South Africa is now truly part of the global community and local consumers also want the same products that the customers in other countries are enjoying. You can satisfy the local demand by importing from overseas. Before starting to import here are some tips you should consider.
How to Import – Important Tips
- Research the local market first
Research locally first to see if there is a big enough demand for the product you are looking into how to import. Also, you need to know how stiff the competition is that you are up against. What might be a best seller elsewhere might not do well in South Africa.
- Choose the right supplier
Knowing How to Import is just the first step because dealing with overseas companies comes with many risks, so it is imperative you choose your partner well. Doing the necessary due diligence, attending trade shows and conferences and meeting trade representatives will all help ensuring you pick the right supplier. A visit to the supplier in their home country where you can check out the product quality and procedures will go a long way to identifying the right supplier.
- Establishing the relationship
Just choosing the right supplier is not enough. When learning how to import you need to still build and nurture the relationship. Identify and build a solid one on one relationships with key individuals in the supplier’s organization.
This is sometimes difficult and requires the hiring of an agent to liaise with the supplier for you.
- Trade between countries is not equal
Once you know how to import you have to choose the country of your supplier wisely. Different trade agreements exist between different countries. World trade is a tangled web of international agreements, treaties, customs unions and free trade zones. The Department of Trade & Industry (www.dti.gov.za) and SA Revenue Service (www.sars.gov.za) can give details for each country.
- Not all products are equal
Just as not all countries are equal when it comes to the import business, neither are all goods – so check a product’s status before you decide how to import. Many items require import permits that need to be renewed annually. Those classified as ‘prohibited’ cannot be brought into South Africa at all and goods which are ‘restricted’ require a motivation and additional paperwork.
- Research logistical implications
Having the ideal product and right supplier is one thing but actually getting the product to your business involves numerous logistical hurdles. Learning how to import & logistics is what makes the import business go round. You need to be able to get your product to market cost-effectively, efficiently and on time if you want to be successful. You’ll need to employ specialist agents for many of the tasks like freight forwarding and customs clearing, but make an effort to understand as much as you can about the complexities of moving products from A to B across international borders, and the accompanying legalities and details.
- Maintaining positive cash flow
How to import effectively involves dealing with long lead times and must typically pay up front to secure the order – all of which can put a severe strain or your cash flow. Overseas manufacturers/suppliers usually require anywhere between 20-50% of the payment up front, plus settlement of the balance prior to shipping. There may also be transport costs to harbours or airports in the country of origin, fees to agents, payments for customs clearance, etc. Even the South African authorities and SA-based freight forwarders may want up front payment before they release and deliver the order. Only then – perhaps many months later – can you begin to recoup your initial outlay. So when learning how to import, do your sums carefully, particularly in the start-up phase of the business when you will have many other costs as well.
(By: Tracy Venter)