Our easy to understand quick guide to importing and exporting. We off you 10 top tips for starting your own import export business.
There are three main questions to be answered about freight forwarders:
What is the role of a freight forwarder?
How do I select a freight forwarder?
How do I find a freight forwarder?
I ran my own freight forwarding company for many years so I am well qualified to answer all three of these questions.
What is the role of a Freight Forwarder?
When you’re exporting, you must acquire the knowledge of how to obtain such things as a competitive freight rate, book freight for shipping, complete export documentation such as an export entry, Certificates of Origin, Bills of Lading and the list goes on and on.
Some companies and individual traders have this depth of knowledge and go it alone, most however, opt for the services of a freight forwarder. A freight forwarder will undertake the above tasks and also offer other services such as export packing, warehousing and local transport. They become your unpaid adviser.
For example, you can call them and ask them:
When is the next vessel sailing for your destination.
How much is it to ship a FCL to Shanghai.
What is the air freight rate for 40 kilos to Hong Kong and so on.
The advantage of using a freight forwarder is they are a one stop shop.
One phone call or email to your freight forwarder answers all your questions.
You get a lot of free advice as you only pay them when they undertake an export consignment for you.
The big disadvantage of completely relying on a freight forwarder is that SOME freight forwarders can take advantage of the fact that you have little or no knowledge of exporting and charge you accordingly.
I stress only SOME as the vast majority of forwarders are very professional and eager to help you. It goes without saying that a forwarder has to make an honest profit, which is very different to ripping you off.
My advise to you is by all means use the services of a freight forwarder BUT understand export procedures, have a working knowledge of freight rate structures and the real cost of producing export documentation. Once you know these facts you can work successfully with your freight forwarder.
Here’s a real life example of a exporter that joined our training course, who handed over all their exports to a freight forwarder.
The exporter had little or no knowledge of freight rates and left it up to the forwarder to arrange their air freight for them. This particular forwarder was aware of the exporters lack of knowledge and as a result charged £7.06 per Kilo while a commercial rate was £2.60 per kilo!
I give this example to emphasise the point that you should have a working knowledge of exporting and not to insinuate that all freight forwarders will overcharge the innocent. As I mentioned above I was a successful freight forwarder for many years without overcharging my clients. All my colleagues in the freight forwarding business gave a good service for a fair price.
How do I select a Freight Forwarder?
I have a very simple rule. Make sure that the freight forwarder can give you the service YOU require not what they WANT to give you.
Again, here is an example of what I mean.
On questioning a freight forwarder on their services, they tell you how strong they are in sea and airfreight to South America and Australia and that they can offer you very competitive rates to these destinations. However if your market is the Middle East, this is not a well fitting partnership.
Before discussing business with a freight forwarder, you should make out what a WISH LIST. A wish list is a list showing the level of service YOU require from a freight forwarder. Here is an example:
Can you offer UK collection from my local suppliers (here name your suppliers address)? If so please quote.
Can you offer competitive air freight rates f rom UK to (your destination)? If so please quote up to 1000kgs.
Can you offer competitive rates FCL/LCL rates to (your destination)? If so please quote.
Please quote to prepare the following documentation: Bills of Lading, Certificates of Origin etc.
Can you offer local warehousing and export packing? Please quote.
Please name the contact person responsible for servicing my account.
What are your terms of payment?
I require a copy of your trading terms and conditions.
The above is just indicative of questions you should ask in order to get the service YOU require for your particular exports.
How do I find a Freight Forwarder?
This is an easy answer thanks to all those lovely search engines available.
Just type in “freight forwarding in (here mention you town or city)” and you will be swamped with local contacts.
You can also check the BIFA website (www.bifa.org) and they will supply you with a list of all Freight Forwarders who are members of BIFA .
If you want to go it alone or use the services of a freight forwarder, either way you need to understand the business
Our on line International Trade course will explain to you in detail and all you have to know about importing and exporting to trade successfully internationally.
Methods of Payment
Sea / Air freight rates
We will end with a question and answer session and hope this will give you some hints and tips and share some of the pitfalls many importers and exporters face.
The webinar is due to start at 11am London time and will last for approximately 1 hour 15 minutes.
I always dreamed of being my own boss . I wanted to source goods overseas and sell them to wholesalers and retailers in the UK. I saw many opportunities on my travels to bring unique goods into the UK and sell them, in particular precious stones.
I couldn’t afford to leave my full time employment and devote myself to my own business as like us all, I had financial commitments. I did not have any knowledge of International trade so my first move was to get proper training.
I contacted many training companies who offered international trade courses but in the end I decided to go with ABTS Training services because they offered an Online course suited for beginners, so I was able to study in my own time.
I spoke to Alan Bracken of ABTS about my ambitions and current situation.
His advice was invaluable and gave me confidence to pursue my dream. I remained in full time employment and enrolled in the Online International Trade course. I studied at my own pace and in my own time.
Once I was confident that I understood what was involved in International Trade and after many phone calls to Alan, I took the plunge and set up a limited company.
As my funds were limited I relied heavily on the knowledge I gained from the ABTS International Trade course and decided not to import direct from suppliers but to test the market and trade as a commission agent.
After analysing several offers for an agency, I decided to accept an agency for uncut emeralds from a company and to represent them in the UK as their commission agent.
I made contact with many precious stone wholesalers in the UK. As the ABTS International Trade course advised me, I used the comments I received from wholesalers to refine my presentation and I am now very confident when I meet perspective customers.
I am now working with several wholesalers in the UK and high value orders are in the pipeline. It’s hard work as I am still working full time but it is well worth the effort. I am looking forward to the day I can become my own boss full time, which is now, not too far away.
The online course gave me the knowledge and confidence I need to take the plunge and start up my own business. Thank you Alan and ABTS Training Services.
Miss. Lina Cardona
At ABTS Taining we always teach our International Trade students the mantra “BE PROACTIVE, NOT REACTIVE”. This is more important than it sounds. Let me give you an example:
Recently we received an email from someone in Shanghai, China. They visited our website contacted us asking if we can help.
This person had bought a set of four prints in London and had them sent to their home in Shanghai by air. The courier told them that their charge included delivery to their Shanghai home address. However, they received a email from Chinese customs demanding import duty of 10 per cent on the first print and 17 per cent import duty on the three other prints. They had wrongly assumed that if the courier was charging them to deliver the prints to my home it would include any import duty.
If they had known that they would have to pay extra import duty in Shanghai they would never have bought the prints in London.
We advised them to declare the four prints as a set (which they were) as Chinese customs will allow one item (a set) of personal effects into China at 10 per cent duty.
Now this is where being Proactive and not Reactive comes into play.
- This person should have asked their courier if their charges included delivery to home address Shanghai DUTY INCLUDED OR DUTY EXCLUDED.
- They should have looked up Import duty on prints and personal allowance BEFORE they bought the prints in order to get a accurate TOTAL price to be paid or to save time, ask the UK courier to undertake this exercise for them.
- If they were Proactive and not Reactive they would not have encountered such hassle.
When you’re engaged in International Trade you must know the “nitty gritty” of the business such as importing – exporting documentation procedures and custom procedures to name just two.
When you join our on line International Trade course, among other subjects we show you how to look up import duty in ANY country.
We never shy away from helping anyone in distress but we do say if you are going into the business of International Trade, get training or better still go the a company with 25 years practical experience in International Trade and join our online course.
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The EU and in fact whole globe, is now caught up in the “Greek Tragedy”, will they, or won’t they stay? Nearer home, the UK Government is mumbling about staying in a ‘reformed’ EU, reformed of course in the interest of the UK.
As Brussels has declared ‘dream on UK’.
The basic precepts of the free movement of goods, services, people and money will NEVER change as these are not on the table for discussion.
If we have a referendum within two years in the UK, it would place us in a very precarious position. The EU could make minor concessions in order to keep the UK in the European Union.
The general opinion seems to be that parts of the EU legislation is good for the UK and we would be happy to hold on to a few of the basic precepts, namely the free movement of goods and services as well as money. The free movement of people is however, too contentious to discuss in this blog.
Just a thought, if we do eventually leave the EU, why not become a preferential trading partner with the EU? We would still maintain working commercial relationships with our current trading partners in the EU and also allow us to seek new partners on a level playing field with other EU members.
Take Turkey as an example of an Preferential Trading partner with the EU,
Turkish manufactures trade with EU member states under advantageous conditions. They can supply EU member states with DUTY FREE goods. This arrangement is reciprocal so it’s a win-win situation and Turkey is not burdened with other EU regulations.
On our own, we could still trade with the EU as a Preferential Trading partner and our goods would remain competitive.
There is a down side to all this, we would not be part of the legislative process of the EU but is that such a bad thing?
I’m old enough to remember when we were members of EFTA , and the duty-free movement of goods to fellow EFTA members . We survived!!!!
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