If you have an amazing product idea, you should source and import it by all means. The gist of importing is to broaden your choice of suppliers all over the world, decrease the price and increase the profit margins. Going for Clearit customs consulting helps you achieve more of this. These all are a part of global strategy to deem yourself a competitive force in the market. Here is how to do it.
- Order the materials at a low price
For instance, you ask an American manufacturer to make hammers to add it to your hardware products collection. They charge you a dollar per unit on the basis of a minimum order of 10,000 units. Then, you also ask a Korean manufacturer to make the same hammer and it costs you 25 cents a unit on the basis of a min order of 5,000 units. When you add transportation, markup, duties, tariffs, insurance and exchange rates, you still get a cheaper price with Korean manufacturer when compared with the American manufacturer. Hence, always shop around before landing onto the first supplier. This may not be valid all the time, but you can save a lot of money by dealing with countries that have low labor costs that can produce goods at cheap prices. The quality is good nonetheless.
- Import from a country nearby to save money on transportation
If you are based in the US, you can think of exporting from Mexico or Canada. This helps in shortening the route, brings down the freight expense and lets in faster deliveries as well. And the best part is, NAFTA has some really good international trade incentives in store for you.
- Buy the same product in various colors
When you consider the hammers mentioned in #1, it is mostly a one time investment you will make for design and manufacturing mold to make it. Ensure to get the product made in 5 different colors. Then you can disperse this investment in many SKUs or standard stock keeping units in order to save some money. It also makes your customers happy when they are presented with many choices.
- Build creative payment terms and follow them
Rather than making full payment at delivery, you can ask your supplier for a time payment like 30, 60 or event up to 100 days to make the full payment after the goods are being transferred to you. Importers love this method, but it may impact your supplier’s cash flow. Negotiate the terms to make it a win win for both the parties.