Importing stock from overseas is a lot more complex than picking up the phone, placing your order and waiting for the goods to arrive. There are a lot of factors to consider before you go ahead and place your first import order. We’ve put together 10 tips to help you decide whether the allure of cheaper prices or better products from overseas is as attractive a proposition as it might appear to be at first glance.

1. IS THERE A LOCAL MARKET FOR THE GOODS YOU WANT TO IMPORT?
IMPORTING FOR RESALE
You’ll need to make sure there is enough demand in your local market before you start to import goods for resale. Identify your potential target customers and conduct a survey among them to get a feel for whether importing will be profitable. If there is limited demand, you could end up sitting on a pile of stock that you’re not able to sell and making a loss on the deal.

IMPORTING FOR USE IN MANUFACTURING
If you’re planning to manufacture a new product, you’ll need to check there is sufficient demand for the end product to warrant importing some of the stock you’ll need. If you plan to use imports as a substitute for local suppliers for items already in production, it would be wise to check that current levels of demand are expected to remain the same or increase. If demand decreases, you could end up tying up too much of your working capital in import stock that sits on your warehouse shelf.

2. ARE YOU LEGALLY ABLE TO IMPORT THESE ITEMS INTO NIGERIA?
Before you spend time, effort, or money on further research, you should make sure you’re allowed to import the goods you plan to bring into Nigeria. There are a number of restrictions placed on items you can import. These range from outright prohibitions, which would apply to things like chemicals or medicines, to restrictions on particular products or items from particular countries.

3. THE COSTS OF IMPORTING
You’ll need to find out all the costs and charges you’ll need to pay before you place an order with an overseas company. These costs could include:
 Transport and insurance costs (depending on the trade terms you negotiate)
 GST
 Customs duties and levies
 Storage
 Finance charges
 Charges for services like the use of customs brokers or freight forwarders.
You’ll probably need to identify the correct customs clearance tariff for the goods you want to import to find out how much you will need to pay in customs and duties. You’ll probably also need to supply the country of origin of the goods and the value (excluding shipping), to calculate the correct amount payable.

4. IS IMPORTING ACTUALLY COST EFFECTIVE?
Once you have an idea of the final landed cost of an item, you’ll be able to check whether importing will be a cost-effective option for your business. There are a lot of additional charges you’ll need to pay over and above the cost per unit from a factory overseas, and these can add up. You’ll want to be able to make a reasonable return on investment after all these costs have been taken into account.
It is a good idea to get your accountant, business adviser or customs broker to go through your calculations to make sure you’ve included all the costs you’re likely to incur.
You’ll also need to conduct market research to establish what products your competitors are selling. It is a good idea to keep a list of product names, specifications and retail prices, to make sure your imports do have a competitive advantage or unique selling point that differentiates them from products your competitors sell.

5. CAN YOU AFFORD TO IMPORT?
It’s important to make sure you can afford to finance the cost of importing. Importing is cash intensive for two reasons. The first is that given the high shipping or transport costs, it is more cost effective to place larger orders less often than smaller orders more often – so import orders are often large, and therefore expensive.
The second reason is that importing ties up working capital. The person you’re buying from will either ask for payment upfront or ask for a letter of credit or some other payment guarantee from your bank. This means you can’t access the money or use it to run your business in between placing the order and paying for it, which can spread over a number of months for some orders.
Run a cash flow forecast to make sure you can still manage to run your business effectively while you have money tied up for import orders. Speak to your accountant, bank manager, or financial adviser to double check you haven’t overlooked anything important.

Im from the international customs broker industry and I must say that this tips is helpful in some aspects. Before importing you really need to consider some things that can help you with regards to importing. We know that importing can be really a lot more complex than we really know, factors can help a lot in order for you to decide what is best before importing.


Regards,
Emelia I.
http://www.brint.com.au/services/brokerage