Successful Sourcing
and Importing Overseas
Tim Redhed
Overview
• Purpose of this class
– Offer practical, real-life advice on how to
effectively source and import products
• Background
Tim Redhed
Global Sourcing Specialist
YourBuyer Inc.
Sourcing
• Overview: using common sense
– Does it make sense to import the product?
Weight, labor, commodity vs. specialized
– What are the likely countries?
– Trusting your instincts
– Avoiding assumptions
– Guerrilla sourcing
Sourcing, cont’d
• Searching for suppliers –
– Google vs. Trade Portals
– Specific portals: Alibaba, HKTDC, Global
Sourcing, TradeEasy
– “Gold” or “preferred” suppliers
– Foreign consulates – export promotion
– Referrals
Sourcing, cont’d
• Trading groups vs. manufacturers
– How to differentiate
– Pros/cons
• Contacting
– Email vs. Fax vs. Phone vs. In-person
Importing
Ok, I found a vendor, NOW what do I do?
1. Find a good customs broker
2. Find a good freight forwarder
3. CIF vs. FOB pricing
Negotiating
• Cross-cultural communication
– Do your homework on the culture
– Listening as an art
– Buying is the same as Selling
• Recognize that the vendor you want may not
want you
• Multiple vendors
• Terms
– 100% TT, 30/70, Letters of Credit
Calculating True Costs
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•
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•
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Tooling charges
Sample charges
Inspections – SGS or other
Duty rates – HS codes
Customs broker/port/FF fees
Freight – international & domestic
– CBM, peak rates, EBAF, palletization
Top Mistakes When Importing
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Vendor not properly qualified
Product quality didn’t meet expectations
Pricing changed at last minute
Underestimated freight charges
Production delays not anticipated
Freight delays not anticipated
“Manufacturer” was really a trader with no control
Wrong HS code, wrong duty rate
Customer staff not properly trained on the nuances of
importing
Summary
•
•
•
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Source creatively
Negotiate by listening
Manage expectations
Never assume!
• YourBuyer, Inc. as a sourcing tool
Appendices
1. Major trade portals
2. Government links & miscellaneous tools
3. Sample costing worksheet
Appendix 1: Trade Portals
• Asia
www.alibaba.com
www.hktdc.com
www.globalsources.com
www.ebigchina.com
• North America
www.thomasregister.com
Appendix 2: Gov Links & Misc. tools
• USITC Tariff and Trade Data site
– http://dataweb.usitc.gov/scripts/tariff2004.asp
• HS Code lookup
– http://trade.netvigator.com/gtd/english/html/3_mc.asp
• Conversion tools
– http://www.onlineconversion.com/
• World Clock
– http://www.timeanddate.com/worldclock/
Appendix 3: Sample cost worksheet
Costs
Unit
Unit Totals
Product Cost (ex-factory):
$
1.000
International Freight:
$
0.09
$
39,800
$
3,415
Misc. Labor Costs (palletization, etc.)
$
-
Domestic Freight:
$
-
$
-
Domestic Fuel Surcharges:
$
-
$
-
H.S. Code
Duty Rate 1 - %
Duty Rate 1 - $
3.00%
$
0.030
$
1,194
Duty Rate 2 - %
Duty Rate 2 - $
0
$
-
Bond:
$
0.003
$
119
Broker Fee:
$
0.003
$
125
Misc Fee (Processing):
$
0.002
$
84
Misc Fee (Maintenance):
$
0.001
$
50
Inspection fees @ $1000 ea.:
$
0.025
$
1000
Miscellaneous Costs 1:
$
-
Miscellaneous Costs 2:
$
-
$
-
Questions