By: Anglo Cape Confirming (Pty) Ltd.
10 March, 2020.
You have found a great product and created a business plan, now it is time to import. Here are some tips and considerations:
You are required to have an import permit; information of what documentation is required you can visit SARS website for further information.
1. Find a trusted supplier:
Finding a trustworthy and quality supplier is an absolute must and cannot be overlooked. You do not want to skimp on time and effort when finding the right supplier, this can make or break your business.
It is also prudent to talk to various different suppliers, to compare and contrast various aspects, such as price, lead times, communication and much more.
There are various ways to mitigate risk when looking for a supplier, but nothing can quite safeguard you and give you a sense of comfort like actually going to visit the supplier.
2. Making sure the price is RIGHT:
Another critical aspect that can make or break your business, is price, and being able to negotiate with a supplier is critical.
You do not want to be importing a product that is coming in at a far higher price than your competitors.
Some key questions to consider and discuss with your potential suppliers and the answers they give can also guide you towards making a decision on which supplier to choose:
· What volumes are you going to be purchasing?
· With larger volumes are discounts possible?
· Does this price include packaging, cargo insurance, transportation and customs and duties?
· Understand clearly the payment terms and conditions.
There are many more considerations, but these are just a few to get you started in the right direction.
3. Work closely with SARS:
This cannot be emphasised enough, you do not want to go through all the work of setting up a business, finding a supplier and finally committing to your first import, only for your products to get held up at the port because of not having all the right documents and permits. Making sure you understand which category your products fall under is important as well as making sure you have a valid importers code.
4. Hiring a freight logistics company:
If you are new to importing, and don’t fully grasp the complex nature and all the procedures and necessary steps that need to be taken, it could very well be worth the money to hire freight logistics company to make sure the import process goes smoothly. Yes, this will could eat into your margins slightly, but it is better than a disaster scenario of not receiving your goods and making a complete loss. It’s also important to note that import procedures are constantly subject to change and review, this is another advantage to hiring a logistics company as they are staying on top of all the changes. Just like trying to find a supplier, meet with a few different logistics companies before making a final decision.
5. Dealing with exchange rates and fluctuations:
Foreign exchange rates for the South African Rand have been severely volatile in recent years. There are many factors that contribute to these swings in value, for example politics, environmental matters and other financial markets. Keeping up-to-date on these and other contributing factors will help you to take advantage of favourable conditions to secure the lowest rates, and therefore pay the least for your imports. Finding a reputable financial firm to do your forex purchasing is crucial in obtaining a fair rate. Always compare rates, as banks do add a premium to the rate, do not be afraid to negotiate where possible. If you are able to lock in your rate in advance, this is advantageous because you are able to do your costings and swings in the exchange rate won’t affect your projected margins and costings.
These are just a few tips and considerations when importing, it is a complicated process with a lot of moving parts. It is vital to do your homework and make sure you have all your bases covered before doing your first import.
If you would like further information on how Anglo Cape Confirming (Pty) Ltd. can assist your business with the financing of your imports, please contact us!
(021) 419 5820
We look forward to hearing from you!