If you’re in the business of regularly importing items from overseas, there’s a lot to consider. You may, for example, face problems when it comes to supply chains – and struggle to get the goods to your depot or warehouse in a cost-effective way. You may also have a foreign exchange rate problem – especially if the market doesn’t go in your favor. And there are also customs to think about as well. This blog post will explore these issues in more detail.
Supply Chain
One of the keys to success when importing goods from abroad lies in getting the supply chain decisions correct at the start. Ensuring that the place you’re buying from is a legitimate provider with a stable business model always pays off, even if it means the costs are slightly higher to begin with. Doing this sort of due diligence reduces the risk of you choosing a supplier who eventually goes out of business! And it’s also worth thinking about the cost implications of importing.
Services which offer tax free shopping from the USA and send the goods to you can be useful, as they can reduce your outgoings significantly and mean your margins are higher. Depending on where you are, you could also sign up to list your own goods for sale via such sites. That way, your customer base can quickly expand as people seek to take advantage of the tax break on offer.
Forex Management
If you’re importing from abroad, it’s almost certain that you will need to think about foreign exchange rates given that you’ll be settling invoices with a supplier that is based overseas – and, hence, using a different currency. If the exchange rate goes in your favor, your bill will probably end up being less than otherwise – but if it doesn’t, you could end up paying more for your imported goods that you’d expected.
One way to reduce the risk posed by ever-changing exchange rates is to use a risk management tool. You could, for example, buy what is known as an “option.” This tool allows you to lock in a current, favorable interest rate to use at a later date – although you may lose out in the future if the rate drops in a way that you didn’t expect.
Customs Rules
Finally, it’s always worth keeping an eye on the latest customs rules. While most importers are aware of the relevant customs rules for their area of business, there can be changes – and it always pays off to find this out. One useful resource is the list of “Prohibited and Restricted Items” on the website of the US Customs and Border Protection service. And don’t forget to keep an eye on the rules in the jurisdiction exporting to you, too, in case any legal changes on that end cause your supply chain to become unexpectedly disrupted.
Providing goods from abroad to customers in your own domestic markets is an age-old business – and one that, when done correctly, really can reap rewards. And by thinking strategically to overcome challenges like supply chain hiccups, foreign exchange rates and customs laws, you can ensure that you don’t run in to problems while serving your customers.
