One of the problems many first time importers have is not being able to correctly estimate their likely landed costs of the goods they are importing from overseas. This is often a problem especially if importing from the Third World countries, including China, Thailand, Indonesia and India. Remember, you should calculate your anticipated landed costs before you start buying because your ultimate profit will depend on how well you calculated.
First of all, you will need to get an estimate of freight from point of origin to destination. To get a correct estimate you need to have a clear idea of total shipment. Preferably the supplier should give you an estimate of the carton weight, carton being the packed shipment, and the number of shipping cartons the shipment will consist of. Ideally you will need not only the carton weight but also its dimensions.
Second, the suppliers should provide you with an invoice description of each product shipped so as your customs broker will be able to quote you door to door cost of your shipment. The invoice description is used to select correct category from the Harmonized Tariff Schedule and the Door to Door quote will be inclusive the customs clearance at destination based on the specific category used. Having that quote you can then prorate the inherent product landed cost on top of your product cost.
To minimize your landed costs I’d recommend you limit the number of categories you’ll want to pack into the same shipment. Often a time suppliers may lump similar products under the same description without providing more details to assist the broker in picking the proper category out of the HTS.
For example, the supplier’s invoice may say Gift Pouch made of silk, though the silk may contain 20% cotton which will immediately render it in a different HTS category and subject to different duty ad valorem. The invoicing should show clearly fiber composition in percentages of the fiber used or the customs will ask for the shipment to be inspected to identify the product, which will result in inspection charges billed to you the importer in customs clearance and thus will increase the landed cost of your product.
To avoid potential problems with your import venture it may be wise to consider working with an import business consultant.
For exact Door to Door sea freight shipment quote customs brokers require also the exact shipping address of the vendor at point of origin of the goods as well as the exact address of the consignee at destination.
If you discover that your Door to Door quote is over 15% of the shipment’s invoice value, I recommend you increase the size of the order, so your invoice value is at least 3-times what it might had been first, and then ask the broker – freight forwarder for another Door to Door quote inclusive the broker charges for customs clearance at destination.
- Textile quota restrictions no longer apply
- Opportunities in Import Export Business