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Guide to importing

What you need to know about importing

From cost savings to competitive advantages, here are 5 reasons why importing could be a good idea.

5 reasons to start importing

Importing could help your business save money, increase profit and gain a competitive advantage. Here’s why.

1. Lower priced products and materials

Because of lower employee and manufacturing costs, many countries can produce goods at a lower price than UK manufacturers. Importing these cheaper goods could help you keep costs down and improve your profit margin.

2. Specialist or authentic products

Sourcing products or materials from a country that specialises in them could give you a competitive edge in the domestic market.

3. Be the first to market

By expanding your suppliers to include those from outside the UK, you could benefit from access to a wider, newer range of products. Many businesses benefit from bringing in unique goods and being the first to market with them in the UK.

4. Support from the specialists

From customs tariff codes and duties, to foreign exchange risks and documentation, importing can seem a daunting task. That’s why many businesses opt for specialists like freight forwarders and import agents who can take on the logistics and paperwork. Remember that you don’t have to do it all yourself.

5. Expert help is at hand

Our International Managers have years of experience1 in guiding their customers successfully through importing. UK Trade and Investment team and the British Chambers of Commerce also have advisers who can provide valuable support.

Common importing issues

In many ways, the problems you can run into with importing are the same you face doing business in the UK – being let down by suppliers, delivery issues, cashflow concerns, payment delays, etc.

The difference is that sorting these issues out will be more difficult with importing – and more expensive. That’s why it’s best to give proper consideration to the importing issues you face.

  • The right suppliers are crucial to successful importing. To avoid being caught out by an unreliable or problematic supplier, make sure that you find out as much about them as you can through business contacts, foreign Chambers of Commerce, the UKTI, trade associations and overseas agents.

    Taking steps to help reduce your risk can include getting more insight into your suppliers’ creditworthiness by asking for references from their bank or a credit-reference agency, and making sure you have the right insurance. Barclays Business Abroad can help.

    If it’s possible, visiting potential suppliers is always recommended. Meeting face to face helps you to assess their products’ quality and suitability, as well as get a measure of how they do business.

  • The further your supplies have to travel, and the more fragile they are, the greater risk they could be damaged by the time they reach you. Or they may not reach you at all.

    Insurance is vital in protecting your business from delivery problems, as is having a contract in place that covers the responsibility of each transport stage. Barclays Business Abroad can help.

  • Forecasting your cashflow is important when importing so you don’t run out of ready finance. You will typically experience longer periods between paying suppliers and getting money from your customers. and for most imports from outside the EU you’ll need to pay VAT when they reach the UK, .

  • You should avoid paying international suppliers in advance because you risk not having your supplies show up. And if they’re damaged, trying to recoup your money could be both time-consuming and expensive.

    Make sure you protect your business interests by agreeing to beneficial payment terms. For example, if you’re importing from Europe it’s relatively common for suppliers to offer credit in the same way they do here.

  • Until you start importing, it can be easy to underestimate how much exchange rate fluctuations can affect the price you pay for your supplies.

    To avoid this, you could trade only in sterling, although many suppliers will increase their prices to reflect their risks. Alternatively, you can open a currency account to help with trading in the local currency. Our International Trade Managers can guide you on the most appropriate solution for your business.

  • Make sure that in the excitement of sourcing materials or products at unexpectedly low prices, you don’t forget all of the extra costs involved in importing – transport, insurance, import duties and taxes. These extra costs can significantly increase the overall cost of importing goods, which could end up being less profitable than you first anticipated.

  • Before you start importing, consider just how involved you want to be – and how much time, money and effort you want to commit to it. Would it be more cost-effective to use a freight forwarder to handle the logistics and paperwork rather than do it yourself? What about using an import agent? It means less direct profit, but ultimately it could be more cost-effective to use experienced third parties than to do everything yourself.

  • Rather than dive right in to placing big orders, it’s best to start importing with a small order – or even to request product samples. This way you can see first-hand your supplier’s efficiency and the product’s suitability and see if there are any areas that need consideration before you take on bigger orders.

Find an International Manager

Our team of International Managers covers the UK, providing businesses with expert support and guidance on trading overseas.

Other services that may interest you

Make and receive secure payments around the world

A collection2 is a simple and efficient tool for settling your trade debts. It can be used to make payments of any size and in any freely traded currency.

A secure way to pay your suppliers

With a letter of credit, you can pay for the goods you import while covering your trading risks2.

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