Importing can be an excellent way to grow your business; opening new domestic markets, offering new products or services, or reducing manufacturing costs.
Depending on the type of goods and regardless of their value, you may be required to obtain a licence or permit to clear some goods through Customs. You will also need to ensure that the goods comply with safety and information standards.
There is no central body in Australia to assist with importing, however the Australian Border Force provides practical information on importing and buying goods from overseas.
TIP: The International Chamber of Commerce has developed a set of terms (Incoterms) to make it easier to negotiate trade between countries; they are important when you are receiving quotes from overseas suppliers for goods to be delivered by pallet or container load.
There are numerous reasons for importing goods. Perhaps you need to import a piece of capital machinery to be used in your company’s operations, or perhaps the imported goods are components or inputs to be used in a manufacturing process.
The most common reason is to import for resale (and this is the side of importing we will concentrate on). Whatever the reason, it is important that you accurately determine the landed cost, i.e., the cost of the goods delivered to your warehouse, before you place an order.
Basic steps for importing goods
1 – Identify potential suppliers and obtain samples and prices
2 – Identify whether the products can be imported and if there are any restrictions or quarantine requirement, Labelling and marking on packages and products are also subject to Australian regulations.
3 – Logistics
If you’re importing small quantities the supplier may be able to arrange courier or postal delivery. If you’re importing pallet or container loads, research Incoterms to understand the division of tasks, costs and risks between the overseas seller and you (the buyer).
Customs Brokers can also assist with import duty rates, tariff concessions, quarantine requirements and an estimate of unloading costs. The Custom Brokers and Forwarders Council of Australia has a directory of customs brokers.
4 – Contact the international division of your bank, you may need to discuss finance, payment options and associated costs.
5 – Understand ‘landed cost’
This includes all costs such as freight forwarding and insurance, or ask your customs broker to do this for you.
6 – Determine the selling price
You will need to ensure there is adequate margin to cover your costs and be profitable.
7 – Place an order with the supplier
Once you have checked your plan is commercially viable, it’s time to place an order with your supplier. Ensure your order is confirmed in writing and that the terms and conditions of sale are clear to both parties.
8 – Take delivery of the goods
Examine the consignment immediately for insurance purposes. Give a ‘clean receipt’ only once you are satisfied that there is no damage or shortage.