Class 2 for starting an import export business

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Class 2 for starting an import export business

  1. 1. Starting an Import/Export Business<br />Week Two<br />Presented by<br />Clarence Light, MS, CPA, CGFM<br />
  2. 2. Importing and Exporting Basics<br />Two sides of the coin<br />Similar approaches—Pricing, marketing, agency, distribution<br />Regulation<br />Importing—Customs and Border Protection<br />Exporting—U.S. Department of Commerce<br />
  3. 3. Importing Basics<br />Preexisting distribution network and contacts<br />Limited marketing (family members)<br />Shipping and Regulations<br />Establishing import activities<br />Agents<br />Marketing<br />Distribution<br />Shipping and Regulations<br />
  4. 4. Importing Basics<br />Find a product<br />Find the best source<br />Obtain samples<br />Cost the product the samples represent<br />Present the sample at trade shows<br />Order stock based on the demand from the trade shows<br />How Small Business Trades Worldwide, (Spears, 2001)<br />
  5. 5. Import Information Sources<br />Internet<br />Example—Thomas Register<br />www.thomasnet.com<br />Agents for wholesalers and retailers<br />Regulations<br />Importing into the United States<br />www.cbp.gov<br />Informed Compliance Publications<br />What Every Member of the Trade Community Should Know About: ……..<br />
  6. 6. Import Information Sources<br />Agents for wholesalers and retailers<br />Examples<br />www.oneworldsourcing.com<br />www.alibaba.com<br />www.tradekey.com<br />www.fita.org<br />
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  9. 9. Import Regulation Basics<br />U.S. Bureau of Customs and Border Protection (CBP) <br />Previously U.S. Dept. of Treasury<br />Currently U.S. Dept. of Homeland Security<br />Specialized Documentation<br />
  10. 10. Import Regulation BasicsImport Process<br />Entry <br />Evidence of right to make entry<br />Surety (bond)<br />Examination of Goods and Entry Documents <br />Classification and Value <br />Assessment of Duty<br />Payment of duty and release of bond<br />Release of shipment to importer of record<br />
  11. 11. Import Regulation Basics<br />Tariffs <br />International Trade Commission<br />Injury determinations (Antidumping cases) <br />Harmonized Tariff System<br />Quotas<br />Absolute<br />Tariff-Rate<br />
  12. 12. Import Regulation Basics<br />Harmonized Tariff System<br />Complexity rivals the Income Tax Code<br />2,959 pages<br />99 chapters<br />10,523 separate tariff lines<br />Interactive Tariff and Trade Database<br />
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  21. 21. Import Documentation<br />Commercial Invoice<br />Certificate of Origin<br />Letter of Credit<br />Sight Draft<br />
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  23. 23. Source: Import/Export, Nelson, p. 28<br />
  24. 24. Mail Shipments<br />Advantages<br />Ease in clearing shipments through CBP <br />Savings on shipping charges<br />Smaller, low-valued packages may be sent less expensively through the mail <br />
  25. 25. Mail Shipments<br />Duties ≤ $2,000 collected by carrier<br />No formal entry required on duty-free merchandise ≤$2,000<br />No need to personally clear shipments if < $2,000 in value<br />
  26. 26. Export Basics<br />Similar issues as importing—marketing, agency, distribution<br />Political and cultural considerations<br />U.S. Department of Commerce <br />Export Licensing<br />Documentation<br />Shippers Export Declaration (SED)<br />Automated Export System (AES)<br />
  27. 27. Export Marketing<br />Potential unfamiliar markets<br />High incentives from U.S. Government <br />Trade deficit<br />Government resources<br />International Trade Administration<br />U.S. Commercial Service<br />Foreign Commercial Service<br />Small Business Administration<br />
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  29. 29. Export Regulations<br />Export controls<br />Limited to extensive<br />Military applications, drugs, nuclear material<br />Export Administration Regulations (EAR)<br />U.S. Department of Commerce<br />Commerce Control List (CCL)<br />Export licensing<br />Less than 4% of U.S. manufactured products require an export license (Nelson, 2000)<br />
  30. 30. Shipper’s Export Declaration<br />Required for most shipments out of the borders of the United States<br />Basically for statistical requirements<br />Exceptions<br />US to Canada (unless export license required)<br />US Virgin Islands to US<br />US Virgin Islands to Puerto Rico<br />US/Puerto Rico to Other US Possessions<br />Other US Possessions to US<br />

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