Imports & Exports
“In this 21st century world, some of our country’s most significant exports and imports extend beyond goods and services: They also include innovation, knowledge, discovery, and healing.” – Kathleen Sebelius
If you are looking to grow a business then the World is your oyster – literally. The general concept of importing means there is no limit to the products or services you can access and exporting opens up a genuinely global audience.
Clearly in the current, turbulent times of Brexit, we lack the stability and clarity of where things are heading … but this is often the perfect time to take advantage and prosper. The following article is a start on the journey towards understanding imports and exports but clearly this is a complicated area and you should seek advice and support. We strongly recommend you talk to our friends at the Department for International Trade to discuss your thoughts.
Well simply put, it is not like buying goods from the next village! Certain things will always apply whether you are attempting to get hold of a unique product or buy cheap from the Far East.
- You will have to buy in greater quantity and hold more stock, best be sure you want them and can sell them in a reasonable time.
- Lead time for replenishment will be longer, you will have to be better at forecasting demand or you will run out.
- You have to quality check at the manufacturers, once the goods are with you it is very tricky to return them.
- You’ll likely not get credit and have to pay in advance, important then to ensure the supplier is trustworthy and your cash flow plan reflects this negative flow of cash.
- When attempting to compare prices, don’t forget the add on costs of transport and duty.
- Currency will fluctuate, you can guard against this but it costs money and is complicated.
- Using a middle-man or agent may seem expensive, but in the first instance their experience may be invaluable.
- Paperwork is complicated, employ the services of an expert who knows the subject and can talk ‘Letter of Credit’ or ‘Bills of Lading’.
Download our business plan and marketing plan templates for free:
The saying “the grass is always greener on the other side” is very real when it comes to importing as is “if it looks too good to be true, it probably is”. Do extensive research, take advice and take care.
Importing advice from Yorkshire Powerhouse
The key to great exporting is to first ask yourself; why would someone far away with a different culture and language want to buy my product or service in preference to one from their near neighbour?
If you can’t think of a good reason then don’t bother, you’ll end up resorting to selling at a lower price and suffering a much higher cost to serve.
Once you understand the real potential, you will be able to narrow down the likely markets, and then the best route to market.
In considering exports there is always a tendency to look for local partners. Because travelling is hard work and people don’t like wasted trips, they tend to fall for the first potential partner they meet. The rule here is to research well before and after the trips to your potential market.
Again there are common hurdles to all exporting;
- Payment is king, understand how, when and in what currency you require paying in. Post transaction remedy for bad debts is incredibly difficult across borders and international jurisdictions.
- Do the paperwork right, first time. Goods stuck in a port with a customs query are not worth much to you or your customer.
- Ensure your product complies with local standards and regulations.
- Understand tax, VAT and reporting. Exports brings a whole new dimension.
To ensure you get it right employ someone who knows how to export, or partner with someone or seek advice from an expert.
All Chambers of Commerce provide export documentation services and there are also specialist export consultants who have the knowledge to support you.
When seeking advice know your target market. An advisor who has traded with Russia is not qualified to help you sell to the USA. We’d always recommend seeking expert help to prevent errors occurring.