Importing from China
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Many companies within the U.S. import goods from China. Last year China’s trade surplus reached $422 billion U.S. dollars. Why? Well, China is a low-cost labor country, their raw materials cost about 1/10th of U.S. raw materials, and the Chinese are simply the best designers. Their vision of product design across industries is second to none. That being said, it is not hard to see why many companies choose to import from China. If you run a company that is looking to import goods from China, well, that is not a bad idea at all. But, you should consider doing a few things.
Define your product’s quality benchmark. In order to do this, you and your team need to work on three design aspects. First work on your ideal design and specifications. Then, finalize the flow of work to be carried out on raw materials. Lastly, decide on a benchmark. Know what your ideal quality standards are and your acceptable levels of flaws.
Next, you need to communicate quality standards to the supplier. Define things like protocols and timing. Communicate in person as much as possible. Form that relationship and do not get comfortable doing business only online.
You should also ensure that your product’s quality criteria is fulfilled by the supplier. In other words, compare what they give you to the benchmark that your company has created. A good way to ensure that your product is up to your standards is to implement pre-production audits, in-progress audits, and post-production audits. In these audits, you can sample test and make sure everything is on track.
Lastly, delegate a responsible authority for conducting those quality control audits. It can be you, it can be someone on your team, it can be a hired on experienced professional, or it can be through a contract with a third party. Whichever option you choose, make sure someone is in charge of checking the quality of your products through audits.
Importing from China can have various benefits but highly consider doing these things when doing business with them. You will be in a much better position to succeed if you follow these suggestions.
For more information on importing and exporting stay updated here on our monthly blog.
Foreign Goods Safe? Risky?
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The coronavirus has caused a lot of uncertainty this year across the globe. What is safe? Who is safe? What can we do? What can’t we do? So many questions. So little answers. Because of the uncertainty, consumers are questioning their every move including where they choose to buy from and which goods they choose to buy. CNBC reported that in April the market research firm, Kantar, surveyed 45,000 people across 17 counties. In the study, they found that a third of global consumers are now worried that products imported from outside countries is a safety risk. Countries perceived China and the U.S. as high risk with 47% of them saying that they were far less in favor of buying American and Chinese products. An executive from Kanter also said that people were beginning to favor locally-produced goods even though the price point was higher.
The question is, is there really a risk in foreign goods? According to the CDC and the British government, the risk is low. The CDC says that the virus can survive for a short period of time on some surfaces but is mostly spread via respiratory droplets. It is unlikely that consumers contract the virus from international mail, products, or packaging. Similarly, the British government says that the risk of contraction from imported food and packaging from affected countries is low. They justify their position by arguing that their laws require all exporters to follow the proper controls during the packing and shipping process to ensure good hygiene is met. So, if you are concerned about the safety of foreign goods the CDC and the British government claim that you are safe. The best way to avoid the virus is to wear a mask, limit your time around others, and stay 6 feet away from everybody. For more information on the import and export business, stay updated here on our monthly blog.
US Trade and Investment Policy Updates
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What is DrawbackContact usIt has been a while since we have discussed recent news regarding U.S. trade and investment policies. Things continue to change rapidly, and it is important to understand what is going on for all importers and exporters. The Presidential Administration has released numerous trade proclamations, executive orders, and has signed major legislation with trade implications within the past couple of months. Below are some of the developments you should keep an eye on. At the end of last month, January 21, 2020, the Presidential Administration issued a new executive order on importer of record criteria. This executive order is intended to implement the administration’s policy to prevent the circumvention of U.S. laws and the avoidance of U.S. duties, taxes and fees in e-commerce transactions. On January 29, 2020 the president signed the U.S.-Mexico-Canada Agreement (USMCA) that implemented legislation into law. The USMCA will take effect of the first day of the third month after the last country notifies the others that it has completed all of their domestic procedures for ratification. On January 15, 2020 the United States and China concluded their Phase One Agreement. China has agreed to purchase $200 billion more of U.S. manufactured goods than they did in 2017. The agreement is called the Economic and Trade Agreement Between the United States of America and the People’s Republic of China. On December 13, 2019 the Department of Justice came out with their revised policy regarding voluntary self-disclosures of export control and sanctions violations (VSD Policy). The VSD Policy encourages companies to voluntarily disclose all potentially criminal export control and sanctions violations directly to the Department of Justice. These are only a few of the recent changes that The Administration has made. As an import or export business, it is crucial to stay updated on all of these changes. For more information stay updated on our monthly blog.Improving Import Benefits
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If you are already in the import business and looking to improve your benefits here are some things you might want to consider. The first thing you can do is work with a government-regulated trading program. Doing this will be more than worth the investment because they will help you navigate doing business with countries with strict regulations. Many programs are restrictive and overbearing but they do have many benefits for foreign importers including reduced risk when trading with a government-approved firm. Working with a government-regulated trading program is also a good idea if you want to increase your security. A second thing you can do to improve your import benefits is to hire a third-party risk assessment. A compliance consultant or firm will help you assess risk and evaluate your import logistics. Many import companies have a staff member dedicated to compliance, but the downside is that often times staff members who are familiar with business operations, overlook potential threats. Hiring a third-party will eliminate this risk and best alert you of risks before they arise. The last thing you can do to improve your import benefits is to develop a niche! For example, if you are running a new import business, you might be only importing one product. However, certain forms of the product may sell better than others. Compare the products that cost the most to import based on things like cost per product, customs, and shipping fees, to your most profitable products based on highest demand. Then ask yourself if there is a way to eliminate products that are costly and low-volume sellers. Generally speaking, you want to put all of your efforts towards products that are cheapest to obtain and the ones that bring in the highest revenue. Work with a government-regulated trading program, hire a third-party risk assessment consultant/firm, and develop a niche to improve your import benefits! For more tips on importing reach out to us here at Dutycalc.
Different Players
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Contact us If you are looking to start an import/export business one of the first things you must understand are the different kinds players. Understanding what each of these different players do is essential to running a successful import/export business. Sure, there are importers and exporters but there are many variations on the main theme. Today we will focus on three different players – an export management company (EMC), export trading company (ETC), and import/export merchants. EMC: These guys handle export operations for any domestic company that wants to sell its product overseas but is unsure how to do so. An EMC can do everything from hiring dealers, invoicing your customers, communicating with distributors and representatives, handling advertising and marketing promotions, overseeing marking and packaging, arranging shipping, and much more. These guys basically do it all. EMCs typically specialize by product, foreign market, or both. ETC: While EMCs are taking care of all of the merchandising to sell and focusing on seeking out buyers, an ETC is a bit different. They attack the other side of the trading coin. ETCs usually specialize in identifying what foreign buyers want to spend their money on and then they hunt down domestic sources willing to export. ETCs will often times take title to the good and sometimes they work on a commission basis. Import/Export Merchant: This is somewhat of a generic title that basically identifies a person who is an international entrepreneur that has no specific client base and does not specialize in any one industry or line of products. Instead this person purchases goods directly from a domestic or foreign manufacturer and then packs, ships, and resells the goods. Unlike an EMC, an import/export merchant assumes all risks as well as profits. Understand how each of these players differ and you will be in much better position to make those big business decisions going forward. For more information on the import/export industry, stay tuned on our blog.
Understanding Risks
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Entering the global marketplace is a challenge that requires education, experience, and a driven mindset. Along with these qualities you must understand that this industry comes with risks that could lead to significant repercussions. Before entering the international marketplace, understand these risks and how to avoid them.
One risk that import and export businesses face is unpredictable shipping logistics. When its all said and done, your business success is dependent on whether you can ship goods safely and efficiently. You need to make sure that your product gets from point A to point B on time. You need to account for everything that could possibly go wrong from an employee calling in sick to damage to the cargo. The best way to mitigate this risk is to stay organized, be prepared, and partner with a reliable freight forwarder that will help you ship your goods without a hitch.
Another risk that import and export businesses face is not knowing enough about the current market. For example, did you know that exports contracted 6% last month which narrowed the trade deficit to $13.45 billion? Did you know that this was the second time that exports contracted in the current fiscal year? If not, you need to do more research on the current market. With the trade war causing changes to the global marketplace daily, it is important to consider those changes before you decide to enter the industry.
The last risk that import and export businesses face is running into problems at the border. Customs is one of the biggest, if not the biggest, hurdle that importers and exporters have to face. Customs rules are not uniform throughout the world. To avoid significant slowdowns at international customs, again, do your research or hire experts in customs law and trade compliance to help you navigate this area of the business.
Bottom line is that the import and export business is one with opportunity but is also one that comes with risks. To find success in this industry understand all of the risks, stay organized, prepare for the worst, and know how to handle logistics. If you have all of these qualities, you will be that much closer to finding success in the import and export industry.
Starting Your Import Export Business
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Starting your own business is hard. Starting your own import/export business is even harder. There is much more to understand and things can go really bad really fast if you are not careful. That being said, if you have the experience, education, grit, and drive to take on this industry you can be successful. If you are looking to get into the import/export industry by starting your own business here are a few pointers that we recommend you follow.
You need a strong online presence. Without an online presence you will not be able to have a networked import/export business. The goal of this is to balance the flow of communications, sell products online, and most importantly build your customer base to drive profits for your international business. Having a professional blog on your website will allow you to have a continuous flow of engaging communications with your clients, something that most customers want in brand new companies.
Along with an online presence you need to find out what you want to sell. This includes understanding which markets are good to enter. We recommend that you find a product or industry that you are passionate about and that you think could sell in international markets. Looking for which markets to enter is where your trend-spotting skills come in to play. In general, the best products are ones that are just starting to become popular or show some promise to being so in the future. Do your research and think before you begin because finding the right product and the right market is probably the biggest decision you will make.
When you have your online presence and product/industry decided, focus on your logistics. Logistics is the most complex aspect of importing and exporting. Think about it, you have to take a product created somewhere and sell it somewhere else. For example, how do the grapes from the vineyard in South Africa make it to the wine glasses of drinkers in California? Every successful business has a strong logistics team, plan, and strategy that makes the flow very easy for all employees. When you get your logistics down to a science, you will be ready to hit the ground running.
Building a strong online presence, figuring out what to sell and where, and getting logistics down is all very important in this industry. However, these are only three of the many aspects that make a successful import/export business. Bottom line is that this industry is a complex system that requires nothing but hard work and determination.
For more recommendations or for more general information on the import/export industry give us a call or browse our website.
Partner with DutyCalc
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When it comes to dealing with money, it is important to work with reliable and trustworthy partners. Whether you’re running a small business or a Fortune 500 company, you don’t want to run the risk of losing money because of a bad partnership. Good financial partnerships are critical especially for companies in the import/export industry because of all the details regarding drawback. If you and your business are in the import/export industry and in need of a dependable partner to help with drawback, look no further than DutyCalc. Here are 3 of the most important factors that make DutyCalc the best partners for importers and exporters.
DutyCalc has experience. Collectively, the DutyCalc team has over 4 decades of experience in duty drawback. Part of DutyCalc’s experience in duty drawback has come from partnerships with some of the biggest companies you can think of. Companies like FedEx, Fender, and TaylorMade are all current or previous clients of DutyCalc. We understand how to manage duty drawback for large companies, and we understand all of the necessary steps in the process based on our experience. Put your trust in us as we have the knowledge of how to be successful.
DutyCalc has a proven track record. Whether it was the full service drawback or the software system, Drawback.NET, we have helped clients from around the country claim drawback without fail. We help clients claim up to 99% of duty drawback! DutyCalc systems are efficient and cut down processing times significantly. Our process works and will be worth the investment. Refer to our Testimonials to see our successful track record with our clients.
Last but not least, partner with DutyCalc because we always put customers first. Providing the best customer service is our number one goal so, as a client, understand that your needs come first. If you don’t understand part of the drawback process, we’ll walk you through every step. If you’re running into technical problems with Drawback.NET, call our support team and they won’t hang up until your problem is fixed. Happy customers are what drives our business, so making them happy is our number one priority. By partnering with DutyCalc, you and your needs will always come first.
For those in the import/export industry, partner with DutyCalc as we are partners that you can rely on and trust. We have experience with some of the largest companies on Earth, we have a proven track record, and you will always get great customer service. For more information on what DutyCalc has to offer, give us a call! We look forward to working with you.
Software Service
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The Section 301 trade war has been a long and unpredictable process. Some new tariffs are already being enforced while some are still to come depending on what the U.S. and China agree upon. Though there has not been a final agreement between the two countries, do not wait to file for the available drawback on Section 301 duties. Dutycalc has been a valuable resource to clients as their services have helped claim 99% of Section 301 duties from China thus far.
The three services Dutycalc offers are a full service drawback, a process & file only service, and the software service. Out of these three services, Dutycalc has seen that the software service has been one of the greatest successes. The software service, Drawback.NET, allows clients to easily generate claims on their own. The software allows for hands on filing and complete operational control on a personal/company PC. If you do not need or want help filing, the software system is your best option. It is user friendly and has been used throughout the country by various Fortune 500 companies. This software system has seen nothing but success as not a single Dutycalc client has failed a Customs audit.
The software service is great for anyone filing for drawback on their own but what makes the Dutycalc brand even more valuable to our clients is the partnership. The software system is designed to allow you, our clients, to do everything drawback related on your own. However, if a question arises with the system or if there is a question regarding updated news on the Section 301 trade war, our representatives are only one phone call or email away. Our staff at Dutycalc understands that questions and problems will arise during the ongoing battle between the U.S and China. Because of this, every client who ever purchased any one of our services is promised access to expert knowledge from the Dutycalc staff. Simply reach out and we will gladly assist you.
Work with Dutycalc if you are looking for great services and an even better partnership. Give us a call or visit our website for more information.
Stalled Agreement
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Where the U.S. and China stand in the trade war is currently unknown. There were Washington
insiders claiming that a trade war deal was around the corner, all to find out that the deadline has
been pushed back. Last month Chinese officials proposed a push back of 90 days on increased
tariffs on Chinese imports. Though China is showing tremendous respect and actively trying to
come to an agreement with the U.S., a 60 day push back is all the U.S. granted. The two
presidents were scheduled to hold a meeting before the initial March deadline in Florida, both
parties hoping to strike a deal. This meeting never happened. Though we do not currently know
where both countries are in the process of coming to an agreement, we can be certain of one
thing: both countries still do no see eye to eye.
The topic that is stalling this agreement is the tech industry. China wants the U.S. to be more
flexible with products in tech industries like telecommunications systems. The U.S. wants China
to enforce stricter policies on intellectual property. The so-called tariff war is now shifting it’s
focus and becoming specifically a tech war. According to Michael Pillsbury, the American
Director of the Center on Chinese Strategy at the Hudson Institute, “Chinese demands have yet
to be addressed. They want to break into the U.S. e-commerce payments system, and have it
blessed by the U.S. side. And the U.S wants the Chinese to promise not to retaliate if there are
new tariffs. I cannot imagine China agreeing to this.” Because the U.S. and China still do not see
eye to eye, this is stalling the two countries to coming to a deal.
A deal was close to being agreed upon just a month ago, but now neither side seems to think an
impasse on disagreements is likely. More updates on the trade war will be posted here next
month.
