How to Start An Import Business
Starting an import business is not difficult. The US has specific, but simple and consistent import requirements which make it easy for companies to source products from overseas producers. The key to starting an import business is to identify quality suppliers, partner with expert freight forwarders, and take ownership of the learning curve.
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Instructions
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Determine what products you wish to import.
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Identify suppliers either by attending an industry trade show or by contacting the US Embassy's Commercial Section overseas and requesting a vendor list. Many companies also maintain websites or list products in online databases.
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Contact suppliers and request catalogs and pricing.
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Learn as much as you can about your suppliers and their products. If possible, arrange to meet with suppliers and tour their offices.
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Select a freight forwarder and, with their help, determine what the import requirements are for the products you will be importing.
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Prepare a purchase order and send it to suppliers requesting a Proforma Invoice in return.
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Review the Proforma Invoice, which should state the products ordered, quantity, pricing, incoterms, product harmonization codes, piece count and weight and dimensions of the freight
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Decide if you will import goods via air or ocean freight. Air is more expensive and takes one to two weeks for delivery. Ocean is cheaper and takes a month to a month and a half for delivery.
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Request a freight and estimated duties quote from your freight forwarder. They will need the information on the Proforma Invoice to do so.
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Confirm your purchase order with the supplier and make payment arrangements if payment is required prior to shipment of goods.
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Follow up with your supplier on a regular basis to track the process of your order.
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Upon shipment, request copies of all the supplier's paperwork. Review them carefully with your forwarder for accuracy and to ensure they will meet US Customs documentation requirements.
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Follow up with your forwarder to ensure goods are cleared through US Customs.
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Inspect goods upon receipt and notify supplier of any in transit damage. Depending on the shipment's incoterms they may be required to credit any losses to your account. For clarification on your shipment's incoterms and who is responsible for what, consult your forwarder.
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Conduct a proactive process review and let your supplier and forwarder know where their service was good and where it needs improvement.
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Tips & Warnings
Don't compare vendors on unit price alone, but also transportation costs especially if you are looking at different source countries.
Take advantage of free trade agreements such as NAFTA whenever possible because they reduce import duty costs.
Just-in-time inventory management methods do not work very well with international supply chains. Keep a little more inventory on hand than business models typically suggest to carry you through unexpected production or transportation delays.
Something always goes wrong, especially for inexperienced importers, create back-up plans and pad your time line to allow for the unexpected.
On occasion, certain products or materials may need an import license. Be sure to review products and their components with your forwarder prior to your first importation to avoid delays.
Be sure to determine if products are hazardous as there are additional requirements and heavy fines for improperly shipped hazardous materials. Importers are legally liable for proper packaging, marking, labeling, and shipping of hazardous materials
Resources
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