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

• 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

– 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

• 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

• Asiawww.alibaba.com

www.hktdc.com

www.globalsources.com

www.ebigchina.com

• North Americawww.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 $ 39,800

International Freight: $ 0.09 $ 3,415

Misc. Labor Costs (palletization, etc.) $ -  

Domestic Freight: $ - $ -

Domestic Fuel Surcharges: $ - $ -

H.S. Code  

Duty Rate 1 - % 3.00%

Duty Rate 1 - $ $ 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