Forums: Discussions for entrepreneurs and small business.

"and most exporters, especially in Asia ,are aware of that fact and provide just that :) " - While many and maybe even most Asian suppliers are honest and provide accurate commerical invoices, I meant this as a warning.  We help many people get started importing goods from China and one of the most important points we make is to negotiate on product price seperately from freight otherwise you have no idea what you are really paying for, let alone the taxable value situation.  We see it very frequently that the maker of goods in China will be in an alliance with a relative at a shipping company and try to make extra profit off of the small unsophisticated buyers.  So they will quote very low shipping prices, but they jack up the product price to compensate, which creates two problems, 1) they make more money than their competitor who just quotes FOB or EXW terms, AND 2) you have a higher taxable value than you would with their competitor. 

So, ujeans, just make sure you have a reputabe supplier, and good clean commercial invoices.  I recommend that you establish a relationship with a customs broker locally so they can help protect you from potential errors, deliberate or accidental, also if importing regularly you need to establish a "continous bond" which will save you money.  FedEx/UPS etc are known to make errors and misclassifications, primarily just due to their high volumes and electronic processing, they are cheap, so you will need to weigh the cost/risk here.  Get educated on how GST and Customs works, or have an employee learn becuase you need to watch these things.  In todays competitive market profits and can be made and lost by harmonized tarriff codes, especially in finished clothing related commodities.

We have supplied software for Asian shippers and our experience so far is one of a lot of ever changing issues.  I guess you would call them growing pains.  FreightGuy is right and you need to do your homework.  As the Asian economy continues to grow, labor costs continue to increase, government issues there change and energy cost continue to go higher there is going to be a lot of creativity going on by Asian companies to continue to sell products at current low prices.  It is my opinion that this will not last forever so you need to be ready to change.  Good preplanning and knowing the facts will keep you from dealing with major losses as things change.  Do not leave any charges to be flexible or unknown when you make your deal.  Lock in all the costs and know all the players involved before agreeing to anything.  If you are responsible for freight and your volumes are not too huge, I would highly suggest trying to make things work with a US based shipper like UPS or FedEx first to keep your costs known.  It might be a little more expensive, or not, but you will be working with known costs and it is a great way to understand all that is going on.  Then as you gain knowledge of international shipping from that region, you can try other sources as time goes forward.  There is a lot good comments going on with this topic that many first time business have issues with when they deal with international shipping.  Good discussion!

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...