The Essential Guide to Importing for First Timers
If you’re looking into how to import items to the UK, it’s likely that you’re feeling overwhelmed by the process. There’s a lot for would-be importers to consider, from sourcing quality items to what happens when the goods arrive in the UK, and the various options available can make it difficult to identify the best way forward. This guide will walk you through importing step-by-step, so you can feel more confident when making the decisions that will affect your importing experience and could ultimately make or break your business.
#1 Why import?
There are several reasons you might be considering importing goods from another country. Often cost is the bottom line, but you might also need to import something specific that you can’t get in the UK. Whether you’re importing something for personal use, starting a business selling imported goods, or you need a certain item for use in your business or company, importing makes sense if you can get the item for less. For example, a popular business model is to simply import cheap items from China, then sell on for a profit through online shops such as eBay and Amazon. Others might import items to stock an actual shop or business, or need to import items that are part of a manufacturing process for another product. Whatever the reason, careful research is the key to success.
#2 Doing your research
If you know exactly what product you need to import then you can skip this stage and go straight to sourcing. However, if you’re looking to build a business selling or utilising imported goods then you’ll need to put plenty of thought into what items to invest in, to avoid making expensive mistakes. One top tip for a first timer is to start small, both in terms of product and order size. Choosing small, easy to ship items will keep those costs lower. And while shipping in bulk is most cost-effective, starting with smaller sample batches will reduce risk until you’re confident in your chosen product and supplier.
#3 Sourcing your product
There are several ways to source products to import. The first is using a global trade website like Alibaba.com. This trading platform connects suppliers with buyers, offers free Trade Assurance protection and is a popular low-risk solution for novice importers. Another option is to use a product sourcing service, such as a particular product sourcing agent or a freight forwarder (someone who organises the movement of goods internationally) that offers this as an additional service. Alternatively, the most labour intensive method is to source the products yourself – either online or in person, visiting trade fairs or factories.
If you have a wide choice of possible suppliers then it’s wise to negotiate initial small samples from a shortlist, so that you can compare the products and service before placing a large order. While many suppliers will state high volume minimum orders, they’re often willing to waive this to win your ongoing business. Be wary of any supplier who refuses!
#4 How to ship
Once you’ve decided on your cargo, you’ll have some important and possibly difficult decisions to make about how to ship it. Shipping by sea freight is usually favoured as the most cost-effective option, being considerably cheaper than air freight. However, shipping by air is much quicker and may be preferable for the speedy receipt of small, easy to ship samples or time sensitive items.
Next, you’ll need to consider the packaging options given by your supplier, and the type and size of container you’ll need to move the cargo in. For example, some carriers will only accept Full Container Load (FCL) shipments. Others will accept Less than Full Container Loads (LCL) but your cargo may take longer to reach you as it waits for another suitable shipment to share the container. Remember, certain types of cargo need to be transported in a specialist type of container.
It’s possible to research and organise every aspect of shipping yourself – i.e. appointing a shipping line and arranging the necessary paperwork – but most individuals and businesses find it much easier to outsource this to a freight forwarder or shipping agent. Many suppliers will have existing relationships with forwarders, so you have the choice to use the network that they already have in place – just ensure that you know exactly what’s included in your shipping quote so you can accurately compare your options.
#5 Shipping costs and terms
It’s crucial that you have a clear idea of the total cost of importing your items, as well as knowing exactly what the shipping terms (the Incoterms) are – FOB (Free On Board), CIF (Cost, Insurance and Freight) and EXW (Ex Works) are the three main shipping terms, with FOB being the one most widely recommended for keeping costs transparent and under control. You need to know who holds responsibility for the items at every point of movement, how long the items will take to reach you/the point of delivery, the total shipping cost per unit, when you need to make payment/s (and to who), and what your responsibilities are in terms of insurance, duty and VAT, and Customs clearance. Be aware that some types of items will also be subject to import regulations and/or restrictions.
#6 Tracking your goods
Ensuring you’ve got some way of tracking the progress of your goods is important for your peace of mind, especially if you’re nervous about importing for the first time and are using an unknown supplier. It also means that you can time other related tasks accordingly – for example, marketing and taking orders – and keep any other involved agencies and parties informed. Most reputable suppliers, global trade websites, freight forwarders, couriers and shipping agents will have a reliable way to track your cargo as it moves across the globe. However, if you’re importing goods to sell, best practice would be not to take any orders until you physically have possession of the goods. Disappointing customers with late deliveries is one quick way to the failure of a fledgeling business.
#7 On arrival
You’ll need a plan in place for what happens to your goods on arrival to the UK, including the clearance of Customs. Some suppliers may offer a ‘door to door’ service for shipping. Or, if you’re going the DIY route with your arrangements you will have to consider how you’re going to move your goods from the port of discharge. This could mean hiring warehouse storage space and/or a haulier/courier service, using a distribution/delivery service or even collecting the goods in person. In terms of your HMRC responsibilities, you will need a commodity code to classify your goods, plus an EORI number when importing from a non-EU country. If you’re using a forwarder or another agent to make Customs declarations on your behalf, they will need this information.
#8 Keep it simple
Importing can be a complicated and daunting process, especially if there are unexpected issues along the way. A convenient solution for a first-time importer is to use a reputable freight forwarder to take the hassle and stress out of moving goods internationally. Many freight forwarders offer freight forwarding by ship, air and road, with a number of optional wrap-around services including product sourcing and inspection, and storage and distribution, some even offer a complete door-to-door shipping service. With experts on-hand to guide you through each stage of importing and help you decide on the best shipping solutions, freight forwarders can take much of the strain for you, they’ll even deal with the relevant paperwork.
If you’re new to importing, then it will undoubtedly feel like there’s a lot to learn. Letting a freight forwarder simplify all aspects of importing will allow you to focus on the business of what happens to the goods once you have them in the UK.