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Ask the Experts: Lawrie Elwell

Importing/Sourcing Expert

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Lawrie Elwell has been helping clients source absolutely anything from the Far East for over 7 years. Lawrie handles as much of the process as clients need, from finding suitable companies, to checking samples, ensuring a fair price, inspection, shipping, duty, everything for delivery to the clients premises.

If you need any help or advice with sourcing products from overseas please ask Lawrie.

www.productsourcingservices.co.uk

01902 336 919

1. Hello, I am looking to start a small Italian clothing, dry goods, and home retail products in the US and I would appreciate any guidence/suggestions that you can offer regarding importing guidelines, restrictions, and documention needed. I would like to import direct from Italy, and would start out purchasing stock in Italy...are there any legal restrictions to this? Thank you, Emily Question from Emily Green on 21/06/2010

   Lawrie says:

   Hi Emily,
   
   Thank you for the question. In general terms, most countries like international trade, and will do what they can to allow it, however it is also a good way to raise money by taxing it, and occasionally quotas are put on items, to try and protect certain industries.
   
   That said, I don't think clothing made in Italy, or dry goods are going to be causing you any problems. Certainly not in Exporting them.
   
   Paperwork wise, then shippers are the ones to talk to who will say what they want, and it usually is going to be an invoice from the manufacturer and a packing list to cover what is there, and howmany boxes etc. The two other aspects are knowing the goods classificaton, and duty levels for what Tax the US Government is going to charge. These are different in Europe to USA, so pointless me saying what ours are, but your local USA chamber of commerce will let you know how to find that, and at the same time, if there is a quota - which I don't think there is for your items - then it will be assocaited with the duty level and number.
   
   So in summary, there is no problem exporting these items from Europe, the shipper will handle taxes and duty for you, all they probably need is an Invoice and shipping list, though have a chat with the shipper to check in case the items have some none usual need, and all will be fine. Find out the total space the shipment will take (minimium 2 cubic metres) and get perhaps 3 or 4 quotes from different shippers to get a fair price, and it should be fairly plain sailing.
   
   Drop me an e-mail if I can be of more help.
   
   Kind regards
   
   Lawrie

2. Hi, I have started a new General Tradind business in Dubai, UAE, I like to import readymade garments from Bangladesh and Chaina for retail sale and supply to other business houses, I am also interested for Ladis wears and accessories. I shall open few outlets for selling the goods. Would you please let me know the formalities, i.e. wheather I need any Import Lisence or any other permission from the authority of Dubai. If so please let me knkow types of documents and relevant requirements. Thanks & regards, Kamal Question from kamal ahmed on 18/06/2010

   Lawrie says:

   Hi Karmal,
   
   Being as UAE does not make clothing, then I do not think there will be any quotas or restrictions in bringing these in to Dubai, however there are 3 things I would advise you to do.
   
   1) Get a quote from a shipper to bring things over, and check with them if they are aware of any issues, and also check with the local Chamber of commerce. There may not be any restrictions, but there may well be some taxes to pay on importing, so best to know those in advance.
   
   2) I only bother to get inspected what I cannot afford to have wrong. Being as I cannot afford to get anything wrong, then I inspect everything. You need to ensure before the goods sail to you, that you know they are right. Nobody ever gives you your money back, so either you fly over to check yourself, or get someone else to inspect, and know what they need to inspect. It may be a lot of hassle, but much less hassle than having goods arrive that are poorly made or wrong.
   
   3) Style is very personal. Make sure that what you are getting will sell. There are many people who buy in much clothing, only to find out it is not as popular as they thought. Do trials if you can, maybe a smaller order, even if you make no profit, just to try it out. Maybe the styles are the same as other peoples, so there is little risk, but clothing is an area where businees fail as they have too much stock that did not sell, and so all their cash is tied up, and they cannot afford more of the stock which does sell.
   
   As for ducmentation, then Invoice and Packing list are the standard items needed which the manufactuer will give you.
   
   Any other issues, then drop me an e-mail if I can help.
   
   
   Kind regards
   
   Lawrie

3. Hi, Mr. Elwell, I understand that you are looking for far east manufacturer of beer towers, and we have been in this field since 2000. We'd like to take this opportunity to introduce our company and products for you. If you still in need for such products, pls feel free to contact us and we'd like to send our catalogue for reference. Looking forwared to your early reply! Michael Question from Michael Xie on 18/06/2010

   Lawrie says:

   Hi Michael,
   
   Gosh those beer towers were wanted perhaps 5 years ago now. Nothing else has been needed in that line since, and the client changed how they were doing things so they no longer buy them in.
   
   Sorry.
   
   
   Kind regards
   
   Lawrie

4. Hello Mr. Lawrie, Im looking to setup a trading company in saudi arabia in order to cater to the needs of the industrial sector which comprises of petrochemical , oil and gas. In order to setup a trading company what are the requirements that needs to be fulfilled by an expat company. For eg: Do you need a local sponsor/partner? . Can your company be fully 100% expat owned? licenses etc etc Thank you Sunil Question from sunil prabhu on 16/06/2010

   Lawrie says:

   Hi Sunil,
   
   I will answer the question in a different way. Assuming you are not in Saudi Arabia (hense you ask about it being owned by an expat) then I would ask why you need a company there. If you are in another country, and you are selling to companies in Saudi, then why do you need a business there ? You can advertise, you can supply, you can visit, but nothing says why you need a trading company. As your clients are probably completley happy paying you where ever you are if the value and service is right.
   
   I deal already to the Gulf, and see no need to have a company there.
   
   However, business is all about relationships, and in the Gulf it is no different, Having a local contact there and someone who can get enqurieis and handle those, then that is needed, but the main customers will put out a tender to maybe 6 - 8 companies, and they will use people they know already, so to set up new, when you focus in a key area is hard. I would be tempted to say try and come to an arrangement with an existing trading company who already has the right contacts, and see if you can supply them with the items. I think they will typically charge 10% margin, but often that may well be less cost than you setting up an office over there.
   
   But in direct answer then yes, it is my understanding you do need some partner there, but the Saudi Chamber of Commerce is going to be the easiest way to get the exact details, though I question if just setting up is the best solution to get a fast result.
   
   Drop me an e-mail if I can be of further help.
   
   Kind regards
   
   Lawrie.

5. Hi am looking to start a small import business to south Africa of dry food and fresh from west Africa with the view to expand, I would like to know what I need to do in order to set this up, I feel I may need an import licence. I hope this is possible as there is a market for this to meet the needs of the immigrants over there. Thank you miss odepidan Question from siyanbola odepidan on 17/04/2010

   Lawrie says:

   Hi Miss Odepidan,
   
   Thank you for your question. This new business covers three risky areas. New suppliers, new customers, and unknown regulations. My feeling is that to just start up something when you are new to all three aspects is quite risky, but perhaps you already have clients, and have people who can reccomend suppliers to you. My feeling is that most people are sure something will work, without trying it, and though they may get things to work out right, often it is doing things dfferently to what they thought.
   
   If we just explian the logic of taxes first, few countries mind people exporting things, as this is new money coming into the country, but most countries tax goods coming in, as a way both to raise money - because they can, and as a way to increase the cost, to give their own domestic suppliers a better chance of a sale. Also they want to ensure someone else does not 'dump' goods, which effects their internal market. Therefore, you can be sure that South Africa will look at taxing things, unless it is a food they are really short of.
   
   The Chambers of Commerce should be able to tell you what the taxes are, and also if there are licences that you need, or permits. However, one of the key difficulties here is not what the law says, but how customs work. You may need to buy a permit (import tax) but also the border guards may well expect payment as well, in cash if you understand my meaning. The key point is that if you do not know, and do not plan for it, then fresh goods can go bad if they hold up the shipment. There is both what the law say, and how things really work.
   
   My suggestion is to visit the Chambers of Commerce, both for South Africa, and check for any countries you are also traveling through to know what the law say, and then start talking to the shippers, talk to the growers, talk to trucking companies, and anyone who might do the job for you. What is good is to try and buy the goods delivered to South Africa, with a final payment when the goods do arrive. May be buy off someone who delivers to a different part of South Africa, so you do not compete but help him buy better by adding your order to theirs.
   
   Ask for references of anyone, and call them up. You want to find someone who knows how the game is played is honest when things go wrong, and will quote you for the goods all delivered. If the references are not ideal, or seem too close to the company, find someone else, or ask for more. Once you have someone who can do it, then over 4 - 5 shipments, you will get to know what is involved by their comments, and can then look to do things more yourself if you wish.
   
   If we look at what you say about the business, then probably the least important bit is the shipping, so get someone else to do it all for you. Buy the goods, but pay for the shipping when the goods arrive, and have in writing what you will have to pay, and what taxes are not included. Then you can fairly spend your time on the sales (which is probably most important) or on getting the right suppliers. My feeling is that you cannot do good business with bad people, and relationships are key. Build good relationships with people you feel comfortable working with.
   
   Shipping and importing can be really involved, and easy to make mistakes which can cost you. So if it were my business, I would use other people to do that first, while I spent time on the more crucual aspect, which is probably getting the goods sold,
   
   If I misunderstand, then please drop me back an e-mail.
   
   Kind regards
   
   Lawrie

6. jayshukla asks - 'Doing business in India is tough to secure trade finance without adequate collateral, How to over come that? Is there any international agencies those provide seed capital to start up business in India? If there is any such agency please do provide me the criteria of obtaining finance and contact details Problem with Indian exporters even after signing the contract, as well opening the L.C. if the prices of commodities rises during pre- shipment tenure, they do not make shipment and do not honour the contract. How to combat that?? How to Black list an exporter who has not shipped the goods after receivingthe LC?' Question from Lawrie Elwell on 26/03/2010

   Lawrie says:

   Dear jayshukla,
   
   Thank you for your question, you raise the age old issue that you could make loads of money, if only you had more to start with, so where can it come from ? In fairness, I think it honest to say raising money from people you do not know, or with out a track record is very difficult. But then if you are starting an operation in India or anywhere, then it is reasonable to expect to put some cash in from here, and then matched funding / overdraught facilities become possible locally. Once you have a track record, and some local relationships, then you should be able to have it all self financing. Depending upon your size, if you are offering a large factory, with loads of jobs, then regions may help in various ways to incentivise you to set up where they are, but unless you are a world brand, then all would expect some contribution from you.
   
   If you are back to you trying to raise money for an overseas venture, then relationships are key. Your existing bank etc, know you and if your plans show clear additional profit and they have seen how you deliver on previous plans, they should help you. They may tie it in to your existing business guarantees, but I see that as reasonable.
   
   As for financing products, then we need to differentiate between new and existing business. Most things never work, most plans never get delivered, and so to get someone else's cash for a new venture you think should work is correctly difficult. But then as most things never work as people expect them, why should someone else risk cash on the law of failures. However if you are already selling, and looking to either set up in India, or change supply to India, then it is reasonable to raise cash for it. The driving force will of course be greater profit (otherwise why change from where you buy or make now) and so there is additional profit to pay for financing. Again the existing bank or money source should be your first point of call, or there are people who will finance stock, or of course invoice financing. I find many people try to start off big, and are frustrated in not getting help. It is better to do things slowly, get the right things working right, prove it all works, and then expand. Not surprisingly, doing it that way, people are more likely to help you, as matters have been refined and risk reduced.
   
   Now we come to agreements and getting what we expect. Most profit in business, is earned on repeat orders, and so I find steering clear of one off's is good practice as there is great risk, so where there will be repeat orders, there is less benefit in you being ripped off. I believe that you should only get inspected what you want to ensure is correct, and so as probably everyone wants items to be correct, then everyone should inspect, and be seen to inspect. I think everyone knows not to pay the whole amount until after inspection, and so only a fool will make rubbish they know is going to be inspected and be found out before payment. Pay someone to inspect, and agree with the factory just what you are going to inspect. As well agree what will be the cost if the goods fail (how fast to be remade, who pays for reinspection etc) and what happens if the commodity price moves.
   
   As a sourcing company dealing with anything, I always have to think over what to do to ensure we get what we expect, and that there are no surprises, but where you are dealing with a product you already know, then most of what I am saying here is fairly obvious.
   
   Finally what if it goes wrong you ask ? Well, generally the clients I talk to where it has happened, tell me they could see the warning signs, but they just ignored them. Maybe they didn't take up references, maybe the price was too cheap, perhaps inspection didn't happen, or no samples were agreed or used as a standard. There are rogues out there, and it always makes sense to do back ground searches on phone numbers and addresses just to make sure people are who they say they are, but if you do get caught, then you can talk to the authorities by all means, but your chances of getting something back is small. Work harder to not get caught in the first place, or if you are still concerned, get help from people like me who do it all the time.