Importing can be a useful way of saving money when sourcing goods and raw materials for your business. It can also help you widen your supplier base and increase the range of goods and raw materials you can use in your business. This guide explains:
You can find lower priced goods overseas because of lower labour costs and different tax regimes in certain countries. You can also often find higher quality finished products. Take advantage of the traditional skills and raw materials available to add authenticity and originality - find an extra edge which your competition does not have.
Importing is riskier than trading with a customer who is based in the UK. You can't check their creditworthiness and the quality of their goods as easily. It can also be costly because of import duties, VAT, transportation, packaging, storage and insurance. Fluctuating exchange rates can also impact on the price you pay for the product and your profitability. You can look at forward exchange contracts which create a binding obligation to buy or sell an amount of foreign currency at a pre-agreed exchange rate.
It is vital to source suppliers who have experience of exporting to the UK, and with whom you will have no language difficulties. Talk to your business contacts and think about getting references from their bank or an international credit reference agency. It would be a good idea to go and visit the potential supplier.
Under the principles of product liability you may be held liable for harm caused by goods you have imported. You have to make sure that the products are safe and comply with the relevant product standards. It is wise to take out insurance cover and remember to always inspect your goods as soon as you receive them. It is also important to get legal advice regarding your contracts and trading terms with suppliers and look at whether you need to get an import licence. This is required for goods such as textiles, iron and steel. You also need to notify HM Revenue & Customs if you are importing from outside the EC.
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