Once your communication and trust is built to a suitable level with your supplier, it is now the moment to test that trust by ordering a small quantity order with a few of the products you intend to sell.
Small Quantity Assurance
Suppliers normally have a minimum quantity as suggested earlier that you would need to abide by when trading with them.
As a new buyer and future business partner to your supplier, you’ll be able to purchase a small quantity of products to test and observe the quality, functionality and detail of the product in order to make a better and final choice before placing a large order to stock up for your business and before committing to and investing in the product.
It is not uncommon to order small quantity orders from multiple suppliers at any one time to compare products across the board of suppliers. This practice is recommended if you have many suppliers to choose from and they all seem like great prospects and as a result a final decision is hard to make.
Payment Methods for your First Order
When ordering your first sample order you’ll be asked to make a payment using a few common methods. The most common method is a TT or telegraphic transfer. This is simply an overseas transfer of funds directly into your supplier’s account. You’ll be provided with the supplier’s bank account details along with the special Swift number which banks use to identify your suppliers bank overseas.
If you have access or are familiar with online banking, then this transfer can quite easily be done even from the comfort of your own home.
Another common method of payment certain suppliers overseas can offer is through the international institution called Western Union. The company provides an international money transfer service that is used globally, adopted in many online transactions. More information can be found on their website at www.westernunion.com.au.
Fees are charged for the service and you will be contacted prior to each transaction for complete verification.
This can at times become frustrating if you already know your supplier and trust them; however it is a safety precaution and is there to protect you.
While not common but growing, some suppliers even allow you to pay via PayPal which is probably the fastest and most convenient payment method. You will incur fees for the extra convenience and find that if using the PayPal method, your supplier may charge you for the fees by adding the extra costs to your grand total.
If you don’t have any online banking or PayPal account set up, then by simply visiting your local bank branch and taking your supplier’s bank details, you’ll be able to initiate international or telegraphic transfer straight over the counter.
Receiving the Final Invoice Prior to Payment
Before any payments are made, you’ll need the supplier to send you your final tax invoice or ‘’ as it is usually called in certain countries, in order for you to know what the total cost is including shipping fees.
Your invoice will more than likely be sent to your inbox or through your messaging software like MSN or Skype as a spreadsheet (.xls) word document (.doc) or PDF document (.pdf).
Once you find your total amount, you’ll notice that most of the time the currency listed in the invoice is shown different to your own. This is because your supplier will provide your invoice with a total in their own currency, so all you’ll need to do is use a converter to convert this to your own currency and provide you a better idea of what you are up for in your own currency. Most online banking facilities and branches automatically convert this for you when transferring funds to your supplier.
The most common currency used and that you’ll come across when dealing with your supplier is the United States currency or USD.
If you are dealing with the Chinese supplier and suppliers from Asian countries, some do use the Chinese Renminbi currency or RMB. Now you may ask yourself ‘how on earth do I convert this to my local currency?’ Well, to do that you’ll need to simply visit a popular currency converter online that is free of charge and that provides results quite quickly.
Waiting for Your First Order
Once the order is paid for by a transfer, you can then relax a while until your first sample order makes its way to you.
This certainly is an exciting time in the establishment of your import business, however, you may be feeling a little anxious in your parcel’s delivery so in order to ease your nerves a little, make sure you have your supplier provide you with a tracking number so you can track the progress of your order. Most suppliers provide this automatically, but it’s good to ask for if they don’t.
When you initially receive your tracking number please allow about 48 hours until you commence tracking the number yourself as it normally requires this amount time to register into the shipping company’s system.
Deciding to Import by Air or Sea.
In order to determine whether your product is more viable if delivered by air or by sea, you’ll need to examine and compare costs involved in both air and sea freight. By sending your products by air, you have huge advantages such as faster speeds in arrival and the added complementary service of having your product cleared through customs by your carrier on your behalf. So naturally because of these conveniences, delivery by air freight can be very costly.
Indeed there are certain products that can make you a decent profit margin even when shipping them by express air carriers such as DHL, TNT and UPS. However, the majority of larger quantity orders require a larger-in-volume based shipping method. Having said this, shipping by air does have its advantages as well.
One huge tip here is when deciding to use a large air courier like DHL, make sure you advise your supplier to charge you the freight cost using their own shipping account and not to charge you using your own local shipping account.
The reason for this is that in other countries such as China, shipping account holders pay at least less than half the rates we would be charged locally using the same carrier.
For example a while back we used our own DHL account to have the supplier send us a padded A4 envelope. We were in deep shock to find that the amount of the bill cost $100.50!
Having used the supplier’s DHL account to send the envelope would’ve cost about $25 due to the lower rates they are privileged to primarily because of the large volume of shipping transactions they do.
If you prefer, however, a good customs broker can also organize air freight for your goods and would this probably be cheaper than if you attempted to organize it locally yourself as they have certain contacts and discounted rates when dealing with various supplier countries around the world.
So for some products and services where time is of the essence, air freight may be your best bet. Sure you may pay more, but you’ll be able to make the sale in time and put a smile on your buyer’s face.
For more information please visit our website at https://www.onlinewealth.com.au.