International trade is anything but easy. If importing and exporting were easy, there would be more individuals doing it; but it is still a very lucrative venture for anyone willing to do the work and do it well. Ask anyone that has imported or exported anything before and they will tell you that the process is often filled with unexpected challenges. Fortunately, a large number of these challenges can be avoided as long as the individual that is doing the importing and exporting carries out their research.
The biggest mistakes when importing and exporting
Lack of knowledge about the exchange rates
If you do not expose yourself to the exchange rates when trading internationally, it can prevent you from making plans properly. Exchange rates are usually impacted by currency fluctuations, which can be restrictive when trying to prepare your budget or look for the best prices on your cargo.
Before you consider importing or exporting, consider talking to your freight forwarder so that you can receive the best advice to lock in your profit. Furthermore, a freight forwarder should be able to help you get accurate freight forwarding quote pricing. If you find all this too difficult to handle, consider only buying and selling in dollars, that way it can be easier to keep up with all the imminent fluctuations.
Lack of research and knowledge regarding the importing and exporting process
Lack of research regarding the regulations and the documentation required for the destination country can end up costing you dearly. International countries usually have specific requirements and the laws and rules are not the same across the board. Therefore, whenever you are planning to import or export, it is essential to do a bit of research to confirm whether your products satisfy the set out regulations or not.
It is also a good idea to familiarize yourself with the various terms and documentation used commonly when importing or exporting so that you can have a firm understanding of what is expected, as well as what to anticipate. Your customs official, freight forwarder or the chamber of commerce of the destination country should be able to provide relevant information to help.
Please understand that learning what the rules are is imperative because it can prevent an instance whereby your products are shipped across the ocean only for them not to be unloaded because you failed to pay attention to the specific regulations of the destination country.
Poor record keeping
Records are a vital part of every successful business model and they are even more essential when conducting international trade. Every single step of your importing or exporting should be recorded because it will make sure that the process runs efficiently and smoothly. In unexpected instances, records that are up to date and well maintained can prove handy.
For example, if your goods should get lost or damaged in one way or another, the insurer will ask for accurate records in order to be reimbursed. If you import or export on a regular basis, you should make it a habit to maintain and file every transaction that you make.
Poor verification procedures
If you are ordering cargo to sell here at home, do not mistakenly assume that every online retailer is an honest one. Many e-commerce shops make a living out of fraudulent activities. If you do not carry out due diligence on your suppliers and buyers, you could land yourself into some serious trouble.
Whenever you are considering a supplier, carry out your investigation through a simple online search to see what comes up. If the seller has a website, ensure that you verify and assess the website for authenticity. Look up customer reviews, social media activity, as well as how long the seller has been operational before you pay for anything.
Bribing when importing and exporting
If you are conducting business in any foreign market, it is important to comply with all the standards and regulations. It is understandable that in certain target markets, getting customs clearance might be hard unless you bribe someone. However, it would be prudent to avoid it at all costs. Bribery attracts hefty penalties and can result in serious legal action if you should be found out.
Not preparing customs documents properly
Customs documents such as bills of lading and certificates of quality are important and must be completed correctly, in a clean manner, and they must be presented properly. Do not fill out these documents when you are in a hurry as it could result in costly mistakes. Overlooking certain things or filling incorrect or illegible information can cause your cargo to be placed in the orange channel.
What this basically means is that customs will hold your goods so that they can review your documents or until the correct information can be processed. The wait might be long and could possible take days; if your cargo is time-sensitive, it can spell disaster for you.
Failure to conform to packaging laws
Make sure that you consult with your freight forwarder and then compare notes to make certain that your cargo conforms to the packaging laws of the destination country. For example, some countries require that you label the cargo in the local language, while others require only the use if sturdy cartons. Additionally, your cargo may need to be marked on the outside to comply with the law. When importing or exporting, you should leave no stone unturned.
Avoiding common mistakes when importing or exporting can help you build a successful business. It is all a matter of self discipline, as well as asking for help from a reliable freight forwarder when you need it the most. Contact us today to avoid these costly mistakes.