Importing products - Business Basics - Catapult - ABC Online

Page 1 of 3

8his website is archived. :ther than the news" Catapult is no longer updated.

Business Basics

As an >(pert

Industry ?ocus

Pro$iles

*ews

Interact

Catapult > Basics > Importing products

Importing products
The idea Starting a business Running your business The exit plan

Seen something overseas you just know will make a killing in the Australian market? Jacquie van Santen explains the basics o importing!

; <eeping it cool ; =etting hot down under

Importing products to sell in Australia can be an attractive business proposition. Provided you can source your product at a good price; get it over here without brea ing the ban ; pass muster with customs and !uarantine; and have a ready and willing mar et in Australia" you may well have a booming business on your hands. But there are many #i$s# and #buts# that can spoil the dream along the way. %ost people import goods into Australia because the product is distinct $rom anything available locally" or because the product can be sourced at a cheaper price. &owever" it#s wise to weigh the pros and cons o$ importing products" because transporting costs" government duties" insurances and other hidden costs can blow your sums out o$ the water and leave your importing dream in tatters. Be$ore you even consider importing a product" it#s wise to try and $ind a supplier in Australia who may be able to provide the same or similar product at a comparable price. 'tart your search by loo ing in trade directories" manu$acturers# inde(es or industry )ournals. Alternatively" contact the Industry Capability *etwor in your state or territory" who can provide you with the names o$ local companies who may $it the bill. But i$ your leads come to a dead+end" and importing is the way you want to head" it#s time to get down to business.

; 'tarting out in social enterprise ; %a ing it o$$icial ; =etting good help

; 'ilver lining to the downturn ; =reener motoring

"uirky acts
Australia imports more goods than it e(ports. As a result" Australia has a ,-.. million trade de$icit according to the latest $igures $rom the Australian Bureau o$ 'tatistics /AB'0. According to the AB'" Australia imported ,12"344 billion worth o$ goods between April + 5une .446 /while it e(ported goods worth ,1-"234 billion 7 an improvement o$ one per cent in previous trade de$icit $igures0. Big+tic et items include non+industrial transport e!uipment" te(tiles" clothing and $ootwear and consumer goods. Source: International Trade in Goods and Services, Australia, ABS Jun 2006

#o you have a market?

8he $irst thing you need to do is establish i$ there#s a viable mar et $or your product in Australia. 9o your homewor and determine i$ there#s a need or demand $or the product" what people would be prepared to pay" how o$ten or how much they will buy and who your competitors are. or more in!ormation a"out researching #our market check out our Business Basic: Is #our idea a goer$

I$ all is loo ing good" establish a wor able mar eting plan o$ action $or selling the product in Australia. Are you going to mar et and sell the product yoursel$? :r will you sell it through a third party or marketing in!ormation see our Business Basics: %oise &orks.

Will people buy your product? Image: iStockphoto

http://

!a"c!net!au/catapult/"asics/s1#2$130!htm

22/10/2012

Importing products - Business Basics - Catapult - ABC Online

Page 2 of 3

Importing checklist
Before importing products from o erseas! ask yourself: " Is the product that you ha e in mind already a ailable in #ustralia? $If it isn't! why not? Is there not enough demand for it?% " #re there any prohibitions or restrictions on the product? " Is the product safe? " #re there any #ustralian standards applicable to the product? " Is the product sub&ect to customs duties or '()? " What costs will you incur to import the product? " #re there any #ustralian*made products that will satisfy your re+uirements or your customer needs? " Will you ha e e,clusi e rights to import the product? If not! who else imports the product? Source: State 'evelopment, (ueensland Government

Can you afford to do it?

-ou now need to establish the arious costs in ol ed in bringing your product to the #ustralian market. )hese include the e,porter's selling price! the price to get the product to the airport or shipping port! port charges at the point of loading! freight costs from loading to arri al! port discharge prices! insurance costs that protect you against loss or damage! clearing charges! customs duty! '() ... phew. It's wise to consider both air and sea freight for importing. (ea freight charges tend to be less on a weight basis! but generally ha e a higher minimum charge than airfreight rates.
Which is the best option: sea or air freight? Image: iStockphoto

(peak to go ernment departments of trade and industry! freight companies! airlines! shipping companies! customs brokers and industry associations for information about the costs associated with importing your product. .or information on customs duties and import regulations contact the #ustralian /ustoms (er ice. )he #ustralian /ustoms (er ice also administers a number of ta, concession schemes that allow the importation of goods for free! at a concessional rate or ia deferred payment. -ou may also be able to get customs and '() e,emptions on imported goods that you intend to re*e,port or are components of products you intend to assemble in #ustralia then e,port. .or more information check out the 'o ernment's )rade, scheme.

Find your supplier

0nce you' e established there's a market for your product and that it's economically iable to import! it's time to find a supplier. (tart by considering a handful of countries that may be able to supply the product! and then narrow your search down to indi idual suppliers. /heck out trade &ournals! buying guides and country yearbooks to find suitable candidates. (peak to organisations such as foreign embassies! chambers of commerce! and industry associations for information and ad ice on importing and access to international trade libraries.

Research who's the best supplier of products like these Indian dyes. Image: iStockphoto

.or specific economic and cultural ad ice contact #ustrade! foreign embassies! o erseas business associations and consulate offices. )he 'o ernment's Business 1ntry 2oint website also has information on importing.

Cutting through the red tape

-our product must pass muster with go ernment regulations. -our goods will need to be cleared by the #ustralian /ustoms (er ice 3 which regulates all imports into #ustralia! and duty and ta,es may apply. Keep in mind you may be eligible for concessions $see abo e%. -ou also need to determine if your goods fall under +uarantine regulations. .or e,ample! if you import plant! animal! mineral or human products! the #ustralian 4uarantine 5 Inspection (er ice

Keep in mind there are strict

http://

!a"c!net!au/catapult/"asics/s1#2$130!htm

22/10/2012

Importing products - Business Basics - Catapult - ABC Online

Page 3 of 3

#A$%&' (ill need inspect your product and possibly treat it (ith a fumigant or other treatment. )or more information* go to the Australian Customs &er!ice and A$%& (ebsites.

quarantine rules for some products. Image: iStockphoto

Alternati!ely* you can seek the ad!ice of a customs broker* (hose role is to (ork on behalf of clients + for a fee + to ensure quick and trouble,free clearance of goods through Customs and A$%&.

Nutting out a price

-he ne.t step is nutting out a price (ith your supplier. Be specific in your quotation request/ include e.actly (hat your requirements are concerning price* quantity* trading terms* payment terms* packaging and deli!ery. &peak to your accountant or business banking manager about the best (ay you should pay for your goods + either by cash in ad!ance* letter of credit #the deal you0!e made bet(een yourself* your bank and the e.porter'* or open account #(here you pay by bank draft or bank transfer'. A final (ord of caution/ (hen negotiating terms (ith your supplier* keep in mind that the quote you recei!e constitutes a formal offer. %f you accept that quote* either !erbally or in (riting* you create a legally binding contract. &o ensure you0re happy (ith the terms of your agreement before you sign on the dotted line. ()I*+ TI,: Ask !or import -uotes and invoices in Australian dollars. This helps #ou avoid adverse !luctuations in currenc# e/change rates.
Be specific about things like your payment options. Image: iStockphoto

From the horse's mouth...

Getting paid 0Be !igilant0 is the message from 1ick )erris* Commerce $ueensland0s manager of international business. 23hen you0re sourcing product from o!erseas* it0s the same as sourcing product locally. Be !igilant as far as payment is concerned*2 says )erris. 2)rom time to time (e hear stories of people (ho ha!e bought product from o!erseas* ha!e paid in ad!ance* are dealing (ith people they ha!e ne!er had any dealings (ith before* and their product 4ust doesn0t turn up. &i. months later they0re still (aiting. -hey0!e done their dough.2 25y ad!ice (ould be to really think the different steps through and try to minimise risk in e!erything you do.2 )erris recommends importers + particularly first,time importers + get as much ad!ice as they can before they get started. 2-alk to banks* talk to freight companies* talk to chambers of commerce and other similar bodies. 6et as much ad!ice as possible.2

Top image: iStockphoto

By 7acquie !an &anten #0890:92008'

About

2011 ABC |

ri!acy olicy | Conditions of "se

http://

!a"c!net!au/catapult/"asics/s1#2$130!htm

22/10/2012