5 things your small business needs to know

Inflation is dampening the retail economy, but e-commerce continues to sink. In the United States, online sales broke the $1 trillion barrier for the first time in 2022, despite a decline in real incomes over the past year, and National Retail Federation (NRF) Chief Economist Jack Kleinhenz expects consumers to continue spending despite falling real incomes.

However, despite encouraging market trends, management cross border shipping is a greater challenge than expected. The supply chain is still strained and inflation has pushed up shipping and transportation costs as US imports in 2022 have fallen to their lows the lowest level since the peak of the pandemic.

That said, here are five things you need to know as a small business owner to manage imports and exports in today’s global economy.

imports and exports

1. Familiarize yourself with customs regulations

It is important to explore the customs regulations before even choosing the goods to sell. Different countries have varying tariffs and restrictions on categories of imported products, so you will need to research the regulations of each country you are shipping goods to.

You may need a license to import certain types of goods or specific permission from various government departments such as the Department of Health. The value of a given product can also make a difference. For example, in the United States, you don’t have to pay customs tax on shipments worth less than $800, and if it’s worth less than $2,500, you won’t need to file a ” official entry”, which saves you additional costs and documents. such as customs obligations.

There may also be laws regarding the countries from which you are legally permitted to import; the United States, for example, has strict rules regarding imports from countries engaged in criminal activity, such as Ghana and the Ivory Coast, which pose a high risk of facilitating modern slavery. If you are importing from China, you will need to prove that your goods are not from the Uyghur region to comply with the Uyghur Forced Labor Prevention Law.

It is important to learn as much as possible about the customs process in order to avoid problems with your shipment. “Failure to provide the correct documentation and follow the correct procedures, you run the risk of having your goods held and/or examined, resulting in delays and high costs.” says Agatha AvisoExpert Retail Software Writer at Fit Small Business.

2. Maintain relationships with freight forwarders and customs brokers

Managing imports and exports on your own is difficult, especially if you’re a small retailer without a full-time shipping expert on your payroll. That’s why it’s worth cultivating relationships with partners who can guide you through the necessary import logistics and documentation, and ensure that your goods are properly transported and cleared through customs.

Customs brokers, for example, are specialists in import and export laws and can provide legal advice on logistics and shipping procedures.

Freight forwarders help arrange end-to-end transportation. Once your goods have reached the port of arrival, they will need to be transported to the warehouse. This can be a serious headache for SMEs, which often do not have a fleet of trucks at their disposal. Freight forwarders provide last mile transportation.

Online freight forwarders such as Ship4wd can help you with multiple aspects of the international shipping process, such as navigating customs bureaucracies for you, arranging freight insurance, and helping your small business get priority over big business with competitive rates. Ship4wd in particular caters to SMBs only, with cash flow-friendly payment options such as credit and direct debit and 90-day payment windows.

3. Understand the landed cost

There are many fees and duties to consider when importing goods, including product costs, shipping costs, customs duties, taxes, insurance, customs brokers, freight forwarders, etc The total is called the “landed cost”, ie the total cost of delivering the product to the end user.

“Many e-commerce businesses make the mistake of assuming that cost of goods sold (COGS) and shipping costs are the only costs you need to cover when pricing your product,” writes Cathy Ostlie, content writer at ShipMonk. “The landed cost includes all of these costs, plus additional expenses incurred by the seller after the product is sold. This makes landed cost a much more accurate number than cost of goods sold (COGS) for setting your list price.

The country of origin may also affect customs duties and other fees you will need to pay. To give an example, an inbound shipment to the United States over $2,500 requires a fee and a bond. You will also want to evaluate different shipping options, such as ocean freight, air freight, or courier services, which have different prices. Miscalculations can lead to wrong profit figures, which in turn can invalidate all your profit calculations.

4. Double the documentation

Incomplete or inaccurate documentation and incorrect labeling or valuation can increase the risk that your shipment will be seized for examination or, at worst, destroyed or sold at auction. Therefore, it is essential to ensure that your products are correctly classified under the appropriate HS codes and comply with labeling requirements such as country of origin, safety warnings or specific product information.

Transport management platforms such as Cargo can help ensure your documentation is present and correct by digitizing the process. By using a software tool, you are less likely to forget an essential form or miss a required field.

5. Protect your products

Packaging also plays an important role in retail imports. Quality packaging can help ensure that your products arrive in good condition, but problematic packaging or packaging that appears to have been tampered with can also raise suspicion from customs officials. If your goods are not securely packaged, it increases the risk of them being seized for examination.

At the same time, you will need adequate insurance. Many retailers make the mistake of assuming that shipping companies cover insurance, but insurance that covers lost, stolen or damaged goods is the shipper’s responsibility. Many freight forwarders and shipping companies offer cargo insurance, but you will need to request it. It is not applied automatically.

Your usual professional insurer may offer freight insurance, or you can choose a specialist in this type of insurance. Companies like World HDI offer cargo and marine insurance as well as other types of insurance packages.

Imports and exports don’t have to be a headache

Importing and exporting comes with many hurdles, especially for retail SMEs with small staffs and limited resources. However, careful research and using the right tools and partners can help make the process smooth and streamlined, so you can focus on growing your small business.

Image: Envato Elements

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