How to import into the USA

1. About Me About CITD About You How to Import into the USA

2. Basic Business Practices Have fun Apply common sense Define what you want to be Is importing a different business? Can I sell imported products at a profit? Keep records. Count everything Expect to keep different hours. Be Flexible

3. IMPORTING IS DIFFERENT Logistics Change Effort Time Travel Money Payments Commitment Culture Buyer Needs Channels of Distribution Regulations Time Zones Language

4. OR IS IT? Still need to sell product procured abroad at a profit Do not discount domestic capabilities Get quotes from domestic producers Compare. Add the time, effort, uncertainty and relative lack of recourse of foreign sourced goods Do I need license to import

5. What is an HS Number and How do I get one Harmonized Tariff Systems http://dataweb.usitc.gov/ http://dataweb.usitc.gov/scripts/tariff2001.asp

6. WHY IMPORT To buy directly from the source abroad To acquire products not manufactured in own country Cost benefits , cost quality considerations Made to order flexibility Take advantages of other countries export promotions To expand, enhance your business line To offset export operation To travel abroad Minimize taxes, travel abroad To make a profit Establish business credibility

7. Basics business practices Is it legal Knowledge of the business Knowledge of the Import Process Business etiquette as applied to source country Accept verbal commitments as stated in a written fully executed contract (in English) Trust is nice but ………... Be flexible Use professionals

8. More ………... Keep it simple Know your market Define limitations Make a cold financial assessment Is it worth it? Has it been worth it? Why pay?

9. Sourcing your product I have the ideal product/service I will be able to sell it at a PROFIT. I know that someone somewhere has sourced a product similar to mine at a lower price and that someone is selling it at a higher price. I just need to find the source Do not wait for perfection. Settle for pass Always seek U.S. sources for comparison

10. WHERE TO SOURCE YOUR PRODUCT Embassies/ Consulates Commercial Attaches Associations AMCHAMS ASK THE SELLERS alibaba.com taiwantrade.com proeastwest.com tradeline.com.br asiansources.com eurotradeleads.com busytrade.com buysellex.com cometotrade.com globalspec,.com

11. MORE WEBSITES imex.com microline.com trade-circuit.cov vendorbase.comlabl.com ectrade.com europages.com 5five.tv/tradeleads.htm

12. Sourcing, defining your needs Define your needs Have them in writing Are they reasonable Is there a mutually beneficial relationship between yours and your potential supplier needs.

13. Sourcing, on business relations Define relationship Recognize imports = different culture Quality issues Production issues Logistical issues Payment concerns Be prepared to do business Have adequate working capital

14. Import Products Easy to Import: Crafts/Artwork/Glass Gems/Semi-precious Household appliances Tools/Sporting goods Musical instruments Leather goods Stationery / Paper goods Difficult: Drugs/Spirits Aerospace/Radioactive Animal live Used merchandise Foods/Cosmetics Chemicals/Combustibles Weapons/Explosives Vehicles

15. Commonly Prohibited Embargoed Countries ustreas.gov/ofac National treasures, archeological finds Material considered pornographic Food or products raised in infected countries (foot & mouth; mad cow) Products that violate intellectual or industrial right laws Products from endangered species Drugs not approved by FDA Other

16. DO I NEED A LICENSE TO IMPORT GOODS U.S. Customs Service does not require an import license for goods brought into the United States. However, other agencies may require a license or certification. FDA, DOE, DOJ, EPA, , Textiles, Federal Trade Commission, Wildlife Dep. Of Interior

17. Due diligence Check your potential supplier Talk to competitors Distributors Equivalent BBB Check with the US Embassy Inquire with friends and acquaintances Check with Intl. Clubs (Moose, Elk, Lions, Rotary, Masons & other fauna)

18. More on due diligence Secure suppliers start small Common sense vs genius Federal, state, county and city agencies Check, recheck your assumptions Remember cultural, linguistics and geographical differences Use plain, simple, idiom-free language.

19. How Do I Get Started? Select a product or service: Apply common sense Stick with what you know Use your cultural knowledge Perform marketing research Niche product, in niche market Management Commitment

20. WHAT AM I? IMPORT TRADING COMPANY? (Manufacturing Rep) IMPORT MANAGEMENT? (Wholesaler/Distributor) MANUFACTURER? – Value Added Reseller (Inputs transformed into goods) RETAILER?

21. Import Trading:Primary Activity: Sell products to domestic buyers Take title to goods Buy product from the manufacturer & resell Arrange for shipping and payment Advantages: You determine price; can make more money Long term relationship with both manufacturer and foreign buyer Overall, have more control in the marketplace Disadvantages: More liability

22. IMPORT MANAGEMENTPrimary Activity: Sell foreign goods to domestic buyers Don’t take title, put buyer & manufacturer together Receive Commission Shipping arranged by manufacturer Payment arranged by manufacturer Advantage: Less liability Disadvantages: Manufacturer could determine price Manufacturer will try to terminate relationship Less control

23. Once a product is selected.. What do we want (as company) to gain from importing Is importing consistent with company goals? What demands will importing place on key resources? How will they be met Are the expected benefits worth the costs or should the resources better used in new domestic business?

24. Perform Market Research Questions To Ask: Manufactured in country? Is other competition there? What price is product being sold at? Is there cultural applicability? Product meet USA standards? Can it be adapted to standards? If so, $ Restrictions or regulations? What are the different markets for your products? Who are the distributors? Who are the final consumers

25. How To Perform Marketing Research TALK TO YOUR COMPETITORS WWW.STATS-USA.GOV USE ASSOCIATION USE INTERNET Call End Users Visit the BRC!!! http://dataweb.usitc.gov USE OTHER COUNTRIES RESEARCH!!! I.E., http://www.atn-riae.agr.ca

26. How do I get an HTS Number Harmonized Tariff # Search http://www.census.gov/foreign-trade/schedules/b/index.html 2. Entire HTS usitc.gov/tata/hts/bychapter/index.htm 3. http://rulings.customs.gov/

27. Your Partners Your clients Your procurement source Custom Broker Freight Forwarder International Banker Attorney Custom Lawyer Certified Public Accountant

28. Freight Forwarder They move freight internationally Don’t confuse with a custom broker Information you need: Weight of shipment Dimensions of shipment Where it is being shipped from Where it is being shipped to Collect or prepaid

29. CUSTOM BROKER Efficiently & legally obtain clearance through customs

30. Incoterms 2000 EXW: City, State, Country CIF CFR FOB DDP International Commercial Terms

31. Pricing Products Cost from foreign manufacturer Freight /Insurance Duty / Custom Broker Other Costs /Indirect Costs Profit Distributor mark-up Retail mark-up Cost comparison – Competition Price Common sense test

32. Documentation SLI: Shippers Import Declaration/Bill of Lading/Carrier Certificate naming consignee Commercial Invoice from Exporter, showing value & describing merchandise Packing List Certificate of Origin Entry Manifest Customs Form 7533 or Entry Immediate Delivery (Customs Form 3461) Rely on your custom broker

33. Contact The Manufacturer Obtain exclusivity Right to commercialize product Check USPTO Brochures Samples Warranties – Guaranties Marketing Allocation

34. How Will You Pay The Manufacturer? Terms Letter of Credit Wire Transfer Payment in advance

35. Purchase OrderProvide Information For Seller to Make a Sales Decision Your Company Name Buyers Name Date Reference Number Quantity Description Unit Price Extended Price Currency Weight of Product Dimensions of Product Packed Country of Origin Point of Delivery Payment Terms Request Valid For

36. Intellectual Property – Contractual Obligations Trademarks – Who owns what Exclusive Distribution Arrangements Warranties - Replacements Shared Marketing Costs Royalties

37. Getting Paid USD Dollars Do not sell on open terms or consignment Credit Card Industry Payment Terms Checks PAYPAL..COM ESCROW.COM

38. Information Commercial Attaches Business Associations (I.e, Korean/America, Hungarian American, etc) AMCHAM US Embassy Web - Thousands of organizations Friends, acquaintances, PXs, churches, etc.

39. More Go to fairs, network Keep proper records When is best to use a wholesaler rather than the source Ask your competitors International yellow pages Settle on pass not A++

40. A few websites www.citd.org/trade_info/index.cfm calcitd.ning.com thomasregister.com http://www.cbp.gov/ US Customs http://global.broad.msu.edu/ibc/

41. On contracts, trademarks, distribution agreements, pro forma invoices, and …. Understand the terms as understood by others Contracts should always be in English Do not agree to something you do not fully understand Leverage available resources Take your time Persevere

42. BUSINESS PLAN - FIRST DRAFT Primary objective is to develop a Draft Will indicate what next steps to take Quick & dirty Overall guide Reality test

43. Draft Business Plan must address Product selection and modifications if any. What source countries are targeted For each product what is the basic costumer profile What marketing and channels What special challenges to each and how to overcome them How will the products’ import sales price be determined What specific operational steps must be taken and

44. Customer Service You must service your accounts!!! Customer Service Academy

45. Q & A Riverside CITD Robert Corona (951) 571 -6443 (909) 486-3344 www.citd.org