By: thomas ige.
The following article aims to assist would-be businessmen and beginners who intend to promote and sell their products or procure their stock in trade, capital assets, to or from the international market, respectively.
IMPORTATION:
1. Register your business and ensure that all licenses and other legal requirements have been complied with.
2. Obtain a list of suppliers dealing in the products you wish to import and select the most dependable. Do a comprehensive research on the industry. This can be done with the assistance of your bankers through their correspondents overseas.
3. Obtain a pro-forma invoice or firm offer from your selected supplier. Make sure that their quotation includes, among others, the terms of shipment such as FOB, C&F, or CIF. Payment for imports can be done in the following manner:
a.) By Letter of Credit (L/C) - Once you have agreed with your supplier on the pricing and other terms and conditions of your purchase, open a letter of credit with your bank. Depending on the agreement with your supplier, the L/C can either be sight or usance, revocable or irrevocable, confirmed or unconfirmed. Under a sight L/C, payments for the goods are made upon presentation of the documents from the supplier through your bankers (which is commonly the L/C opening bank) regardless whether or not you have received the goods imported. Under usance L/C, payment is made at a later day, after 30, 60, 90 or 120 days. A revocable L/C is one which you can revoke even without the consent of your supplier. A confirmed L/C is one by which the L/C advising bank, by virtue of their confirmation of the L/C, is liable to pay your supplier the value of the imported goods should the L/C opening bank be unable to pay your supplier for some reason.
b.) By Open Account (O/A) - Payment is made at a later date depending on your agreement with the supplier.
c.) By Documents against Payment (D/P) - Under this mode of payment, you have to effect the payment of the imported goods upon presentation of the import documents by the bank.
d.) By Documents Against Acceptance (D/A) - Under this mode, the documents are forwarded to you through an appointed bank in your locality and upon your acceptance, (i.e. signing the relative document signifying your acceptance of the liability) the bank then surrenders the documents to you, and payment will be made later, after 15, 30, 45 or 60 days depending on your agreement with the supplier.
e.) By Prepayment - Advance payment must be made before supplier ships the goods
Note that the basic import documents consist mainly, but are not limited to, original Bills of Lading (B/L) or Airway Bill; original Commercial Invoice; original Packing List; or any such other original documents which you may require. These documents are necessary so the importer can secure the release of the imported goods from the shipping/airline companies and customs authorities.
EXPORTATION:
1. Register your business ensuring that all requirements have been complied with.
2. Choose the products that you are going to export and ascertain from the difference governmental agencies that these are not banned items. Where necessary, obtain a list of all the documents that are required especially for regulated products. If you produce or manufacture your own products for export, know your production capacity. If you subcontract the production of your goods, know the production capacity of all your subcontractors.
3. Open an account with a bank with international connections or one with correspondents in the locality of your customers.
4. Where necessary, obtain a background check of all your would-be customers through the aid of your bankers.
5. From new buyers, always insist on prepayment before you ship your goods.
6. If you agree on payment by Letter of Credit (L/C), ensure that the L/C is irrevocable and at sight.
7. Try to understand the different modes of payment for international trade, as discussed above, under Importation.
This is a simple step-by-step guide on import and export procedures. While requirements may vary from country to country, the general and basic procedures are essentially the same.
SOURCING GUIDE FOR DEVELOPING EXPORT PRODUCTS
A key success factor in any export business is clear understanding and detail knowledge of products to be exported. Before starting marketing effort and contacting prospective buyers, one must be ready with a detail sourcing guide that documents all necessary information about your product basket. We shall identify key elements of a sourcing plan and how to document them in this article.
Whether you are exporting first time or been in export trade for a long time - it pays to be methodical and systematic in your approach. Its not enough to have all necessary data 'in your head' - but equally important is to put everything on paper in a structured manner. Once you have done that - it becomes easier to find the gaps in your knowledgebase and take necessary corrective actions.
Preparing Product Portfolio
Once you have zeroed in to a set of products - next step is to prepare a profile or dossier for each selected product. The dossier should contain all information about the product - its sourcing, packaging, pricing, selling etc. Together, these dossiers will comprise your product portfolio.
I have prepared a sample checklist for preparing product dossier. Please add and subtract to arrive at your own.
- Product Name
- Availability : Where available at competitive price
- Description : Short and snappy
- Image/photographs - Specially for handicraft/beauty products
- Specifications - size, volume, weight, materials
- Quality standards
- Packaging - unit pack, carton pack, packaging materials
- Market Price
- Suppliers - names and addresses of most suppliers
- Competitors
- Target Countries - Some Market research required
- Various overhead costs like packaging, labeling, transportation, logistics, port charge etc.
- Your profit margin
- Selling price (FOB and CIF)
- Minimum Order quantity
- Discount scheme for volume buyers
- Agency/distribution commission
It is strongly advised that you complete above homework before starting your marketing effort. Even if you are an experienced hand and know all these well - there is no harm in putting this knowledge on a piece of paper. You can improve a lot by introspecting and re-writing your thoughts. Remember, God is in detail - success of your plan depends a great deal on how much care you take on small details.
Do not be a Jumping Joe
I have seen many new entrants who either completely overlooked these preparations or planned to do so after securing first order and jumped headlong into marketing only to suffer later. What they do not understand is that even for negotiation - you need detail product knowledge. If your buyer asks for a smaller volume what will be your price ? Your negotiation is bound to fail if your buyer does not get precise and fast response and gets dissatisfied with your answer.
Be Nearest to your Supplier
Success depends a great deal on what price you can offer to your buyer. As your selling price depends on sourcing price, try to avoid unnecessary middlemen who only add cost but no value. By avoiding middlemen and sourcing directly from supplier - you not only cut transaction cost but also get greater control over product quality and timely shipment. THE DHL INVOLVEMENT
DHL Express - simplified - a courier service (by air) by DHL, a Deutsche Post company located in Germany.Function: same as UPS and Fedex.Charges are based on weight of your item.Item will be delivered as fast as within 24 hours.
They also had service called DHL Global Forwarding for larger shipping item(import-export) either by sea/air.
DHL Express's global headquarters are located at the site of Deutsche Post headquarters in Bonn. Headquarters for the Americas are located in Plantation, Florida, while its Asia-Pacific and EEMEA headquarters are located respectively in Singapore&Bahrain The European HUB is now located in Leipzig. Most of DHL Express's business is incorporated as DHL International GmbH. Major competitors include FedEx, UPS, TNT, and national post carriers such as United States Postal Service and Royal Mail. However, DHL has a minor partnership with the USPS, which allows DHL to deliver small packages to the recipient through the USPS network. It also is the sole provider for transferring USPS mail in and out of Iraq and Afghanistan, All material is xrayed at DHL locations throughout these regions. DHL's new service "DHL@Home", saves DHL from making expensive trips to residential areas to deliver a single package. DHL is well known for its ability to offer services worldwide, including to countries such as [[Iraq], Afghanistan and Myanmar. As it is German-owned, DHL is not affected by U.S. embargoes or sanctions and will ship to Cuba[3] and North Korea. Starting in 2006, Deutsche Post World Net launched its First Choice initiative, which is being rolled out to all DPWN business organizations. The First Choice initiative has the goal of improving the way DHL and its parent company DPWN communicates with its customers, as well as strengthen customer loyalty and increase the efficiency and quality of all products and services offered. As a foreign company, DHL is not allowed to make domestic flights between U.S. airports, so these freight flights are contracted out. DHL may require some international recipients to pay any customs charges into proof of payment provided, before package delivery can be completed. Such cases may involve a physical journey to the DHL bank and/or the local DHL office, although the recipient can opt to pay for the charges of the delivery at their premises. In Major League Baseball sponsorship, it is the "Official logistics provider of Major League Baseball" and sponsors the Hometown Heroes.
