Chapter 1. Getting Started

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2 Foreword In the Australian marketplace, importing products from foreign countries can be a profitable venture for your business. You may have already considered the possibility of importing certain foreign goods to help you expand your product line and give customers access to products that they cannot find in Australia. In order to make sure that you are able to capitalize on these opportunities, there are some aspects of the importation process that you will need to address before moving forward. International trade is thriving, and it has been for many years. Importing gives consumers the ability to purchase goods that they would not otherwise be able to find in their native country. If you develop a solid plan and execute it effectively, importing goods into Australia can help you start your own business, or you can simply add a new product to your existing business. As long as you prepare and plan properly to import a great product with a lot of potential, you will be able to effectively encourage more sales by participating in international trade. This book will give you insight into how to plan for the importation of new products and a basic overview of the process so that you can become proficient with importation. You can apply this hands-on knowledge directly to your business so that you can begin to expand your market share by offering products that are not readily available from other retailers in Australia.

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4 Chapter 1 Getting Started Importing is a simple yet effective way to give your customers an opportunity to purchase products that they need or want, and it gives you a chance to capitalize on the potential of certain products that other retailers may not be offering. Before you import any product, you must first determine whether a market exists for these products and how they can fill a specific need that your customers have. You will need to address who your potential customers are and how this product could effectively meet their needs, and then you will need to explore further to see if your customers would be interested in purchasing such a product. After you have gone through the extensive discovery process, you can then take certain steps to ensure that your transactions across nations are efficient and productive for your business. According to Australia s Small Business Development Corporation, there are 10 essential steps that you must take after you have chosen a product that you want to import.

5 Step 1: Identify Suppliers of the Product After you have chosen a product, you will need to research potential suppliers that carry this product. In order to make sure that you find the highest quality products at the lowest price, it would be better to make a list of several different suppliers so that you can inquire about pricing details, applicable payment terms, and request a sample. Some suppliers may offer you a catalogue so that you can browse their product line in full before importing the goods. There are several organizations that you can use to help you narrow down your search for a supplier of any particular product. Foreign embassies, industry or trade associations, and the country s governmental department of trade are all good places to start. The Internet can also be a useful resource when you begin searching for a supplier, and you may even be able to access an online catalogue to help simplify the process. When you are discussing the importation process with a supplier, you should make sure that the payment terms are discussed in relation to incoterms. Incoterms are used as a basis of determining prices in relation to international trade, and they can help you avoid misunderstandings with your supplier in the future.

6 Step 2: Contact a Customs Broker for Assistance If you are unfamiliar with the customs process in Australia, a broker can be invaluable to the trading process. A customs broker will expedite the process of importing your selected goods, and they will ensure that all of the legal paperwork is filed correctly so that you are able to receive the goods once they arrive. Brokers specialize in handling tariffs, duties, taxes, and valuation, and this will allow you to complete the process more efficiently. Step 3: Visit Your Bank s International Division When you discuss the opportunities with your bank, you can finalize the financial details of the transaction. You can discuss costs and financing options to ensure that the bank will allow for the transactions to be completed. You can also discuss payment methods to effectively plan for a smooth and pleasant transaction on both ends.

7 Your bank will be able to discuss with you the financial aspects of making the decision to import goods, and they will also be able to advise you on the best paths to take as you enter into an agreement with a foreign supplier. Step 4: Analyze Related Expenses to Determine the Total Cost per Product When you import goods, you might want to import certain products that are available in Australia but that you can find overseas at a lower cost per unit. This is often a great way to decrease costs to your business, but there are several importation costs that you will need to calculate in addition to the supplier s total cost of each product per unit. Following are a few costs to include in your calculations as you determine the total importation cost. Customs Charges Freight/Shipping Charges Insurance Inland Transport GST Import License Fees Quarantine Fees Exchange Rate Discrepancies Bank Charges Storage Charges

8 All of these costs will not be applicable to every scenario, and that is why it is important to discuss the total cost with your customs broker if you are unsure. If you are already aware of each individual cost that you will incur, you can accurately determine a per unit figure for each product. Once you have this number in mind, you can weigh the benefits and costs of importing the product more effectively. Step 5: Will this Product Increase Profits to Your Business? After you have conducted market research and calculated a total cost per unit for importing these goods, it is important to determine if this product will still accrue the profits that you expect. Importing goods based on a complete overview of the financial implications for your business will help you decide whether or not taking this step makes sense for long-term productivity.

9 Step 6: Address Requirements on the Products When importing certain products to Australia, you will need to find out whether there are any special or restrictive requirements on importing these products. This is an area that you could consult with your broker about, as they would have more information on specific types of products and any restrictions or quotas that may apply. Another area to consider when you are importing foreign products is whether or not the products will require an extensive inspection upon arrival. Some goods will pass through customs quickly, while others will be held over while a lengthy inspection is performed. To ensure that you are able to receive the products without delay, you should also address the inspection process with your broker.

10 Step 7: Contact the Supplier and Place an Order At this point, you are ready to begin the importation process. Once you place your order with your chosen supplier, you should also make sure to request a written document that establishes that they received and are processing your order. At this point, you should review the applicable terms and conditions placed on your order so that you can understand how the supplier will handle your order and what you can expect next. This is also the time to clarify any misunderstandings or miscommunications that you have had with your supplier. In international trade, it is easy to overlook certain aspects and become confused with language barriers and other geographical roadblocks. To ensure a smooth transaction, you should discuss the payment terms, quality of product(s), and any other areas that are of particular importance to you with your supplier to ensure that you are on the same page.

11 Step 8: Keep in Contact with Your Customs Broker After you have placed an order with your supplier, you should notify your customs broker so that they can continue to assist you with the process. Provide any and all details that could be relevant to the process so that your customs broker can expedite the process more effectively. Your customs broker may offer to clear the goods for you, so you should discuss this option to ensure that you know how you will be receiving the goods once they arrive. Step 9: Tracking Your Goods and Clearing them Upon Arrival If you are using a customs broker, they will probably be able to handle this step for you. However, if you choose not to use a broker, you will need to make arrangements to clear your goods through the customs area. They also may need to be quarantined for a period of time until they are cleared, and you will need to stay in full contact with the customs agency to ensure speedy and efficient clearance

12 Step 10: Receive the Goods and Begin Marketing Them At this point, your goods will already be in the country and cleared through customs. You should plan to receive the goods and perform a thorough inspection. Once you are satisfied with the quality of your products, you can give the company a clean inspection. If you are not satisfied with the quality and/or quantity of the products, you will need to contact the supplier to take action in returning the goods. Once you have the goods in hand, you will need to begin marketing them effectively by ensuring that you reach potential buyers that would have a particular interest in these products. In order to effectively market foreign products, you will need to research and analyze the market effectively. When you import foreign goods, taking these steps will ensure a better smoother, more effective import process. Before you start to import goods, you may want to take a closer look at the goods and the supplier that you will choose.

13 Chapter 2 Which Products Should You Choose to Import? Trade is the foundation of many civilizations, and importing foreign goods will allow you to take a closer look at products that could potentially lead to increased sales for your business. You might already have in mind some products that you wish to import, or you could be in the process of searching for these particular products. Ultimately, the most important decision that you will make is the product(s) that you choose to import. Some products will thrive, while others will sit on the shelves for months or even years. Choosing the Right Products to Import If you are now ready to explore the unique selling opportunities that you will encounter from importing products outside of Australia, you will need to make sure to research your market and plan accordingly. In order to make sure that you choose the right products, you will need to first perform an assessment of your target market and determine whether there is a demand for these products in Australia. With a bit of research, you can save a lot of time and money by choosing products that will fulfil a certain need for your customers. Researching the Market for New Products Performing this market research is absolutely essential to making a good decision on which products to import. You will find a multitude of exciting new products to add to your inventory, but if your customers don t want or need the products that you offer, you could end up losing quite a bit of money on the deal. If you are aware of what your customers need, then you can answer this question almost intuitively.

14 To illustrate, if you distribute materials to make furniture and there is a high demand for a certain type of wood that is not available in Australia, this would be the type of product that you want to import. Conversely, if you sell a particular clothing line and you want to add more clothes to your available inventory, you should make sure that your customers are interested in purchasing from this new line before you take the time to import the products. You should also make sure that the clothes are high quality so that your customers do not buy the new line and end up feeling disappointed with the purchase. Compiling Resources to Assess Which Products will be Profitable. If you take into account the most important considerations when researching your products, you can find the one that will be most profitable for your business. The market research that you conduct will give you insight into the Australian market so that you will understand which products are the most and least productive to import. If you already have a growing business, you could also analyse your current customers to note their buying trends and which products they purchase most often.

15 Determining the Fundamentals of Your Target Market Now that you have established a need for a specific product or service, you can make your importation plans even more effective by learning more about their interests, tastes, geographic location, and ways that your product will be of use to them. When you begin marketing these foreign products, this information will help you develop a highly effective, targeted marketing message. In addition, it will also help you plan and implement the import more effectively. Research and planning for these areas will help you be better prepared when you decide to release your products to the public. Gaining more information on your new products can help you assess how you should present these items to the public so that you can increase sales and ultimately become more profitable in your business. Defining Your Potential Buyers If you are a supplier yourself, you may want to sell to other suppliers in Australia. If so, you need to understand exactly how they make decisions on new products to stock so that you can design effective strategies to convince them that they need to be stocking your products. If you are looking to incorporate these new products into your current line and sell them directly to an eager customer base, it is important to note all of the realistic trends that are current in your business. If customers have approached you about specific brands or products that you do not carry, this is an ideal opportunity to discuss ways that

16 you can increase customer satisfaction by importing outside products. Communicating with your customers is one of the best ways to determine whether or not they will be interested in the new products that you wish to import. If you already have experience with a particular product, you may simply want to replace the product that you currently stock with a more cost-effective foreign alternative. In order to do this effectively, you should record and analyse the current sales related to that product and consider whether the foreign product will do as well. In many cases, people are more than willing to buy a foreign alternative, especially if it is less expensive. However, you should make sure that you are not sacrificing quality for the price because this could lead to dissatisfaction and a loss of steady customers. Draw from Your Experience One of the best ways to begin importing new products is to do so with a product line or a specific type of product that you are already familiar with. This will allow you to more confidently sell the products, and you can draw on your previous experience as to whether or not buyers will be interested in the imported good. If you don t have any experience, you can still increase profitability by importing goods, but you will need to conduct extensive research on the product and your potential buyers to ensure that the items that you have chosen will be profitable for your business.

17 Conducting In-Depth Investigation before Settling on a Product When you launch new products, there are certain areas that you will need to explore in-depth before you are able to make the best decision. With importing, conducting extensive research on the subject will allow you to more effectively choose the products that are best suited to do well in your industry. If you are just starting out with a new business, the market research that you conduct now is essential to prospering in the industry. The types of products that you choose will determine whether or not you become successful, and you will also need to find a supplier that can offer you reasonable pricing and low transport costs. This will be covered in the next chapter.

18 Chapter 3 Choosing the Right International Supplier Importing international goods can help you reduce your operating costs and increase profits, and finding the right supplier will help you accomplish your goals for importation more effectively. Suppliers in foreign countries will either be experienced with importing their goods, or they will not. You want to work with the former. Suppliers that have experience in importing will know all of the processes and procedures that will need to be completed in order for the process to run smoothly. If you choose a supplier with little experience, you may encounter struggles as you attempt to complete the transaction and have your items shipped to Australia. Assessing the Value of Working with a Supplier Once you know which products you need to import, you will be able to access information on a variety of different suppliers. Choosing the right option could mean that you will speak to a representative from each company to ensure that you are able to communicate effectively and receive the information that you need to make the best decision. With a good supplier, you can easily import goods on a regular basis and receive them in a timely manner. On the other hand, you may encounter other suppliers that have little to no experience in handling importation, which can set you back and make it more difficult for you to actually complete the process. In order to choose the right supplier, there are several aspects of each company that you should consider.

19 Quality and Safety of Products Importing products from foreign countries is an excellent opportunity for decreasing costs. However, you should make sure that the quality of each product meets a standard that you feel comfortable with. After all, your business will depend on producing and distributing quality items to your suppliers and/or customers. In order to ensure that the importation process is worth your while, it is important to inquire to understand how well the products are made and how long they will last. Knowing this information will increase your confidence in the products and allow you to market them more effectively (and truthfully). The safety standards in use with certain products are also very relevant. If you are purchasing baby products, it is essential that you ensure that the international supplier meets the standards set forth to ensure that children will be safe while using the product. If you are purchasing building materials, the same general rule applies. One other area to discuss with your supplier in regards to quality is whether or not they allow for third party inspections of their facility. Quality control investigations play a critical role in ensuring that minimum safety and standard protocol are being met by suppliers, and they should be open to having these types of inspections performed.

20 Country or Specific Location In addition to assessing the quality of the products, you should also choose a specific country to find a supplier. Most businesses import products from China because it is often the most affordable way to receive quality products. Regardless of which country that you choose to use, you should plan on staying within that country at least in the beginning. When you choose one specific region, you will be able to become more familiar with the importing procedures from this country to Australia, and this will allow you to expedite the process when you need to replenish your stock. If you are attempting to import from several different countries, you could run into issues along the way if a country s customs or duties are different than those that you are accustomed to with the other countries that you have imported from. When you are selecting the country that you plan to import from, you should make sure that they stock an ample portion of the products that you need. Some companies may have a certain number of products in stock, but if they are unable to produce more, you will find it difficult to keep a continuous supply of the products without importing from another supplier. If you find a supplier in the country that you choose with a large supply of the products and favourable labour costs, you will be well positioned to make a good decision financially for your business. Evaluate References Once you find a supplier that offers you the goods at a reasonable cost, you should check to see whether they can provide you with acceptable customer references. Most suppliers will have a list of references on hand that they will not hesitate to give you, and this shows that they are dealing reputably and have already serviced satisfied customers in the past.

21 Checking references is something that you should do when you are forming a relationship with a supplier long-term, and it can also help you choose between several different suppliers of the same product. If you have a list of suppliers, the references that you get for each company will help you narrow down your search to only the ones that can provide exceptional service and support while also providing quality products. In conjunction with reviewing customer references, you can also find out more about the experience that each company has with trading internationally. An experienced company will be able to give you advice on how to complete the transaction in the most cost-effective, speedy way, and this can help you determine which company will be best in regards to how they handle your business. Obtain a Credit Check You can also work with foreign credit companies to review the supplier s credit history. This can be helpful in determining which company is prompt and reliable with their transactions, and it may also give you more insight into the efficiency of the business. If you are intending to establish a long-term relationship with the supplier, a credit check may be necessary to ensure that the business is profitable and will remain so. Analysing Capacity for Supply When you choose to work with a supplier, you will need to ensure that they are able to handle distributing the volume of products that you intend to buy. Some manufacturers or suppliers may have

22 access to limited quantities of a certain product, and it will be beneficial to establish the quantity that you can expect to be provided to you upon request. Every supplier will have a different policy regarding the quantity of products that can be exported, so you will have to assess how much you need first to determine which supplier is the best fit. Cultural Aspects to Assess When you trade with a foreign supplier, you might find that you are not able to speak the same language, and even if you are, there may be barriers to your communication that will hinder the process and create unnecessary obstacles. Your primary contact with the supplier should be able to speak English proficiently and provide all of the information that you will need in order to make an informed buying choice in regards to which products you will purchase. They should also be knowledgeable of Australian.business practices and be able to give you information on the import process into the country. Request a Site Visit After you have gone through the process of selecting a supplier, it is important to ensure that they will allow you to visit their facility if you choose to do so. Many companies allow this, but some do not. In order to establish a strong relationship with your supplier, they should allow you to visit as often as you deem necessary.

23 Selecting a supplier or vendor that you can establish a long-term business relationship with will allow you to increase productivity by ensuring a seamless transaction process. Working with the right company can make all the difference, and if you really want to gain confidence in your decision to work with a particular supplier, you should take the time to travel and visit their facility.

24 Chapter 4 Going to China Beforee you decide to work with a supplier in China, you might want to visit them to get a better feel for how they do business and to understand the importation process. You can form a more full picture of how the goods are handled and/or produced so that you can ensuree that the company that you are most interested in working with is the best choice. Expanding your product line is an important step that requires adequate planning. If you are uncertain about importing from China, the best way to learn more about the supplier and the service that you will receive is by visiting the country. Before you set out to visit suppliers in China, theree are certain steps that you will have to take in order to legally enter the country and find the suppliers that you can provide you with the right products to meet your needs.

25 Getting a Passport and/or Visa If you don t already have a passport, you will need one in order to travel to China. In some cases, it may be better to get a Visa, although most of the time you will not need it. You should apply for your passport well before you intend to travel to China so that you can ensure that it will arrive in time. Specific Areas that Produce Certain Goods In China, there are specific areas of the country that are known for producing certain types of goods. Depending on the type of product that you plan to buy, you will find that most suppliers or manufacturers are located in one general area. This is goodnewsbecause it will allow you to visit several suppliers without travelling to different areas of the country. Before you set sail, you will probably have in mind the supplier that you want to visit, but it may be best to keep in mind some alternative suppliers in case you want to do some further investigation while you are in the country. Things to Accomplish while Visiting China When you visit China, there are certain elements that you should look for when you are interviewing your supplier and inspecting the facility. You may want to visit the factory to learn more about the business, to understand how proficient the company is with handling international trade, and to inspect handling processes and manufacturing or supply techniques.

26 When you visit a supplier in China, you should discuss and assess the following aspects of the business. Is the management team available to assist with international trade and exporting goods? Are they competent and knowledgeable of all of the procedures used to import and export goods? Is the factory up-to-date as far as technology is concerned? Do they use outmoded procedures or are they able to produce products quickly and effectively? Is the factory in direct compliance with international labour laws and other international regulations? What types of customers does this factory have? Can the factory meet its stated production capacity? Will you be able to receive the quantity of goods that you will need from this supplier regularly and consistently? Does the factory subcontract work out to other factories or is everything accomplished in house?

27 Hiring an Agent in China to Inspect the Factory If you do not have the time or the available funds to visit China in person, you can also contract a third-party agency to perform an inspection for you and report back with the results. The representative will evaluate the supplier on your behalf, and you can provide specific questions that you want to have answered so that the agent can give you all of the information that you will need to make the best decision on a Chinese supplier. If you decide to hire an agent, make sure that they are able to speak the language fluently and also that they are able to converse with you to explain the findings that they uncover while visiting the supplier s factory.

28 Chapter 5 Communication in china when you are choosing a supplier in China, there will be several barriers to smooth communication that you will need to overcome. These barriers exist because most people in China do not speak fluent English, and the people that do make up only a thin layer of the 1.3 billion people in China. Language is only the first barrier to effective communication with your Chinese supplier. You may also have to address certain cultural differences that can play a role in forming a stronger relationship with your Chinese suppliers. If you plan to visit China, understanding how to best address the language, cultural, and legal barriers will help you prepare to successfully inspect the factory. Even if you intend to work with a certain supplier without inspecting the facility, learning appropriate communication methods that will help you connect with your Chinese suppliers will allow you to establish a long-term relationship with your supplier in the future.

29 Language Barriers In China, English is not uncommon. In fact, it is a rarity to hear people speaking fluent English in certain areas of China. Mandarin is the most predominant language spoken in China, but Cantonese may be spoken in specific areas of China. If you want to be able to communicate with the suppliers directly, taking the time to learn Mandarin will give you the ability to more easily discuss certain aspects of the importation process with the suppliers. If you do not have the time or patience to learn Mandarin, the best thing to do is to hire an interpreter to accompany you on your visit. Virtual interpreters or translators canalso assist in translating s or other virtual documentation so that everyone is on the same page as far as contractual obligations go. When you visit certain factories, you will find that there are some employees that speak English fluently. These people are usually hired for the sole purpose of selling you products; however, if you can contact a person that speaks fluent English and meet with them on site, you may be able to avoid hiring a translator to assist you. Cultural Differences In China, the first item on the agenda when communicating with someone new is to establish a connection. This could be in the form of discussing your occupation or any other connections that you have to China, e.g., tell them that you studied abroad in Beijing while in college (if you actually did) or tell them that your brother visited Shanghai a few years ago. Any connections that you can make with the country will be well received when you are attempting to establish a relationship with your Chinese suppliers.

30 The Chinese also see business as something that requires a more personal approach. Presenting your supplier with a fit or treating them to a meal will allow you to show that you are friendly and are interested in more than just business while you are visiting. Essentially, you should do things that will encourage your suppliers to find you more likeable so that you will receive the best services. Avoiding Mistranslations and Miscommunications With language and cultural barriers in China, it is very easy to be misunderstood or to misunderstand your supplier. In order to avoid these things, you should take some time to ensure that you are either able to communicate exclusively with someone that speaks fluent English, or you should hire a translator. If you are unclear about anything that is being said, you should make sure to bring it up so that you can gain clarity before you progress farther with the company. You should also encourage your supplier to ask you questions if they need to clarify certain aspects of the transaction.

31 Understanding when Yes Actually Means No The Chinese find it a cause for embarrassment to tell someone no, so they very rarely will do that. Now, they may not tell you no, but there are certain times when no may be the most appropriate answer to your question. If you receive answers like, Yes, but that would be difficult for us to do or Maybe we could do that, he or she probably means no. If you want a more complete answer to the question that you are asking, word it differently so that your response will be more detailed and will not require a simple yes or no. You may often find that rewording questions and asking them in a different way will make it easier for your Chinese suppliers to understand you and to respond to you effectively. Legal Differences Importing may cause you to encounter certain legal obstacles as well as the language and cultural differences. In order to make sure that you are able to address these issues on your initial inspection or when you are making your selection, you should hire a translator, interpreter, or agent to assist you. The agent that would perform an inspection will be able to give you more information on the legal processes involved with importing goods to Australia from china.

32 Remember these tips when communicating with suppliers in China: Use simple, easy to understand language that your suppliers will be able to easily respond to. Avoid yes or no questions unless you know the answer is yes and you just need them to expound. Learn some Mandarin or hire an interpreter to assist you when you visit China to inspect the facility. Contact a virtual interpreter to translate your s and online communications for better collaboration. Create real connections with the people that you communicate with in China. Make your communications about more than just business. Hire an agent to help you understand the legal differences between Australia and China.

33 Chapter 6 Shipping Methods When you decide to import products into Australia, you will have to choose your preferred shipping method in addition to all of the other aspects that will have to be considered when you decide to import goods. If you choose to hire a customs broker, they will be able to advise you on the quickest and most efficient shipping method from your country of choice. They can also help you ensure you re your products are being handled in the best way and expedite the shipping process for you. Shipping Methods If you are shipping from another country like China, you will basically have two options as to how the goods will arrive in Australia: by air or by boat. If you prefer airfreight, you will find that this is often a much more speedy way to receive your goods. If you are interested in minimizing the cost of shipping, you should have your broker assess rates on both shipping methods.

34 Shipping your goods by boat can also be an efficient way to receive your goods in the most cost-effective manner. To understand how much it will cost to ship your items, you will need to evaluate the nearest port to your warehouse and also make arrangements for ground transportation. Regardless of whether you choose to ship your items by air or by boat, they will need to be approved and cleared through customs. In order to find the best prices on shipping your items, it is important to make a thorough comparison of costs and evaluate how much you will have to spend on the additional ground transportation to your facility.

35 Determining Costs You will find several different companies that provide full transport of your goods once they have been imported. In order to reduce costs to your business, you should take the time to evaluate each shipping method and all possible freight companies that can handle the import of your goods. Your supplier may be able to recommend certain shipping companies that they have worked with in the past to export goods overseas, or you can consult your customs broker to assist you with selecting the most cost-effective shipping method. If time is also a factor in your decision, you can also evaluate companies based on how quickly they will ship your goods. Tracking You may also want to look into whether or not the shipping company that you use provides tracking information. If you can track your goods as they are being processed and shipped, you will be able to anticipate your delivery and make the arrangements based on the tracking information that you receive. Note: Certain freight companies may provide tracking of products that are not updated frequently. To ensure that you are fully informed of your shipment s progress, you should also discuss how often the shipment is monitored and how quickly tracking information will be provided with any particular shipping method.

36 Consulting a Customs Broker You can expedite the process and ensure that you find the most efficient shipping agency by consulting a customs broker. They will provide you with useful guidance and support throughout the import process, and they are experienced in dealing with particular shipping methods. They will be able to give you advice based on which products that you intend to ship, your geographic location, the supplier that you are using, and the location that the items will be shipped from There are many benefits to using a customs broker to simplify the importing process, and selecting the most efficient shipping method is just one of the many reasons that you should consider consulting a broker before you begin the import process. Shipping Regulations and Guidelines For certain products, there may be strict regulations regarding their shipment to Australia. In particular, the shipment of food stuffs, plants, and animals is highly regulated in Australia, so you will need to consider any regulations in place regarding the specific goods that you wish to import as you are selecting products to ship into the country. There may also be additional costs involved with certain shipping methods, particularly if you want to expedite the process. As with traditional mail, you will pay more to receive the goods in a timely manner, but it may be worth it if you are going to introduce them immediately and have already created a marketing campaign to offer these goods to the public.

37 Chapter 7 Duties and Taxes If you plan to import items into Australia, there are certain applicable fees that will need to be paid by you in order for you to receive clearance to pick up the goods. If you do not hire a customs broker, you will need to file an application and calculate these duties and taxes yourself. If you are importing goods that total less than $1000 in value, you will not be subject to pay duties and taxes. For goods that are valued at more than $1000 per shipment, you will need to pay duties based on the type of products that you are importing, the GST rate on the goods, and a customs application fee. How Duties are calculated Duties are calculated based on the specific type of good that you are importing.

38 Certain industries receive a high duty rate, e.g., automotive, clothing, textiles, or footwear, while other products will receive a much lower duty rate. The total rate that you will pay in duties is calculated based on the total price of the goods that you purchased. The reason that the duty rate is higher for certain industries than others is because more protection is afforded to those industries and thus the duty rate is higher. Free Trade Agreements have recently been established that will allow you to avoid paying certain duties or taxes on specific goods, so it may be beneficial to consult a professional to discuss how much you should pay to import your products. What is the Average Duty Rate? High protection industries like those discussed above often have to pay duties in excess of 15% of the total valuation of the items. Properly evaluating the items value is the basis for determining the exact figure as to how much you will pay in duties. General duty rates are much lower, at around 5% for goods that can be readily purchased in Australia. In an effort to encourage importation of goods that cannot be easily found in Australia, duty rates may be as low as 3% on certain products. GST Goods and Services Tax In addition to duties on your products, you will also need to pay the GST. The Australian GST is the Goods & Services Tax. The GST is10% of the total price paid for the item (providing that the shipment costs more than $1,000). There are few exemptions to this task, although you may be able to avoid paying this if you are importing certain foodstuffs into Australia.

39 Calculating Your Own Duties and Taxes At this point, you might be wondering how you will calculate your own duties and taxes if you choose to do so when you file your application. In order to do this effectively, you should contact the governmental office that handles the importation of goods and services and discuss how much it will cost for you to import these items into Australia. They will be able to accurately estimate the duties that you should pay as well as the GST tax rate if it is applicable. Hiring a Customs Broker If you are unsure of how to pay the correct amount of duties and taxes, a customs broker can complete the process for you. They will have the information that you needto understand exactly how much you are required to pay by law so that you do not have to experience unnecessary wait times while the customs department reviews your application. What to Do if You Calculate Your Duties and Taxes Incorrectly Since you are responsible for paying the applicable fees and filing the application independently, it is easy to make a mistake when you calculate the total cost that should be paid. However, it is essential that you do this correctly. Customs may decide to perform an audit on your import for a period of up to 5 years after the shipment is received.

40 Your shipment may be received, but customs may still decide to review your application after the goods have been picked up. If they find that you have miscalculated your duties and have paid less than what is owed, they will charge you the rate of the unpaid duty and a penalty of not more than 200%. Customs will hold you responsible for the entire payment, even if they only notice that there is an error years later. In order to avoid this process, you should double and triple check your figures or contact a customs broker for assistance. Remember that in addition to the duties and taxes on your shipment, you will also pay a customs application fee in order for your goods to be approved by the customs agency.

41 Chapter 8 The Hidden Costs of Importing Importing goods to Australia is a great way to reduce costs and increase your profits, but there may be some hidden costs in the process that could be the venture less profitable than you would be led to believe. When you look at the price per unit of importing products from China, you would naturally get excited at the opportunity. In order to gain a more full understanding of the other costs involved in importing goods to Australia, the following is a list of some common costs that you might not be aware of.

42 Insurance In order to ensure that your goods make it safely to Australia and ultimately arrive in good condition, you will need to purchase insurance on the shipment. Insurance will typically be calculated based on the number of items that you are importing, and you will need to ensure that the insurance that you purchase covers not only the shipment from the country to Australia, but also the ground transportation until the goods are received. Transportation Costs In addition to the cost of shipping your goods by air or by boat, you will also need to calculate other costs involves with transportation. The cost of transporting the goods to the shipping facility in China or whichever country you choose to import from as well as the transport to your facility from the seaport or airport. Inspecting the Supplier s Facility While many people may decide to skip this step, it is actually very important to establishing a strong relationship with your supplier and ensuring that you choose a quality, reputable company to work with. Many suppliers will even arrange for your transportation to visit their facility, or you could choose to hire a third party agent to inspect the facility for you and report back with what they have learned. Costs involved with Incorrect Shipments When you begin placing orders, you might encounter an issue with your shipments as a result of miscommunication or misunderstandings. This will not only cost you money, but it will cost time.

43 You can avoid this issue by hiring an interpreter to translate your e- mails and all correspondence that you make with your supplier over the Internet or by phone. In addition, you will need to receive a few shipments from your supplier before you can rule out any quality control issues that will need to be resolved. Shipment Delays and Quarantine Costs You may also encounter delays with your shipment that could lead to increased costs for you. For certain products, customs will require that they be quarantined for a period of time before they are cleared to receive the items. The delay of your shipment might lead to increased costs if you are required to delay your marketing strategies or releasing the products on time.

44 Chapter 9 Marketing Your Products After you have received your products, you will need to develop an effective marketing strategy in order to introduce the products to the Australian market. Before you are able to begin selling your products, the marketing plan that you employ will determine whether or not you are able to reach your target market. Pulling from Your Market Research The research that you did on the market before you imported the products will be useful when you are constructing a marketing plan to sell your products. One of the best ways to introduce your new products to your potential buyers is by contacting your current customers and letting them know that the new products are available. Special promotional offers will be particularly effective in.

45 Understanding Customer Preferences To effectively release your new imported products to the right market, you will need to understand your customer s preferences and buying habits so that you can decide the right way to market the new products. If the imported products are something that your current customers are not accustomed to seeing advertised, you may want to take a little bit more time exploring the product and discussing reasons that your customers might need this product. Highlighting the Benefits ofcustomers are much more likely to buy a product if you can accurately convey a reason that they should do so. Regardless of the type of product you are importing, you should be able to address the benefits that a potential customer would receive from making the purchase. Your marketing message should focus almost entirely on benefits instead of features. Customers are often looking for ways that a particular product could help them, benefit them, solve a problem, or give them some form of satisfaction. When you receive your new product line, you can spend some time thinking of the best way to appeal to your customers with this product. When you are able to see it first hand, you may be able to develop better ideas on how to highlight the benefits of the product for the consumer. Determining the Right Price The price of your product will be a huge factor in determining whether or not people will buy it. The success of your marketing depends on how you price the product. If you price it too low, your customers may view it as a low-quality product, but if you price it out of their price range, you will lose customers that would otherwise have made the purchase. You should try to find a good mid-range price for the product. The price should still allow you to cover the total cost of import as well as

46 give you a substantial profit margin, but be careful not to price the product too high otherwise buyers will pass up the opportunity. Marketing the Products Online One of the best ways to get the word out about your new product line is to advertise with various Internet marketing strategies. These strategies are highly effective forgenerating sales, and if you already have an ecommerce store, you can easily add your new product line to your website to jump start your new sales. Generating sales, and if you already have an ecommerce store, you can easily add your new product line to your website to jump start your new sales. SEO Search Engine Optimization If you have a website, an effective marketing technique that you can use online is to optimize your content for keywords that people might use when they search for the product or service that you are offering. Some online shopping carts will also allow you to optimize your product descriptions or other areas of your site to ensure that you are indexed with the search engines as a store that carries that product. Search engine optimization is a cost-effective marketing technique that can help you increase sales in many areas of your business, and when you begin marketing new products, SEO will give you the boost that you need to generate targeted traffic, i.e., visitors that are interested in buying what you have to offer.

47 Social Media Marketing Social media sites provide another free or low-cost marketing method. You can connect with your customers and give them information on your new products with Face book, Twitter, YouTube, or LinkedIn. There are many social media sites that you can choose to use for your business, and this is one of the most effective ways to get the message out to your potential buyers about your new product line. It is very simple to set up and learn how to use thesee social media sites, and you might find that this strategy will be particularly effectivee when you are trying to convey the importance of the products that you are adding to your inventory. In order to make your website more effective and increase your exposure, you should also make sure to add Like and Tweet buttons on your website so that your buyers can share the information about your products on their social media sites. This word of mouth marketing is completely free and extremely effective. Using Auction Sites to Market Your Products If you don t have an online store, you can begin auctioning off your products on sites like ebay. You may think that you have to allow your products to be sold for lesss than they are worth to you on an auction site, but you can actually set a low price so that no one is able to buy one of your products below the price that you want to selll it for.

48 These auction sites generate you automatic exposure and give you a wide market to sell to, but you should also be aware that ebay and other auction-style sites will charge fees. You will need to incorporate these costs into the purchase price. Otherwise, you will diminish your profit margin. Ecommerce Store If you already have a website, you probably have an area where your customers can purchase products online. A website is an extremely effective way to increase the amount of customers that you can reach, and allowing them to buy directly from your site allows you to greatly expand your market. Many people prefer to shop online, and if you are interested in generating more sales, an ecommerce store is an excellent resource. Blog Once you have a website, you should consider setting up a blog. You can blog about your products so that people will know that you are offering them, and you can also increase your rankings on the search engines by making frequent posts on your blog. This will also increase the amount of time that people spend on your site, and providinguseful information about your products will help your customers avoid bouncing from site to site to learn the important facts about a product before they buy it. If you do not have a website set up, you can begin blogging for free.

49 This is a very low-cost way to get the message out about your service offerings and connect with more potential buyers. Reasons to Use Internet Marketing to Connect with Customers If you can effectively utilize these online marketing strategies, you will be able to reach more customers and give them the detailed information that they need to feel confident purchasing your products. Essentially, the more information that you can give your customers on your products, the more likely they are to purchase from you. If you can create effective online marketing strategies, you can also connect with your current customers in a new and meaningful way.

50 Develop Outbound Marketing Strategies In addition to marketing online, you can also utilize some outbound marketing strategies to give out to your customers and spread the word about the new products. Print media is an effective way to let people know that you are now selling new products, and you can create brochures, catalogues, flyers, and other print ads to help your customers learn more about your store. You can also place an ad in the newspaper, book a radio spot, or in some cases, schedule a TV advertisement. All of these are effective ways to get the message out about your product, but they are often much more costly than Internet marketing strategies. If you can use a combination of print media and Internet marketing, you will be able to let more people know about your new offerings and increase your profits.