Importing goods from other countries is much more complicated than just picking up the phone, placing an order and waiting for it to be delivered!
There are many things to consider before you place your first order.
You may think that importing goods from another country is a great idea! Is it really so?! Stay with us till the end of this article to find out the answer. We have compiled 10 tips to help you make a better decision. Tips that will help you import goods with a better vision.
1- Is there a local market for the goods you want to import?
Import for sale
Before attempting to import goods from Chine or anywhere else you should make sure that there is sufficient demand in the market of your city or country. Identify your customers and conduct surveys to make sure whether importing goods will be profitable for you or not. If there is limited demand you may end up with a lot of inventory that you cannot sell and lose money on the deal.
Import for use in production
If you are going to manufacture a new product, you need to check that there is enough demand for the final product so that you can warrant importing dome of the inventory you need. If you are considering importing your desired material from another country rather than using local suppliers for items that are already being manufactured, it is thinkable to check that the current level of demand is likely to remain the same or increase. If demand falls, you may have to put a lot of your working capital into storage. You should also conduct a detailed market research to determine what products your competitors are selling the most. It is a good idea to have a list of products names and specifications and retail prices in the level of your city and country to make sure your import has a competitive edge.
2- Are you legally able to import the desired product to Iran?
Before you spend time, money and effort on further research you must make sure if you are authorized to import the desired goods into Iran. Legally there are many goods that you are not allowed o import into Iran. These may include goods or products that are produced inside the country or the ones which are generally prohibited from importing to Iran.
3- Cost of importing goods
Before you place your order contact a reputable trading company to get informed on all the steps and fees you have to pay. These costs can include the items below:
- Shipping and insurance costs (depending on your negotiated commercial terms)
- Duties and customs
- Financial costs
- Costs of services such as custom brokers or shipping
You must exactly know the customs tariff for the goods you intend to import so that you can manage your costs better. There are different costs on your path of importing goods that you have to pay. And you must get informed on them before you start the process. It is worth mentioning that the method of transporting your goods can affect its costs. For instance, seaway transport from China to Iran is more reasonable than airway method.
4- Is it really cost effective to import?
Once you have an idea of the final cost of an item you would like to import, then you can see whether it is a cost-effective option for your business or not.
Sometimes there are some extra costs that can increase your final price in a way that there will be no profit for you to import. You need to work out the costs to see if the final product has a reasonable return on the investment or not.
Hiring an accountant, trade counselor or a reliable customs broker to do the calculations is a suitable solution fro you. This way you can realize whether your business is profitable or not. You can also check which country is more economical to import from. For example, sometimes importing from Dubai is more economical than from China.
5- Can you afford to import?
It is important to make sure that you can afford the import costs. There are two reasons why importing needs liquidity. The first is that, given the high shipping costs, it is more cost-effective to ship large orders rather than small ones, so imported orders are often large and therefore they are expensive. The second reason is that imports increase working capital. The person you are buying from may either ask for payment in advanced or ask you for a letter of credit or bank guarantee. This means that it is not possible for you access your money or use it to start your business in the while between placing your order and paying for it. You need to do necessary predictions to make sure that, in addition to the capital you spend on importing goods you have enough financial resources to run your business. Talk to your accountant or financial counselor to ensure that you won’t face any financial problems till your goods are delivered and sold.
6- Disadvantages and risks of import
There are more risks associated with importing than buying domestically, and in order to manage them effectively you need to be aware of them. These risks include the following items:
- The distance between you and the supplier is long. This means that it can be difficult to handle some things such as quality control.
- The delivery distance and time is longer so it will be more difficult to return products.
- Due the long process and delivery time you may be in a situation where you have to accept lower quality goods from the supplier.
The seller may not be able to meet your quality requirements within the specified time. In this case you don’t have the opportunity to replace them with another seller so you are forced to accept their low quality products.
You should be careful to find reputable suppliers. When placing your order, you must enter into a contract with conditions which will pay you damages in case of non-delivery at the specified time with the requested quality. The contract should include penalties for late delivery or for goods that are not up to standard. You should also keep an eye on alternative sellers so that you can contact them quickly if necessary.
7- Dealing with exchange rate fluctuations
Exchange rate fluctuation is another risk you may face as an importer. As the import of goods are done in international currency, its fluctuations can affect you final costs. This rate change can sometimes be in your favor or against you. You can contact us to get some advice in this field and to provide reliable solutions for such problems in order to avoid the risk of exchange rate fluctuations during your trade.
8- Choosing reliable supplier of goods abroad
The cheapest supplier is not necessarily the best supplier for import. Finding a reliable supplier is vitally important. You need to find a seller, who:
- Doesn’t disappear overnight with your money
- Delivers your order on time
- Delivers the products you specified and at your expected quality level
- Informs you in case of any problems or delays
Some tips to get to know your supplier better:
- You can ask the seller for a list of previous buyers. You can contact them and ask about the seller’s quality and credibility
- You can visit the seller’s physical location such as their factory or workshop, by spending more money.
- Ask for a product sample before you order.
9- Making a deal with overseas suppliers
Dealing with suppliers in a foreign country is often difficult. You may be dealing with people who don’t speak your language and whose culture and views are different from yours. In such situation the risk of misunderstanding and miscommunication is higher than when dealing with domestic and local suppliers.
Learn all you need to know about the country you are importing from. Local industry groups or chambers of commerce can give you some tips. But the best way to get all the needed tips is talk to people who are doing business, import and export, with that very country. IRdelivery can guide in this field.
Cultural similarity can make the business process easier. For example importing from Turkey may be easier for Iranians compared to importing goods from China.
10- Trade terms and customs requirements
Terms of the transaction
Before signing an import order contract you should know the trade terms used by the importers and exporters. You need to make sure that both parties have the same understanding of the terms. Terms such as EX (ex-factory, warehouse or farm), FAS (free alongside ship) and FOB (free on board) are some examples. Before you sign the contract make sure that you will talk to a consultant in this field to know all the terms needed. You can also use IRdelivery free consultation in this field.
There are a number of customs requirements that you should know if you are planning to start importing goods. The best way to avoid almost any problems in registering your custom declaration is get help from a shipping company or a customs broker. Keep in mind that importing goods may sometimes cause some challenges. We are always ready to provide our dear compatriots with free advice in the field of importing goods, international transport, warehousing, and clearance and customs matters.