Saving on Imports

Tips for Saving on Imports

One of the main objectives for a company when deciding on importing products from Asia is to obtain cost savings, which is a competitive advantage that, jointly with an adequate sales strategy, will allow the business to improve its financial performance.  Nevertheless, to import goods from Asia is a complex process that often is not optimized, hence this post highlighting some tips on how to generate savings while importing from China or other Asian countries.

It is important to note that, even though cost control is crucial in purchasing, it is wise to prioritize the factors in which not to reduce expenses, as to avoid some of the typical issues when importing.

Plan Well Ahead your Import Process

Sometimes we forget that the most obvious tips are also the most practical ones.  When managing a business, decisions cannot be taken in a hurry and even less so, at the very last moment.  When managing an import process from Asia, this fact is even more obvious, since the time gap between the order date and delivery date will depend on multiple factors, many of which we are not able to control.  Hence, planning when products will be needed is one of the key points in order to avoid extra costs derived from acting in a hurry (last minute charges and/or shipments always make an import operation much more expensive).

International Purchasing = International Calendars!

Imports are international purchases and, as such, they are influenced by calendars in two (or more) countries. In that sense, beyond all the planning we do in the context of our company, we will have to consider also holidays and other calendar inputs in the additional countries.

For instance, if we wish to manage an import operation for products made in China, it will be crucial to take also into account that during Chinese New Year (usually in the first two months of the year, but never on the same dates in subsequent years, since it depends on the lunar calendar) for nearly three or four weeks industrial activity in the country will be drastically reduced.

Other important dates are the Mid-Autumn Festival, the Dragon Boat Festival and the Chinese National Day (1 October), all of which might have a substantial impact on our import plans.

Choosing the Right Supplier

We return here to some of the tips highlighted in one of our classic blog posts: how to correctly select our suppliers.

When we think of international purchases, we tend to see supplier selection as the first step to be taken. Although this is not entirely true, it is correct to see it is one of the most important steps, because the success (or failure) of our import operation will depend on it.

Choosing a supplier without the use of an intermediary is surely one of the best ways (at first sight) to achieve savings in our import operations. Nevertheless, for many companies such a move would imply a number of additional risks, like communication problems, the lack of quality control, etc., all of which might considerably increase the purchase price.

Additionally, it is relevant to highlight that we should never select a supplier solely based on price. It is critical to understand the manufacturer’s experience in our field, as well as their work commitment and the quality of the goods produced.

Logistics and Customs

All the expenses linked to the shipping of the goods tend to be one of the main causes of concern for the companies involved in international purchasing.  Apart from not knowing how to precisely calculate import-related transport costs, also the fear of serious delays converts the shipping process into one of the most delicate phases in the operation.

As with any other shipping initiative, both the number of units as their respective dimensions will be some of the main factors to determine the shipping cost. On top of that, the choice between full container loads (FCL) or shared containers (LCL, i.e., Less-than-Container Load) will equally cause a substantial variation in the price to be paid for the shipment from country of origin to country of destination.

Additionally, it is worthwhile to consider the potential issues with Customs, since often the import operation implies the payment of import duties and/or other taxes, an aspect regularly overlooked by companies planning their sourcing strategy, leading to important increases in the final import cost.

Count on an integral import service and obtain real savings!

Contrary to what is often assumed, when choosing an integral import service major savings can be obtained in sourcing operations.

Even though, logically, a sourcing agent will charge us their fees for the job done, the reality is that their wide experience in these tasks will help us to achieve much more competitive conditions in all the different steps of the import process.

In that sense, in S3 Group we have been working for over 18 years in imports from different countries, offering our customers a sourcing service that covers their needs, whether that is an integral import service or specific tasks linked to imports, like supplier selection, quality control, etc.  In all these cases, we strive to help our customers at all types of businesses to obtain real savings in import costs and making them more competitive in the market.