Costs of Import

Customs Clearance
All goods that enter into the USA must have clearance through customs. To obtain clearance you or your agent will need to produce all documents such as invoices and bills of lading to the customs department at the port of entry. The overseas company will have to forward these documents to you or your agent when the goods are on their way in the shipment.

If you cannot present the appropriate paperwork for clearance within a particular time period then you may be levied storage charges or bond storage costs depending on the situation. Some goods will be subject to quarantine and you need to arrange quarantine inspection on these goods. There are costs involved in all these processes so these expenses will have to be bought into the calculation. If you are wise you will employ a customs agent who has experience in this area and they can attend to all the important requirements.

Methods of Payment
You should consult your agent or business adviser to work out the best method of payment. The most common method of payment for imports are:

  • Cash in advance. You pay for the goods before the shipment is sent.

  • Letter of credit. This is a deal set up between you and the other party and involves the exporter’s bank and your bank.

  • Draft. This is a deal which is set up between your bank and the exporter’s bank where you will receive the documents from your bank to clear the goods after you have paid your bank.

  • Open Account. Here the exporter will send you the goods as well as forward you the documents and you are able to uplift the goods and pay for the imports in the normal way. You may be given 30 or 60 day time to pay the total bill. That will be decided by the terms that you and the exporter have arrived at.

Your Import Check List
Before you start importing from overseas go through this checklist and be sure of your answers to these questions:

  • Are you happy with the payment method when paying overseas suppliers?

  • Have you projected what profit you should make? Are you confident of achieving enough sales? Is the whole exercise likely to be a profitable one for you?

  • What is your plan for distribution around the USA

  • Have you worked out all your costs to import? Have you brought in costs such as shipping or air costs, insurance, clearing charges, agents costs etc. Have you accounted for any unexpected costs that may arise?

  • Are the products you are going to import already selling in the country? If they aren’t why is this? Are you sure of the demand for them? Are any similar products made in USA sufficient to meet the demand?

  • Are there any restrictions on bringing in the product?

  • What duty and taxes are leviable on the product? What about Sales Tax?