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Saturday 2 July 2022
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definitions

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1. Identify potential suppliers and obtain a catalogue,

samples, prices and payment terms

The chambers of commerce, industry associations, foreign

embassies and consuls and government departments of

trade can help in the process of supplier identification.

The Internet is also a good source of information. The

price should be based on and include a reference to

Incoterms, eg: AU$500 CIF Fremantle 2000 Incoterms

or US$100 FOB Singapore 2000 Incoterms. Incoterms

represent the foundation for the interpretation of trade

terms between countries. Therefore, a reference to

Incoterms in the contract price reduces the likelihood of a

misunderstanding between you and the supplier.

2. Select a customs broker to assist with importation

Customs brokers expedite quick and trouble free clearance

of goods through Customs and Quarantine. They are

experienced in valuation, duty rates, tariff concessions

and freight. Customs brokers are listed in the Yellow

Pages and may also be identified through the Customs

Brokers and Forwarders Council of Australia Inc. website:

www.cbfca.com.au.

3. See the international division of your bank

Discuss the financial considerations eg: how will the

transaction be financed, what will it cost to finance, what

method of payment is to be used and what will the bank

charge?

4. Prepare a cost analysis to arrive at a landed cost

Make sure you include all costs eg: freight, handling

charges, insurance and customs duty (See over page:

Calculating your Landed Cost on Imported Products). Your

customs broker can undertake this calculation if you wish.

5. Is it commercially viable?

Having arrived at a landed cost and investigated the

marketplace to determine what your selling price should

be, is there sufficient margin remaining to cover all your

business overheads and still leave an acceptable profit?

6. Identify any special requirements

Establish if there are any special importing requirements

such as import quota restrictions, certificates required to

import restricted goods or special inspections on arrival.

Your Customs broker can advise you on these matters.

7. Place an order with the supplier

Request a written confirmation of receipt and acceptance

of order. Ensure the terms and conditions of the contract

of sale are clear to both parties i.e. product quality,

specifications, quantity, price, price basis, payment terms,

date required, freight arrangements and documentation.

8. Advise your customs broker of the details

Unless you intend to clear the goods yourself, provide

your customs broker with comprehensive details of the

transaction and copies of relevant documents to facilitate

trouble-free and speedy processing and clearance of the

consignment. Your bank will advise you when the shipping

documents have arrived – make sure they are in order

before you accept them.

9. When the goods arrive

When the goods arrive, make arrangements for your customs

broker to clear them through customs (and quarantine if

applicable). You will need to provide the bill of lading / airway

bill, commercial invoice and any other relevant documents.

10. Take delivery of the goods

Examine the consignment immediately for insurance

purposes. Give a clean receipt for the goods only once you

are satisfied as to quality, quantity and condition.

CALCULATING YOUR LANDED COST ON IMPORTED

PRODUCTS

NB Not all of the costs listed below are applicable in all

situations – In fact, in some cases they are built into the

price quoted by your overseas supplier eg:

FOB “Free on board” – includes ex-factory price, inland

transport and handling charges – in other words it

gets the goods on the ship or plane.

CIF “Cost, insurance, freight” – includes ex-factory price,

insurance and freight to the port of arrival.

FIS “Free into store” – includes ex-factory price, insurance

and freight to importer’s warehouse.

EX-FACTORY PRICE:

price charged by supplier in country of origin

PLUS:

Inland transport within country of origin to port

of departure

Handling charges at port of departure eg

inspection

and loading

Freight cost of getting goods to

Australia

Insurance of goods whilst in transit against

damage, loss or theft

Local handling charges at port of arrival eg unloading

and storage at wharf

Customs duty check Customs Dept or your

Broker for rates

GST 10% of value of taxable

importation (goods + duty +

freight + insurance)

Import license fees check Customs Dept or your

Broker for rates

Interim storage charges for storing prior to receipt in

your warehouse

Demurrage charged on delays in clearing

goods

Quarantine fees for storage of goods, usually

livestock, in quarantine

Fumigation fees for treatment of goods by

fumigation process

Transport to local warehouse

Testing, and certification for safety compliance

Customs brokers fees for facilitation of importation

process

Exchange fluctuations depending on transaction

currency (insurable but can be

costly)

Repackaging/labelling to either comply with local

regulations or to enhance

marketabilityBank charges for processing of transaction

and transfer of monies  = LANDED COST