Our previous post was about Ten tips before importing, where we explained tip 1 - 5.

If you missed our previous post, you can check it through the link below
https://www.nairaland.com/3339219/ten-tips-before-import-lets

6. The risks of importing
There are more risks associated with importing than buying locally and you need to be aware of these to manage them effectively. These include the following quality and delivery concerns.
 The distance between you and your supplier is great. This means it is harder for you to check on, or deal with, issues like quality control.
 The delivery distance is further and the delivery time longer, which makes returning goods more onerous.
 Because of the time it takes to deliver, you might end up in a position where you have to accept inferior goods, simply because you can’t source the right quality replacement product in time if your supplier lets you down.
You’ll need to take care to source reputable suppliers, and only place orders on terms that give you cover against non-delivery and include penalties for late delivery or for goods that are not up to standard. It also pays to source alternative suppliers so that you have a back-up should you require it.

7. Dealing with exchange rate fluctuations
Exchange rate fluctuations are another potential risk that you could be exposed to as an importer. You’re probably buying goods priced in a foreign currency, which means exchange rate fluctuation can affect the final amount you’ll end up paying in Nigeria Naira. The rate could move in your favour or against you. There are a few ways you can deal with this:
 Transfer the risk to the supplier by asking them to quote in Nigeria Naira.
 Purchase forward cover to protect you from fluctuations.
 Add an exchange rate risk to your margins and carry the risk yourself.

8. Choosing a reliable overseas supplier
The cheapest supplier is not necessarily the best supplier to deal with for imports. It is more important to find a reputable supplier. You want to source a supplier who you’re reasonably sure:
 Won’t disappear overnight with your cash
 Will deliver on time
 Will deliver the products you have specified and at the level of quality expected
 Will keep you informed if there are any problems or delays.
Ask to see a list of customers that your potential supplier supplies and contact them for references. Do a credit check on the company, and if you can, spend the money to physically visit them and inspect their premises, plant, and the quality of their output. If you’re not able to arrange a site visit, at least insist on samples before placing your order.

9. Dealing with overseas suppliers
Dealing with suppliers in a foreign country often involves a steep learning curve. You might be dealing with people who do not speak the same language as you, and you will almost certainly be transacting with people with a different culture and set of values from yours. The potential for misunderstanding and miscommunication is much larger than when dealing with local suppliers.
Find out all you can about doing business in the country from which you plan to import. Your industry association or local Chamber of Commerce might be able to give you some pointers, but the best way to find out all the ins and outs is to talk to people who are currently importing from, or exporting to, the country concerned.

10. Trading terms and customs requirements
Trading terms
Before you sign an import order, you’ll need to understand trading terms used by importers and exporters, and you’ll need to be sure that both parties are using commonly accepted understandings of these terms.
To get to grips with terms like EX (ex works or ex factory, warehouse, or plantation), FAS (Free Alongside Ship), and FOB (Free on Board) is not as difficult as it might first seem. The International Chamber of Commerce has developed standardised rules for the interpretation of trade terms called Incoterms. Incoterms 2015 is currently used. Your bank’s international trade department, a freight forwarding agent, or your local Chamber of Commerce should be able to help you with this.

Customs requirements
There are a number of customs requirements that you need to be aware of if you plan to start importing. It is an offence to make an erroneous customs entry or declaration and it is recommended that you have a freight forwarder or customs broker assist you with this paperwork.

Next Steps
 Establish that there is a sustainable demand for the product you plan to import and that you can import the item legally into Nigeria and sell it at a reasonable profit, or use it in your manufacturing process to increase your margins.
 Draw up a list of reputable suppliers and enquire whether they have the capacity and equipment to supply your import needs. Draw up a short list and ask them to supply samples to your specifications if applicable.
 Engage the services of a freight forwarding or customs broker to assist you with understanding the trade terms, and talk to your bank to understand the financial implications of the orders you are thinking of placing.
 Negotiate the terms of trade to protect you against non-delivery, later delivery, or goods that do not pass quality control tests. If the item is critical to your business, have a back-up supplier in place in case you need it.

Best Regards
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