadian dollars to determine the duties payable. Some goods will also have other charges or taxes apply, including excise duty and excise tax on luxury items like jewelry or alcohol.

The CBSA can assist you in determining the duties you will have to pay on goods before they arrive. Valuing goods can be a complicated task as a number of adjustments to the actual sale price are required, expert assistance is usually required.

In order to establish what duties will have to be paid, you must have a thorough description of the goods and know their value and origin. The CBSA can also give you advice about the appropriate valuation method, tariff classification, and tariff treatment. If you wish to know in advance exactly what you will have to pay, you can request an Advance Ruling or a National Customs Ruling on tariff classification, origin, marking or valuation.

Then contact the CBSA through the BIS line (see below) and speak to an agent in person. The agent will refer you to a staff member who specializes in these matters.

Contacts:

Email CBSA: CBSA-ASFC@canada.gc.ca

Phone Border Information Security (BIS) to get computerized information and speak to an agent: Ph. 1 800 461-9999

Online Resources:

• Canadian Foreign Affairs and International Trade has a general article on importing with contact details for people who can offer specific advice.
• Livingston International have an excellent PDF guide on How To Import Into Canada – Guide For Canadian Importers
• Canada Border Services has a good FAQ and provides documents you need to import to Canada

You don’t need a license to import to Australia in general, however some products may require special licenses. Click here for information on prohibited or restricted goods.

Goods Classification

The first thing you need to do is classify your goods correctly so that the appropriate duties and tariffs (if any) apply.

Not sure how to classify your goods?

Customs provides a tariff advice service for importers who are unsure as to the correct classification or concession for their merchandise. To take advantage of this service lodge an application with Customs along with supporting evidence. You can apply for a tarif concession on imported goods that do no compete in the market place with goods of Australian manufacture.

You are ultimately responsible for classifying goods correctly as well as all other Customs documentation – even if they were prepared by a Broker, Freight Forwarder or Service Provider. It is recommended that you check over all documents before they are given to customs and retain copies. Talk to your Broker of Freight Forwarder if there are any errors. You also need to account for any surplus goods, promotional materials and samples.

All customs documentation must be retained for 5 years.

Click here for more information on your responsibilities and where you can find help.

What happens at customs?

Customs may decide to inspect your goods or they may waive the inspection. You do not need to submit commercial documentation, but you do need to to keep all the relevant commercial documents for 5 years after that time. If you have an Australian Business Number(ABN) you will need to supply it to Customs when formally entering goods . Importers need to be registered for GST purposes and have an ABN in order to claim input tax credits or access the GST deferral scheme.

Duties and Tariffs – How much will they cost?

Duties and Tariffs are based on the classification code of the goods, valuation and country of origin. Valuation of imported goods can be complex and importers are urged to seek advice from a customs broker or to contact a Customs Information Centre

Tariff information

Where do I go for help?

Contact the Customs Information and Support Centre on 1300 363 263 or send an email to information@customs.gov.au

• Customs Australia
• Business Australia
• General Guide to Importing to Australia

Importing to New Zealand

What am I responsible for?

You are responsible for:

• Making an accurate and correct entry
• Paying all Customs charges
• Keeping all commercial documents for 7 years and providing to Customs if necessary
• Compliance with legislative requirements

Classification of Goods

The correct classification of goods is the most complex part of importing, and for this reason, many people choose to use Customs brokers to worry about it for them! The classification code which best fits your merchandise will determine the tariffs and duties you have to pay. You are ultimately responsible for choosing the correct classification code. Whether you complete this process yourself, or receive help from a broker or Customs, you will need to provide the following information:

• Purchase invoice
• Manufacturer’s costings
• Freight and insurance costs
• Product sample
• Catalogues or brochures
• Evidence of origin
• Proof of payment

For some items you will also need:

• An airway bill or bill of lading
• Invoices.
• Packing lists
• Insurance certificates.

Importers may also need to contact shipping companies, airlines or freight forwarders for advice on their requirements, operating hours and/or location of the goods.

Who can help me Classify goods?

For first time importers, Customs run training programs which you can attend. Email mailto:cbaff@clear.net.nz to find out more.

For successive imports, you will be expected to complete the entry yourself or use a Customs broker or agent, or freight forwarder. All import entries must be completed electronically using the appropriate software or CusWeb. Remember that you are responsible for the accuracy of the customs documents - even when they are completed by a broker or agent - so it’s important to check all details.

Where do I find a Customs broker?

Customs brokers and freight forwarders are listed in New Zealand business directories under those headings. A list of those affiliated to CBAFF is also available at www.cbaff.org.nz

How much will I have to pay in Tariffs and Duties?

Tariffs and duties are determined by the classification of your goods, the country of origin, and preference toward some countries as per trade agreements. Where duty is expressed as a percentage rate, it is calculated on the Customs value of the goods.

For more information on Tariffs and Duties.

GST

GST (Goods and Services tax) of 12.5% applies to almost everything imported to New Zealand. GST is payable on the sum of following amounts:

• the Customs value of the goods
• any import duty, anti-dumping and countervailing duties, ALAC or HERA levies payable (see above)
• the freight and insurance costs of transporting the goods to New Zealand.

Import Entry Transaction Fee

An Import Entry Transaction Fee of $25.38 (GST inclusive) is payable on every commercial import entry and import declaration for goods with a duty and GST liability of $50 or more.

How do I pay fees?

There are three payment options:

• Cash
• Deferred payment — only available to importers who are holders of a deferred account
• Broker deferred — available on the request of an agent who holds a broker deferred account. It is not available to an importer who holds a deferred account.

For more information see:

• NZ Customs
• NZ Government
• Ministry of Economic Development