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How to Import into the USA

Basic Business Practices

Have fun Apply common sense Define what you want to be Is importing a different business? Can I sell imported products at a

profit? Keep records. Count everything Expect to keep different hours. Be

Flexible

IMPORTING IS DIFFERENT Logistics Change Effort Time Travel Money Payments

Commitment Culture Buyer Needs Channels of Distribution Regulations Time Zones Language

OR IS IT?

Still need to sell product procured abroad at a profit

Do not discount domestic capabilities

Get quotes from domestic producers

Compare. Add the time, effort, uncertainty and relative lack of recourse of foreign sourced goods

Do I need license to import

What is an HS Number and How do I get one

Harmonized Tariff Systems http://dataweb.usitc.gov/ http://dataweb.usitc.gov/scripts/

tariff2001.asp

WHY IMPORT To buy directly from the source abroad To acquire products not manufactured in own

country Cost benefits , cost quality considerations Made to order flexibility Take advantages of other countries export

promotions

To expand, enhance your business line To offset export operation To travel abroad Minimize taxes, travel abroad To make a profit Establish business credibility

Basics business practices Is it legal Knowledge of the business Knowledge of the Import Process Business etiquette as applied to source

country Accept verbal commitments as stated

in a written fully executed contract (in English)

Trust is nice but ………... Be flexible Use professionals

More ………...

Keep it simple Know your

market Define limitations Make a cold

financial assessment

Is it worth it? Has it been worth

it? Why pay?

Sourcing your product I have the ideal product/service I will be able to sell it at a PROFIT. I know that someone somewhere has

sourced a product similar to mine at a lower price and that someone is selling it at a higher price. I just need to find the source

Do not wait for perfection. Settle for pass

Always seek U.S. sources for comparison

WHERE TO SOURCE YOUR PRODUCT

Embassies/ Consulates Commercial Attaches Associations AMCHAMS ASK THE SELLERS alibaba.com taiwantrade.com

proeastwest.com tradeline.com.br asiansources.com eurotradeleads.com busytrade.com buysellex.com cometotrade.com globalspec,.com

MORE WEBSITES

imex.com microline.com trade-circuit.cov vendorbase.comlabl.com ectrade.com europages.com 5five.tv/tradeleads.htm

Sourcing, defining your needs

Define your needs Have them in

writing Are they reasonable Is there a mutually

beneficial relationship between yours and your potential supplier needs.

Sourcing, on business relations Define relationship Recognize imports = different culture Quality issues Production issues Logistical issues Payment concerns Be prepared to do business Have adequate working capital

Import ProductsEasy to Import: Crafts/Artwork/Glass Gems/Semi-precious Household appliances Tools/Sporting goods Musical instruments Leather goods Stationery / Paper goods

Difficult: Drugs/Spirits Aerospace/Radioactive Animal live Used merchandise Foods/Cosmetics Chemicals/Combustibles Weapons/Explosives Vehicles

Commonly Prohibited Embargoed Countries ustreas.gov/ofac National treasures, archeological finds Material considered pornographic Food or products raised in infected countries

(foot & mouth; mad cow)

Products that violate intellectual or industrial right laws

Products from endangered species Drugs not approved by FDA Other

DO I NEED A LICENSE TO IMPORT GOODS

U.S. Customs Service does not require an import license for goods brought into the United States. However, other agencies may require a license or certification.

FDA, DOE, DOJ, EPA, , Textiles, Federal Trade Commission, Wildlife Dep. Of Interior

Due diligence

Check your potential supplier Talk to competitors Distributors Equivalent BBB Check with the US Embassy Inquire with friends and

acquaintances Check with Intl. Clubs (Moose, Elk,

Lions, Rotary, Masons & other fauna)

More on due diligence

Secure suppliers start small Common sense vs genius Federal, state, county and city

agencies Check, recheck your assumptions Remember cultural, linguistics and

geographical differences Use plain, simple, idiom-free

language.

How Do I Get Started?

Select a product or service: Apply common sense Stick with what you know Use your cultural knowledge Perform marketing research Niche product, in niche market Management Commitment

WHAT AM I?

IMPORT TRADING COMPANY? (Manufacturing Rep)

IMPORT MANAGEMENT? (Wholesaler/Distributor)

MANUFACTURER? – Value Added Reseller (Inputs transformed into goods)

RETAILER?

Import Trading:Primary Activity: Sell products to domestic buyers

Take title to goods Buy product from the manufacturer & resell

Arrange for shipping and payment

Advantages: You determine price; can make more money

Long term relationship with both manufacturer and foreign buyer

Overall, have more control in the marketplace Disadvantages: More liability

IMPORT MANAGEMENT Primary Activity: Sell foreign goods to domestic buyers

Don’t take title, put buyer & manufacturer together

Receive Commission Shipping arranged by manufacturer Payment arranged by manufacturer

Advantage: Less liability

Disadvantages: Manufacturer could determine price

Manufacturer will try to terminate relationship Less control

Once a product is selected.. What do we want (as company) to gain

from importing Is importing consistent with company

goals? What demands will importing place on

key resources? How will they be met Are the expected benefits worth the

costs or should the resources better used in new domestic business?

Perform Market Research Questions To Ask:

Manufactured in country? Is other competition there? What price is product being sold at? Is there cultural applicability? Product meet USA standards?

Can it be adapted to standards? If so, $ Restrictions or regulations? What are the different markets for your

products? Who are the distributors? Who are the final consumers

How To Perform Marketing Research

TALK TO YOUR COMPETITORS WWW.STATS-USA.GOV USE ASSOCIATION USE INTERNET

Call End Users Visit the BRC!!! http://dataweb.usitc.gov USE OTHER COUNTRIES RESEARCH!!! I.E., http://www.atn-riae.agr.ca

How do I get an HTS Number

1. Harmonized Tariff # Search http://www.census.gov/foreign-trade/schedules/b/index.html

2. Entire HTS usitc.gov/tata/hts/bychapter/index.htm

3. http://rulings.customs.gov/

Your Partners Your clients Your procurement source Custom Broker Freight Forwarder International Banker Attorney Custom Lawyer Certified Public Accountant

Freight Forwarder

They move freight internationally Don’t confuse with a

custom broker

Information you need: Weight of shipment Dimensions of shipment Where it is being

shipped from Where it is being

shipped to Collect or prepaid

CUSTOM BROKER

Efficiently & legally obtain clearance through customs

Incoterms 2000

EXW: City, State, Country

CIF CFR FOB DDP

International

Commercial

Terms

Pricing Products Cost from foreign manufacturer Freight /Insurance Duty / Custom Broker Other Costs /Indirect Costs Profit Distributor mark-up Retail mark-up Cost comparison – Competition Price Common sense test

Documentation SLI: Shippers Import Declaration/Bill of

Lading/Carrier Certificate naming consignee

Commercial Invoice from Exporter, showing value & describing merchandise

Packing List Certificate of Origin Entry Manifest Customs Form 7533 or

Entry Immediate Delivery (Customs Form 3461)

Rely on your custom broker

Contact The Manufacturer

Obtain exclusivity Right to commercialize product Check USPTO Brochures Samples Warranties – Guaranties Marketing Allocation

How Will You Pay The Manufacturer?

Terms Letter of Credit Wire Transfer Payment in advance

Purchase OrderProvide Information For Seller to Make a Sales Decision

Your Company Name Buyers Name Date Reference Number Quantity Description Unit Price Extended Price

Currency Weight of Product Dimensions of Product Packed Country of Origin Point of Delivery Payment Terms Request Valid For

Intellectual Property – Contractual Obligations Trademarks – Who owns what Exclusive Distribution Arrangements Warranties - Replacements Shared Marketing Costs Royalties

Getting Paid

USD Dollars Do not sell on open terms or

consignment Credit Card Industry Payment Terms Checks PAYPAL..COM ESCROW.COM

Information

Commercial Attaches Business Associations (I.e,

Korean/America, Hungarian American, etc)

AMCHAM US Embassy Web - Thousands of organizations Friends, acquaintances, PXs,

churches, etc.

More

Go to fairs, network Keep proper records When is best to use a wholesaler

rather than the source Ask your competitors International yellow pages Settle on pass not A++

A few websites

www.citd.org/trade_info/index.cfm calcitd.ning.com thomasregister.com http://www.cbp.gov/ US Customs http://global.broad.msu.edu/ibc/

On contracts, trademarks, distribution agreements, pro forma invoices, and …. Understand the terms as understood

by others Contracts should always be in

English Do not agree to something you do

not fully understand Leverage available resources Take your time Persevere

BUSINESS PLAN - FIRST DRAFT

Primary objective is to develop a Draft

Will indicate what next steps to take Quick & dirty Overall guide Reality test

Draft Business Plan must address

Product selection and modifications if any. What source countries are targeted For each product what is the basic

costumer profile What marketing and channels What special challenges to each and how

to overcome them How will the products’ import sales price

be determined What specific operational steps must be

taken and

Customer Service

You must service your accounts!!!

Customer Service Academy

Q & A

Riverside CITD Robert Corona

(951) 571 -6443 (909) 486-3344 www.citd.org