Pitfalls with Importing - What don't I know?

[skater]

I'm looking at importing something. Not looking at large quanities. So....I'm trying to get a grip around how much it's going to cost to get stuff into Australia and any pitfalls for a novice like me.

I have found out that if what I purchase comes in at less than $1000AUD there are no fees. Is that a total of $1000, or does that include the shipping costs? I'm not sure yet. This is only true if the item is sent through the postal system of the country of origin. If it comes by ship, then you need to pay a fee to get it off the docks. I've been quoted around $300-$400 based on square metreage. Is that correct?

Now, if what I bring in is popular and I need to bring in amounts over $1000, then whether it comes by post or sea, then I've got to pay around 15% in duties plus the square metreage and a customs brokers' fee.

Does all that sound correct?

So, if my product costs around $40, and I'm bringing in 20 of them the costs would be something like this:

Costs for 20 items

$40 x 20 = $800
Shipping $400 Expensive because it's by post, but no docks fee.
Total cost $1200

$60 each.

Costs for 200 items

$40 x 200 + $8000
Shipping $400 Cheap because it's sent by sea.
Docks Fee $4000
Duties $1260 15% of total of goods plus shipping
Total Cost $13660

OR $68.30 each. I haven't allowed for a customs broker here as I don't know how much they cost.

Have I got that right? Or am I missing something? This is doing my head in.

 

[shuggy]

Have I got that right? Or am I missing something? This is doing my head in.

You need to do more research.. start by picking up the phone and contacting a freight forwarder who will set you straight.

 

[Intrinsic_Value]

So, if my product costs around $40, and I'm bringing in 20 of them the costs would be something like this:

Costs for 20 items

$40 x 20 = $800
Shipping $400 Expensive because it's by post, but no docks fee.
Total cost $1200

$60 each.

Costs for 200 items

$40 x 200 + $8000
Shipping $400 Cheap because it's sent by sea.
Docks Fee $4000
Duties $1260 15% of total of goods plus shipping
Total Cost $13660

OR $68.30 each. I haven't allowed for a customs broker here as I don't know how much they cost.

Have I got that right? Or am I missing something? This is doing my head in.

i am not sure of the accuaracy of your figures (i dont know, i have no business interests in this area).

but some points stick out:
(a) dock fee $4000
(b) duties $1260

so why are these fees payable on a larger amount, yet not payable on amounts under $1000.

This is the case i have been trying to present why the current set up can't last.

This is economic extortion, larger imports should see a drop in unit costs because of volume.

And people wonder why the whole retail sector is screaming (and we have yet to place local based GST on the final price, which you will be paying if you import it and then sell locally in australia).

Assuming you sell at cost price and make no profit your $68 becomes $68+10%= $74.80.

Now lets take it to the next step, you do the hard work, you make a market for your product, you are making no profit (actually you would be making a loss because there would be cost of doing business), but lets keep this excercise simple.

So you get that market for your product, you sell at no profit, and you sell for $74.80.

Some wise guys sees you selling stuff, starts promoting it directly over the internet, their cost base $60. Profit for them, no profit for you.

 

[shuggy]

but some points stick out:
(a) dock fee $4000
(b) duties $1260

so why are these fees payable on a larger amount, yet not payable on amounts under $1000.

The dock fee is only payable when sent by sea, not air.
Duties are applicable on parcels with a declared or assessed value >$1k.

This is economic extortion, larger imports should see a drop in unit costs because of volume.

They do see a drop in unit price, it's just that skater hasn't negotiated this yet.

Sea freight has no weight limit, it's all based on volume, i.e. a 40' container sent FOB from Ningbo to Sydney is USD1200-1500 regardless if it contains air or lead. Prices are charged per cubic metre, not square metre. A freight forwarder will arrange splitting a container with others so you only pay per m3 if you can't fill a container yourself. They will also take care of duties, fumigation, clearance and storage until you can transport them out the yard.

 

[skater]

You need to do more research.. start by picking up the phone and contacting a freight forwarder who will set you straight.

I've rung many so far. The answers are not all the same. I thought I might get some sanity by seeing if any SSers had done this and could point me in the right direction.

 

[Ocean Architect]

Last time I did this sort of stuff, my understanding was that if the goods plus the cost of freight exceed $1000, duties apply and you pay tax on the entire amount (goods plus freight).

If the goods plus freight are less, obviously you don't pay tax.

In the case of shipping, the cost is goods plus freight plus release fees at the docks, with the taxable amount being the same as for air parcels.

Other taxes and duties apply depending on the nature of the goods (eg vehicles) and I'm pretty sure there's something in there about business vs personal use, which is why everything I buy always seems to have "gift" written on the description.

Anyway, good luck

 

[skater]

They do see a drop in unit price, it's just that skater hasn't negotiated this yet.

Sea freight has no weight limit, it's all based on volume, i.e. a 40' container sent FOB from Ningbo to Sydney is USD1200-1500 regardless if it contains air or lead. Prices are charged per cubic metre, not square metre. A freight forwarder will arrange splitting a container with others so you only pay per m3 if you can't fill a container yourself. They will also take care of duties, fumigation, clearance and storage until you can transport them out the yard.

Maybe you could have said this, instead of telling me to ring yet another frieght forwarder.

Sheesh! It's obvious that I've never done it before. So, I got my square metres confused with cubic metres. This is why I was asking.

So, based on what you have said my costs would look something like this:

Item cost $40
Shipping?? my portion of the container
Dock fee??? Is that included in the container price, or is that extra?
Duties - 15% of total of item cost plus the shipping??

 

[Aaron_C]

Skater,

It all depends on what you are importing. As the others have said, anything with a value over $1,000 (excl shipping costs) will be immediately taxable with duties and GST.

The level of duties/tariffs will depend on what the actual thing you are importing is. See this website to see the level of tariffs: http://www.customs.gov.au/tariff/tariff2012.asp

Most important thing with importing is quality control, especially from China. They are notorious for trying to cheat you so you need someone on the ground to check the container before it is sent here.

 

[Rolf Latham]

tis what we dont know that we dont know

that we need to be careful of

ta
rolf

 

[skater]

Skater,

It all depends on what you are importing. As the others have said, anything with a value over $1,000 (excl shipping costs) will be immediately taxable with duties and GST.

The level of duties/tariffs will depend on what the actual thing you are importing is. See this website to see the level of tariffs: http://www.customs.gov.au/tariff/tariff2012.asp

Most important thing with importing is quality control, especially from China. They are notorious for trying to cheat you so you need someone on the ground to check the container before it is sent here.

I am aware of the $1000 exemption. I am aware of the duties applicable. I am just wondering if there is anything else I am not aware of.

I have also had samples shipped to me from the supplier.

 

[skater]

tis what we dont know that we dont know

that we need to be careful of

ta
rolf

Precisely!

As the title of thread says "What don't I know?"

 

[Aaron_C]

I am aware of the $1000 exemption. I am aware of the duties applicable. I am just wondering if there is anything else I am not aware of.

I have also had samples shipped to me from the supplier.

Well there are the rules in Australia against parallel importing. Does that apply to you?

 

[Piston Broke]

I think you would be better off with small quantities and ordering more often.
I gives more flexibility and it takes much less time and fiddling.
Unless your bringing in large quantities in shipping containers (you may be stuck with a lot of stock).
I went through the same process bringing in a few hundred kg from the USA, and the amount of people, processes and fees was just stupid.
I would suggest build you business slowly, patiently expand your range and replenish with smaller orders more often.

 

[Ideo]

Be careful about the smaller orders though.

If someone is paying attention at customes (unlikely but possible) they may give you grief over it.

 

[Piston Broke]

Over 10 years i never got greif and customs always opened and checked my parcels.
Of course i did not have 10 orders of $980 in 10 weeks, but rarely needed to anyway.
I was just bringing in a few products at a much better price than the locals.
Their is no duty from the USA, only GST on orders over $1k.
Parallel importing is not across the board and trademarks and copyright can restrict importation of certain goods.

 

[Ideo]

Over 10 years i never got greif and customs always opened and checked my parcels.
Of course i did not have 10 orders of $980 in 10 weeks, but rarely needed to anyway.
I was just bringing in a few products at a much better price than the locals.
Their is no duty from the USA, only GST on orders over $1k.
Parallel importing is not across the board and trademarks and copyright can restrict importation of certain goods.

Yeah - should have said it more like that!

It all depends on frequency.

 

[Edge7]

Maybe you could have said this, instead of telling me to ring yet another frieght forwarder.

Sheesh! It's obvious that I've never done it before. So, I got my square metres confused with cubic metres. This is why I was asking.

So, based on what you have said my costs would look something like this:

Item cost $40
Shipping?? my portion of the container
Dock fee??? Is that included in the container price, or is that extra?
Duties - 15% of total of item cost plus the shipping??

This takes me back to my first job out of school in the shipping industry. Skater, i think your best off forgetting the breakdown of fees and turn your transport cost into a commodity.

ie Re-contact the freight forwarders you have called and ask for their cubic metre rate / LCL (less than container load) rate to ship your goods from the origin to your door/warehouse.

The freight forwarders will be able to confirm total cost along with duties etc and also give you options on transit times and frequency of shipment from that port.

Best of luck with it.

 

[skater]

This takes me back to my first job out of school in the shipping industry. Skater, i think your best off forgetting the breakdown of fees and turn your transport cost into a commodity.

ie Re-contact the freight forwarders you have called and ask for their cubic metre rate / LCL (less than container load) rate to ship your goods from the origin to your door/warehouse.

The freight forwarders will be able to confirm total cost along with duties etc and also give you options on transit times and frequency of shipment from that port.

Best of luck with it.

Thankyou Edge.

Another forumite has put me in touch with someone they use, who was very helpful indeed and that is what they have done.

All I have to say is that there are a heap of forwarders that are not very helpful at all or massively expensive. Some actually got me a very rough price that was astronomical. Much more expensive than having stuff sent in small amounts using the postal system in fact. While others fobbed me off completely.

 

[cu@thetop]

tis what we dont know that we dont know

that we need to be careful of

ta
rolf

Ain't that the truth.

http://www.youtube.com/watch?v=GiPe1OiKQuk&feature=related

 

[BMan]

im interested in importing aswell but like you have said the freight forwarders just dont want to waste there time with someone who isnt going to import a heap
i gave up as i dont know much about it and all the duties etc went over my head