4-Small-Businesses.co.uk

Making Important Checks

Here are three main checks to make before you come to any agreement with the manufacturer.

1) Make sure you are allowed to import their products

Ring the Department of Trade and Industry (DTI) who will tell you whether that type of product carries import restrictions (because of import quotas for example, or because of laws regarding foodstuffs).

2) investigate the suitability of the manufacturer and country

Attempt to find out if your potential trading partner is both ethical and financially stable by making enquiries via banks, business consultants, and credit agencies. Also investigate the country's trading practices, and whether any deal is likely to be affected by economic or political matters such as a dock strike or civil war.

3) Calculate transport and other costs

You need to work out the costs you will incur by the time the product arrives in Britain. This includes the wholesale price, import duty and sales tax, transport costs (including insurance), plus your own costs (phone, postage, premises, banking, travel, etc.).

Customs and Excise will give you details on import duties, and a freight carrier will give you the transport costs. Also find out how long the goods will take to arrive - you can start contacting customers once you have a delivery date.

When you've added up the costs, add on your profit margin to get a final UK selling price. As an agent you'll receive around five to ten per cent of the value of the order, but as a principal you can set your own price and profits.

This will depend on the market: it may be as little as five per cent or, in the case of UK importers of cheap consumer goods from the Far East, could be in excess of 1000 per cent.

Some imports and exports command profit mark-ups in excess of 1000 %

Some of the above costs and checks won't apply if you intend to operate as an agent rather than a principal, but it still pays to know as much as you can about your trading partner and their product.

Don't be afraid to contact official agencies such as the DTI, customs office and your local Chamber of Commerce. They are there to inform you on official matters, such as whether goods can be imported or exported without a licence, and the procedure for paying import duty.

People are often scared of import/export because they believe the customs procedure is too complex, but this generally isn't true, and free advice can be obtained when necessary.

Once you have worked out what forms are needed and how to fill them in, you will probably find the next forms may be copied, simply changing the quantities and dates.



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What important checks need to be made before you start to import or export goods.