Imports and Exports: 5 Factors for Your Small Business

Imports and Exports: 5 Factors for Your Small Business

Inflation is an impact on the retail sector, but commerce is still booming. In the US E-commerce sales exceeded $1 trillion to the highest level for the first time since 2022 even though there was a decline in real earnings over the last year. The National Retail Federation (NRF)’s chief economist Jack Kleinhenz anticipates that consumers continue spending even despite the decrease in real income.

However, despite positive market conditions, managing the shipping of goods across borders is a more difficult issue than we anticipated. The supply chain remains stressed, and the rise in inflation has increased the cost of shipping and transportation as US imports fell in 2022 to their lowest since the peak of the epidemic.

However, there are five factors you need to be aware of as a small-business owner to manage imports and exports in the current global economic environment.

1. Be familiar with the customs regulations

It’s essential to study the rules of customs before you decide which products to sell. Different countries have different rates and restrictions on certain kinds of imported goods So you’ll need to know the regulations for each country to which you are shipping items.

It is possible that you require a license to import certain kinds of products, or specific authorization from various government departments, like the Department of Health. The value of an item can affect the price also. For instance, in the US it is not necessary to pay tax on customs products valued at less than $800. If it’s less than $2,500 in value and you don’t have to apply for “formal entry” which means you don’t have to pay the expense of additional documentation and fees such as customs bonds.

There may also be laws that govern the countries you’re legally allowed to import from. The US is one example. It has strict rules for imports from nations that engage in criminal activities including Ghana or Ghana and the Ivory Coast, which are in high danger of aiding modern slavery. If you are importing from China it is necessary to prove that the products originate directly from the Uyghur region in order to be compliant in accordance with The Uyghur Forced Labor Prevention Act.

It is essential to know as much as you can about the customs procedure to ensure that you don’t face any issues regarding your shipment. “If you fail to supply the proper documentation and follow the proper procedures, you could be at risk of having your items checked and/or seized, which can will result in delays and substantial costs.” According to Agatha Aviso, retail software expert of Fit Small Business.

Also read: 10 Ways Production Tracking Software Can Prevent Supply Chain Delays

2. Establish relationships with freight forwarders and customs brokers.

It can be difficult to handle imports and exports on your own when you’re a small-scale retailer that doesn’t have a full-time shipping specialist on the payroll. It’s why it’s beneficial to establish connections with a partner who can assist you with the processes and paperwork involved with the import process, and also ensure that your products are transported in a timely manner and cleared for customs.

For instance, Customs brokers are experts in the field of export and import law and are able to provide legal advice regarding shipment logistics and other procedures.

Freight forwarders can help you organize all-inclusive transport. When your products reach the point of arrival then they’ll require transportation into the storage facility. This could be a major problem for SMBs that don’t have the resources of a fleet of trucks available. Freight forwarders are the last mile of transportation.

Forwarders for freight online such as Ship4wd can assist you in many aspects of the worldwide shipping processes, including managing customs bureaucracies for you, arranging insurance for cargo, and assisting your small-sized business to gain a foothold over larger businesses with more competitive prices. Ship4wd is a particular service that is geared towards SMBs exclusively, offering the ability to pay with cash flow-friendly options including credit cards and direct debit, as well as a 90-day payment window.

3. Understand landed cost

There are numerous charges and taxes to be considered when importing goods, and shipping costs, product cost tax, customs duties as well as insurance brokers, customs and freight forwarders, as well as other things. The sum is known by the term “landed cost” which is the total cost to deliver the item to the customer.

“Many online retailers fall into the trap of thinking that the cost of goods sold (COGS), as well as shipping charges, are the only expenses that you have to consider when setting the price for the product you sell,” writes Cathy Ostlie who is a Content writer for ShipMonk. “Landed cost is the sum of all these costs and also any additional costs that are paid by the seller after the item has been sold. This makes landed cost a more precise number than costs of goods sold (COGS) to determine your price list.”

Country of Origin could influence the customs duties and other charges you’ll need to pay. For instance an example, a shipment that enters the US with a value of more than $2,500 will require fees and an insurance policy called a surety bond. It is also important to consider various options for transportation, including air freight, sea freight, or courier services that come with different costs. Incorrect calculations could lead to incorrect profit figures, which will in turn throw away the entire profit calculation.

4. Do not forget to double-check the documentation

Incomplete or incorrect paperwork and inadequate labeling or valuation could create the possibility that your product will be taken into custody for examination or at the very least destroyed or auctioned off. So, it’s crucial to ensure that your products are properly classified according to the appropriate HS codes and meet specific labeling requirements, including the country source, security information, or other specific information about the product.

Transportation management platforms like Cargoflip will help make sure that your documents are complete and accurate with the help of digitizing your process. With a software program, it is less likely that you will miss a crucial document or fail to fill in a mandatory field.

Also read: How to Make Sure Your Shipments Arrive in One Piece

5. Be sure to protect your products

Packaging plays a crucial part in the import of retail products. A well-designed packaging system can help ensure your items arrive in good order However, unsatisfactory packaging or packaging that appears as if it’s been damaged or altered could cause suspicion among customs officers. If your items aren’t wrapped in a secure manner, there is a possibility of being confiscated to be examined.

In addition, you’ll require adequate insurance. A lot of retailers commit the error of thinking that shipping firms offer insurance coverage, however, insurance for lost damaged, stolen, or lost products will be the sole responsibility of the carrier. Numerous shipping companies and freight forwarders provide insurance for cargo but you’ll need to inquire about the coverage. It’s not a given.

The insurance company you have in place for your business could offer cargo insurance or you could select an expert in this kind of insurance. Companies such as HDI Global provide marine and cargo insurance and other kinds of insurance plans.

Final word

Importing and exporting can be a challenge, with many challenges, particularly for retail small businesses that have smaller staff and limited resources. But, thorough study and the use of the right tools and partners can make the process easy and efficient, so that you can concentrate on expanding your small-scale company.