Saying hola, ni hao and ciao to overseas products
Whether it’s through sipping on Colombian coffee, instant messaging on our Chinese-made smartphones or grabbing our Italian coats as we head out into the rain (if you’re from Melbourne), we Australians are constantly consuming our goods from abroad without a second thought.
And there’s a reason for it. While there is no doubt in the quality of Australian produce, it is undeniable that with certain products the grass is greener on the other side (or in this case it’s shinier, more cost-effective and better-made), which is why Australia imported $669 billion worth of goods and services in 2015.
This weekend, the Airwallex team will be exploring the possibilities importing to Australia at the E-power and Lighting expo, which will showcase products from all over the world. In light of this, we take a look at the dos and don’ts of importing the right way.
Do: Build relationships with your importer
Whether it be the manager of a factory, the clothing designer, or the owner of an online store, you need to make sure your contact is reliable so that you have a point of call if something goes wrong with your order. The more they know about you, the more likely they are to help you as fast as possible.
While it’s not always possible to fly over, emailing, phoning, Skyping, or WeChat (if your importer is from China) are all perfectly viable options for maintaining the business relationship, and often getting the contact details of more than one person from the company guarantees less risk.
Do: Make sure quality comes first
You want to be happy that you are buying what your product says on the tin – so trying out a sample import to sense-check will give you a greater insight on how your importer carries out their transactions, whether the quality lives up to expectations, and how long they take to arrive.
Do: get to grips with regulations
The Australian Government have a number of essential importing regulations which must be complied with, and it is essential to get clued up on them before you begin placing your orders. You can find them here.
Do: Make educated choices
A little research can go a long way. There are a number of money-saving routes you can take if your products fall within certain categories or are imported from certain places.
The Australian government has implicated several free trade agreements (FTAs) with other countries, which means no surcharge for taking it over the borders. Make sure you’re aware of which countries are part of these agreements, and which will incur extra cost. You might also be eligible for concessions, which apply to goods which can’t be produced in Australia, saving you money on extra tariffs.
Finding the best method of goods delivery can also reduce costs drastically. Your two options are sea or air. The best choice for your business will depend on budget, time constraints and the geographical location of your goods. It is recommended you talk to a number of freight management companies to get a quote before you make your choice.
Generally, sea freight to Australia is more cost-effective, and will take about three to eight weeks to arrive, depending on where you are importing from. Flying tends to take less time, but is a lot more costly– anything over five or six boxes can become extremely expensive.
Do: be aware of the real cost
Importing your products from elsewhere can be a great way to cut essential costs, but if you’re not careful, the process can end up being a lot pricier than you intended.
Taxes and Tariffs
There is a high chance that you will be taxed for the goods you bring into Australia. If your business does not already have one, getting an Australian Business Number (ABN) is the only way can claim tax credit back. Make sure you’re aware what tax brackets your goods fall under. The taxes and tariffs you need to consider are:
- Import entry and processing charge costs
- Valuing your goods for customs duty taxes
- Making sure your goods are in the right tariff classification
- Being aware of alcohol and tobacco regulations
There are also extraneous charges and fees that you’re required to pay for import duty, and GST. Again, these vary on which price and goods brackets your products fall under, but if you import anything worth over $1,000 you will have to pay 10% GST of the final amount.
Make sure you’re aware of how much you owe by checking on the customs section of the Australian border website.
Do: be aware of your products’ requirements
There are certain rules for the riskier products which you’re importing. If you bring live animals, plants, minerals or human products over, for example, they will need to be quarantined and treated for diseases. Here’s a list of the steps you’ll need to follow.
Don’t: bring in illegal goods
This may be an obvious one, but if you’re importing certain foods, narcotics, chemicals, weapons or tobacco, you may require a permit or prohibited from importing altogether. Here’s a complete list of items which are restricted from entering into Australia from overseas.
Don’t: overlook your payment provider
Paying your supplier can be more costly than you think if you go through the wrong financial institution. A lot of banks and payment service providers whack on a hefty transaction fee which is much more than the exchange rate without notifying you.
More importantly, you need to ensure the payment provider you use is safe and is good at dealing with higher-risk countries such as China. The last thing you want is for your money to end up in the wrong hands.
Don’t: be put off by the process
While it can be a long process, importing your goods pays off in the long run, and doing the initial research can save a lot of time in the future. Domestic markets can’t always be relied on, and with trade links becoming more open, there’s no better time to import from overseas.