Importing goods into Australia can be challenging if you don’t know what to expect. You might be looking to establish a new import business or would like to source some supplies from overseas for an existing business. Whatever your situation is, some navigation throughout the process will help.
We’ve put together an easy to follow 10-step guide to importing cargo from overseas. We’ll cover everything from setting up your business and working with your freight forwarder, to tracking your goods for arrival.
#1 Setting up your business – registering for an ABN
The first step when starting your own import business is to research the market – what goods and services are in demand? What can you sell and what should you import? Get to know what Australia is importing and what materials and products are in demand from overseas. Search for any gaps in the market that aren’t being fulfilled and capitalise on those opportunities.
Once you’ve decided the premise of your business and have a plan in place, you must apply for an Australian Business Number (ABN). This number identifies your business and can easily be applied for on the Australian Business Register. Note that an ABN is not the same thing as an Australian Company Number (ACN), which is issued to companies by the Australian Securities and Investments Commission (ASIC).
#2 Choose your overseas supplier
Your next step is to research and find international suppliers and partners that will export goods to you. This will involve comparing suppliers in the market and assessing which one is best suited to your business goals.
During this process, you’ll want to assess the below:
- Their minimum order quantity (MOQ). You do not want to engage a supplier who has a requirement to purchase an amount that is too much for you. Note that you will very likely be able to bargain on this, as MOQs are negotiable around 90% of the time. For instance, you might make a compromise by providing an immediate deposit.
- Sample price ranges. You can get an idea of how much the supplier will charge by requesting samples to inspect prior to making a complete order. Samples might be offered to you for free or at a discount.
- Production pricing. This is simple – ask how much the suppliers’ products cost to purchase. We’d recommend asking the pricing for multiple products to see if they offer discounts on large orders.
- Turnaround time. It’s crucial to know how long it will take for the supplier to actually deliver your products, especially if your business peaks in particular seasons.
- Payment terms. Make sure you check what the suppliers’ payment terms are, as many will require you to pay upfront for the entire order. You can also ask if they offer payment terms on orders you may make in the future. If a supplier appears to be unreasonably pushing you to order on certain terms, this should raise alarm bells.
- Incoterms. It’s also important to determine what shipping terms you will be operating under with your supplier to determine the risk you will take.
#3 Receive a sample product and quality check
When you’ve found a supplier that looks promising, ask for a sample product from them. Study it comprehensively and ensure that the goods meet your quality standards.
Make sure you conduct thorough quality checks before signing the dotted line with a supplier to save pain in the future with unsatisfactory products.
#4 Work with a freight forwarder to understand the costs to import your product
We highly recommend engaging an independent freight forwarder to liaise with your international suppliers. Freight forwarders such as International Cargo Express, employ expert freight specialists who can help you understand all the hidden costs that come with international imports.
For example, did you know that using Non-Operating Reefers can save you money instead of hiring regular empty shipping containers? Or that consolidating multiple smaller shipments into one larger shipment can save multiple handling charges? Or even that Australia has 14 free trade agreements in place providing for the removal of duty charges on your imports from different countries (including China)?
A freight forwarder will be able to give you tailored advice about structuring your shipping timeline in the most cost-effective way possible. They can help you save money in your supply chain in the long term and throughout your shipping experience.
#5 Negotiate with your supplier considering incoterms
When you’ve found a supplier that’s right for you, you’ll want to negotiate a deal with them to purchase their products. When negotiating, it is important to consider what incoterms you will be buying on.
Incoterms is an acronym standing for international commercial terms. They are terms of trade that identify the division of costs and risks between the buyer and seller when shipping internationally. They are often discussed when costs are negotiated during the sales process. Incoterms rules are universal, providing clarity and predictability to business around the world. A requirement on every single commercial invoice, they greatly reduce the risk of potentially costly misunderstandings.
It’s important to negotiate the purchase based on an Incoterm that adequately suits your business, as it’s these terms that will allocate the risk between you and your supplier. Some terms favour the seller and some favour the buyer (i.e. you, the importer). Once again, if you are unsure how incoterms operate, engage a local freight forwarder to provide tailored advice suited to your business needs.
If you do not know how incoterms will impact your purchase price, we suggest you read our Beginner’s Guide to Incoterms.
#6 Compare sea and air freight options
There are significant differences between sea freight and air freight. Whilst sea freight is generally the cheaper option, it will take longer and is not the best option if your cargo is urgent.
You may have contractual obligations with a buyer that you need to take into account, load capacity as well as the stock you have on your shelf. Is sea freight going to be risker than air freight if it gets delayed in a transhipment port? Is air freight your only option due to the urgency of the shipment?
There are many factors to consider. We’ve put together a guide on what to look for when you’re making the comparison between air freight and sea freight.
#7 Send a CCA to your freight forwarder – Book your shipment
Before a freight forwarder is able to conduct business on your behalf, you’ll need to send them a Customs Clearance Authority (CCA), which is a document that gives authority to the forwarder to customs clear your goods. Without a CCA, your goods will face delays once they land at their destination port.
In the United States and in other countries, a CCA is commonly known as a Power of Attorney. You can download a copy of ICE Cargo’s CCA to fill out below.
You’ll also need to book your shipment, which we suggest you do early. In particular, booking in advance is advised if your cargo is due to be shipped during shipping peak season (around mid-August to October) when many importers are shipping goods in time for the busy Christmas season. The likelihood of delays during this time are greater, so secure space early to avoid disappointment.
#8 Prepare and send all documentation
There are a range of critical documents that you must send to your freight forwarder. Without these documents, they’ll be unable to act efficiently on your behalf and you will likely experience delays on arrival.
These documents include a commercial invoice, packing list, packing declaration, certificate of origin and – if applicable – declarations, if there is a risk that your goods contain asbestos or need to be fumigated against any agricultural pests, such as stink bugs.
You can read more about this in further detail in our shipping documents blog.
#9 Track your goods for arrival
Once the documentation is available and your shipment has been booked, it’s time to track your goods so you know where they are at any stage of the shipping journey.
Should you engage International Cargo Express as your expert freight forwarder, you’ll have access to bespoke reporting and online tracking to track your cargo across the globe. By knowing where your goods are and if they are running on schedule, you’ll be able to run your business without having to worry about when your goods will arrive.
Once the shipment has been fulfilled and you receive your goods, it’s time to review how the process went.
Review your costs, the time it took for your shipment to arrive, the service of your suppliers and the overall journey. What can be improved upon and what stages of the process can be more cost-effective? Are you taking advantage of Australia’s free trade agreements with other countries? Do you need to apply for a dumping duty assessment?
An independent expert freight forwarder can assist in streamlining your shipping process, helping you avoid unnecessary costs in your supply chain.
Importing into Australia during COVID-19
The Department of Agriculture, Water and the Environment have put steps in place to ensure your goods can still arrive into Australia safely during the COVID-19 pandemic. Whilst the Department has not put extra restrictions on imports, travel restrictions may cause freight delays which could then impact the time that your goods arrive in Australia. We suggest reading the Department’s website for further information regarding any relevant government policies.
With restricted flights and bans on international travel, shipping delays are currently occurring all around the world. We, therefore, recommend you factor this into your shipping timeline when planning for the future. For further information, you can read our blog on how to plan your freight with changing timelines.
If you have any further questions about importing goods into Australia, please don’t hesitate to contact one of our friendly international freight specialists at ICE. Alternatively, feel free to leave a comment below.