How to Import into the USA


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How to import into the USA

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How to Import into the USA

  1. 1. About Me<br />About CITD<br />About You<br />How to Import into the USA<br />
  2. 2. Basic Business Practices<br />Have fun<br />Apply common sense<br />Define what you want to be<br />Is importing a different business?<br />Can I sell imported products at a profit?<br />Keep records. Count everything<br />Expect to keep different hours. Be Flexible <br />
  3. 3. IMPORTING IS DIFFERENT <br />Logistics<br />Change<br />Effort<br />Time<br />Travel<br />Money<br />Payments<br />Commitment<br />Culture<br />Buyer Needs<br />Channels of Distribution<br />Regulations<br />Time Zones<br />Language<br />
  4. 4. OR IS IT?<br />Still need to sell product procured abroad at a profit<br />Do not discount domestic capabilities<br />Get quotes from domestic producers<br />Compare. Add the time, effort, uncertainty and relative lack of recourse of foreign sourced goods<br />Do I need license to import<br />
  5. 5. What is an HS Number and How do I get one<br />Harmonized Tariff Systems<br /><br /><br />
  6. 6. WHY IMPORT<br />To buy directly from the source abroad<br />To acquire products not manufactured in own country<br />Cost benefits , cost quality considerations<br />Made to order flexibility<br />Take advantages of other countries export promotions<br />To expand, enhance your business line<br />To offset export operation<br />To travel abroad<br />Minimize taxes, travel abroad<br />To make a profit <br />Establish business credibility<br />
  7. 7. Basics business practices<br />Is it legal <br />Knowledge of the business<br />Knowledge of the Import Process<br />Business etiquette as applied to source country<br />Accept verbal commitments as stated in a written fully executed contract (in English)<br />Trust is nice but ………...<br />Be flexible<br />Use professionals<br />
  8. 8. More ………...<br />Keep it simple<br />Know your market<br />Define limitations<br />Make a cold financial assessment<br />Is it worth it?<br />Has it been worth it?<br />Why pay?<br />
  9. 9. Sourcing your product <br />I have the ideal product/service<br />I will be able to sell it at a PROFIT.<br />I know that someone somewhere has sourced a product similar to mine at a lower price and that someone is selling it at a higher price. I just need to find the source<br />Do not wait for perfection. Settle for pass<br />Always seek U.S. sources for comparison<br />
  10. 10. WHERE TO SOURCE YOUR PRODUCT<br />Embassies/<br />Consulates Commercial Attaches<br />Associations<br />AMCHAMS<br />ASK THE SELLERS<br /><br /><br /><br /><br /><br /><br /><br /><br /><br />globalspec,.com<br />
  11. 11. MORE WEBSITES<br /><br /><br />trade-circuit.cov<br /><br /><br /><br /><br />
  12. 12. Sourcing, defining your needs<br />Define your needs<br />Have them in writing<br />Are they reasonable<br />Is there a mutually beneficial relationship between yours and your potential supplier needs.<br />
  13. 13. Sourcing, on business relations <br />Define relationship <br />Recognize imports = different culture <br />Quality issues<br />Production issues<br />Logistical issues<br />Payment concerns<br />Be prepared to do business<br />Have adequate working capital<br />
  14. 14. Import Products<br />Easy to Import:<br />Crafts/Artwork/Glass<br />Gems/Semi-precious<br />Household appliances<br />Tools/Sporting goods<br />Musical instruments<br />Leather goods<br />Stationery / Paper goods<br />Difficult:<br />Drugs/Spirits<br />Aerospace/Radioactive<br />Animal live<br />Used merchandise<br />Foods/Cosmetics<br />Chemicals/Combustibles<br />Weapons/Explosives<br />Vehicles<br />
  15. 15. Commonly Prohibited<br />Embargoed Countries<br /><br />National treasures, archeological finds<br />Material considered pornographic<br />Food or products raised in infected countries (foot & mouth; mad cow)<br />Products that violate intellectual or industrial right laws<br />Products from endangered species<br />Drugs not approved by FDA<br />Other<br />
  16. 16. DO I NEED A LICENSE TO IMPORT GOODS<br />U.S. Customs Service does not require an import license for goods brought into the United States. However, other agencies may require a license or certification.<br />FDA, DOE, DOJ, EPA, , Textiles, Federal Trade Commission, Wildlife Dep. Of Interior<br />
  17. 17. Due diligence<br />Check your potential supplier <br />Talk to competitors<br />Distributors<br />Equivalent BBB<br />Check with the US Embassy<br />Inquire with friends and acquaintances<br />Check with Intl. Clubs (Moose, Elk, Lions, Rotary, Masons & other fauna)<br />
  18. 18. More on due diligence<br />Secure suppliers start small<br />Common sense vs genius<br />Federal, state, county and city agencies<br />Check, recheck your assumptions<br />Remember cultural, linguistics and geographical differences<br />Use plain, simple, idiom-free language.<br />
  19. 19. How Do I Get Started?<br />Select a product or service:<br />Apply common sense<br />Stick with what you know<br />Use your cultural knowledge<br />Perform marketing research<br />Niche product, in niche market<br />Management Commitment<br />
  20. 20. WHAT AM I?<br />IMPORT TRADING COMPANY? (Manufacturing Rep) <br />IMPORT MANAGEMENT? (Wholesaler/Distributor)<br />MANUFACTURER? – Value Added Reseller (Inputs transformed into goods)<br />RETAILER?<br />
  21. 21. Import Trading:Primary Activity: Sell products to domestic buyers<br />Take title to goods<br />Buy product from the manufacturer & resell<br />Arrange for shipping and payment<br />Advantages:<br />You determine price; can make more money<br />Long term relationship with both manufacturer and foreign buyer<br />Overall, have more control in the marketplace<br />Disadvantages:<br />More liability<br />
  22. 22. IMPORT MANAGEMENTPrimary Activity: Sell foreign goods to domestic buyers<br />Don’t take title, put buyer & manufacturer together<br />Receive Commission<br />Shipping arranged by manufacturer<br />Payment arranged by manufacturer<br />Advantage: Less liability<br />Disadvantages:<br />Manufacturer could determine price<br />Manufacturer will try to terminate relationship<br />Less control <br />
  23. 23. Once a product is selected..<br />What do we want (as company) to gain from importing<br />Is importing consistent with company goals?<br />What demands will importing place on key resources? How will they be met<br />Are the expected benefits worth the costs or should the resources better used in new domestic business?<br />
  24. 24. Perform Market Research Questions To Ask:<br />Manufactured in country?<br />Is other competition there?<br />What price is product being sold at?<br />Is there cultural applicability?<br />Product meet USA standards?<br />Can it be adapted to standards? If so, $<br />Restrictions or regulations?<br />What are the different markets for your products?<br />Who are the distributors?<br />Who are the final consumers<br />
  25. 25. How To Perform Marketing Research<br />TALK TO YOUR COMPETITORS<br />WWW.STATS-USA.GOV<br />USE ASSOCIATION<br />USE INTERNET<br />Call End Users<br />Visit the BRC!!!<br /><br />USE OTHER COUNTRIES RESEARCH!!!<br />I.E.,<br />
  26. 26. How do I get an HTS Number<br />Harmonized Tariff # Search<br />2. Entire HTS<br />3.<br />
  27. 27. Your Partners<br />Your clients<br />Your procurement source<br />Custom Broker<br />Freight Forwarder<br />International Banker<br />Attorney<br />Custom Lawyer<br />Certified Public Accountant<br />
  28. 28. Freight Forwarder<br />They move freight internationally<br />Don’t confuse with a custom broker<br />Information you need:<br />Weight of shipment<br />Dimensions of shipment<br />Where it is being shipped from<br />Where it is being shipped to<br />Collect or prepaid<br />
  29. 29. CUSTOM BROKER<br />Efficiently & legally obtain clearance through customs<br />
  30. 30. Incoterms 2000<br />EXW: City, State, Country<br />CIF<br />CFR<br />FOB<br />DDP<br />International <br />Commercial <br /> Terms<br />
  31. 31. Pricing Products<br />Cost from foreign manufacturer <br />Freight /Insurance<br />Duty / Custom Broker<br />Other Costs /Indirect Costs<br />Profit<br />Distributor mark-up<br />Retail mark-up<br />Cost comparison – Competition Price<br />Common sense test<br />
  32. 32. Documentation<br />SLI: Shippers Import Declaration/Bill of Lading/Carrier Certificate naming consignee<br />Commercial Invoice from Exporter, showing value & describing merchandise<br />Packing List<br />Certificate of Origin<br />Entry Manifest Customs Form 7533 or Entry Immediate Delivery (Customs Form 3461)<br />Rely on your custom broker<br />
  33. 33. Contact The Manufacturer<br />Obtain exclusivity<br />Right to commercialize product<br />Check USPTO<br />Brochures<br />Samples<br />Warranties – Guaranties<br />Marketing Allocation<br />
  34. 34. How Will You Pay The Manufacturer?<br />Terms<br />Letter of Credit<br />Wire Transfer<br />Payment in advance<br />
  35. 35. Purchase OrderProvide Information For Seller to Make a Sales Decision<br />Your Company Name<br />Buyers Name<br />Date<br />Reference Number<br />Quantity<br />Description<br />Unit Price<br />Extended Price<br />Currency <br />Weight of Product<br />Dimensions of Product Packed<br />Country of Origin<br />Point of Delivery<br />Payment Terms<br />Request Valid For<br />
  36. 36. Intellectual Property – Contractual Obligations<br />Trademarks – Who owns what<br />Exclusive Distribution Arrangements<br />Warranties - <br />Replacements<br />Shared Marketing Costs<br />Royalties<br />
  37. 37. Getting Paid<br />USD Dollars <br />Do not sell on open terms or consignment<br />Credit Card<br />Industry Payment Terms<br />Checks<br />PAYPAL..COM<br />ESCROW.COM<br />
  38. 38. Information <br />Commercial Attaches<br />Business Associations (I.e, Korean/America, Hungarian American, etc)<br />AMCHAM<br />US Embassy<br />Web - Thousands of organizations<br />Friends, acquaintances, PXs, churches, etc.<br />
  39. 39. More<br />Go to fairs, network <br />Keep proper records<br />When is best to use a wholesaler rather than the source<br />Ask your competitors<br />International yellow pages<br />Settle on pass not A++<br />
  40. 40. A few websites <br /> <br /><br /><br /> US Customs<br /><br />
  41. 41. On contracts, trademarks, distribution agreements, pro forma invoices, and ….<br />Understand the terms as understood by others<br />Contracts should always be in English<br />Do not agree to something you do not fully understand<br />Leverage available resources<br />Take your time<br />Persevere<br />
  42. 42. BUSINESS PLAN - FIRST DRAFT<br />Primary objective is to develop a Draft<br />Will indicate what next steps to take<br />Quick & dirty<br />Overall guide<br />Reality test<br />
  43. 43. Draft Business Plan must address<br />Product selection and modifications if any.<br />What source countries are targeted<br />For each product what is the basic costumer profile<br />What marketing and channels<br />What special challenges to each and how to overcome them<br />How will the products’ import sales price be determined<br />What specific operational steps must be taken and<br />
  44. 44. Customer Service<br />You must service your accounts!!!<br />Customer Service Academy<br />
  45. 45. Q & A<br />Riverside CITD<br />Robert Corona<br />(951) 571 -6443<br />(909) 486-3344<br /><br />