Select a wholesale supplier, using a thorough evaluation process.
Importers who have problems are often those who start with Step 4, select a supplier, and jump right to an order. You will be much more successful because you have done all of the research and planning in Steps 1, 2 and 3 that will lead you to evaluating and selecting the right supplier in the right country.
Okay, now that you have decided what product or products you intend to import, have a feel for the most advantageous countries to import from and have a reasonably good idea about the costs of importation, it’s time to select a supplier.
It does seem overwhelming to think that you are looking for high quality, low priced lubricants for your auto parts manufacture and you have the whole wide world to look for it. Where do you start?
While it is possible to Google to look for suppliers, that approach is hugely time-consuming and very prone to coming up with non-legitimate businesses. Save time by using the Internet more wisely. Begin by searching in a major international trading portal such as eSources. In addition to simplifying the search process, eSources has gathered additional, important information about all manufacturers and wholesalers so that you will have an extra measure of confidence in working with suppliers. Be extra careful with portals that don’t verify all their listings, as you could lose a lot more than there is to gain.
Country consulates or embassies
Once you have identified favourable countries, talk with or visit that country’s consulate located in your own country. They can supply you with industry directories and information about how to import. Sometimes a country’s consulate website contains the information that you need. Additionally countries often setup their own chambers of commerce in other countries (for example, Brazil has established a Brazilian – American Chamber of Commerce in New York). Their website will provide lists of exporters as well as all the information you need to import products from that country. Additionally these institutions are able to verify the details of a supplier in their country. if you are unsure about a supplier’s legitimacy, you can always contact them to confirm their official contact details and to confirm that they are still in business.
Your country, state or province may sponsor trade missions to other countries. These are subsidized trips to another country to make contacts and become aware of available products.
Collaborate with non-competitors
If you are looking for stained glass for small home decorative arts and you are aware of a builder that has established a contact for stained glass for special doors and cabinets, it makes sense to hook up and try to work together. You will have an already established connection and may be able to reduce some shipping costs by sharing containers, etc.
Select an In-Country Agent
An in-country agent is a person who becomes your eyes and ears in the country where your supplier operates. If you are not able to travel to the country to make a personal inspection of the operation and meet with the supplier face-to-face, the in-country agent can represent you in some of the discussions. Use your agent to:
- Help you locate suppliers
- Inspect the factory where manufacturing takes place
- Compare samples you have received with actual manufactured goods
- Examine shipments before they are placed in shipping containers to be sure that the goods reflect the promised quality, specifications and quantity.
- Examine shipping documents to be sure that all documents are in order before leaving the country.
You can find an agent through your country’s in-country consulate, the local chamber of commerce or by googling “inspection or import agent + country” or “in-country agent + country”. Consider the following when choosing your import agent:
- Track record and reputation
- Competing products and the number of importers the company is representing.
- Financial strength and needs of the agent, particularly commission. This will depend on the level of effort expected.
- Degree of know-how on your product and the entire industry.
- Firm size. Small firms are very common and can provide excellent service. Larger firms do have the advantage of more networking opportunities.
Selecting your import agent with care will save you many headaches as you work with your suppliers.
Develop a Supplier Relationship
Developing a good supplier relationship is very important. Why? You want to be sure that your supplier will take care of your orders carefully, make your business a priority and work with you when difficulties come up.
First of all, if you can travel to meet your suppliers and it’s cost effective to do so, take the opportunity to do it. There is no substitute for a face-to-face meeting, especially in some countries where the personal relationship is extremely important to the good business relationship. If you cannot meet in person, be sure that your communications are both cordial and business-like. The supplier is sizing you up as a business partner at the same time you are sizing him up. Your in-country agent can provide some of the personal contact on your behalf.
Be sure that you know what you are looking for, what you can afford to pay, the quantity you plan to purchase now and in the future and any special issues such as timing issues for delivery and so on.
Visit any ecommerce blog and you’ll find horror stories about importers who ordered iPods and received iPeds, a $20 knockoff that is probably illegal to import anyway or never received any product at all. How do you avoid falling victim to scammers in the export business? Verify, verify, verify.
The best approach is to hire an in-country agent to meet the supplier, inspect the operation and assure that you will receive the product you pay for. If you do not use an agent, here are some steps that you can take to confirm that you are dealing with a reputable company. (Your agent can also help you with some of these tasks.)
- Confirm the legitimacy of the company
- Verify the name and address of the company, the manufacturing address, phone number and fax number. Cross-reference this information and the company name against other trade sites to be sure there is consistent information. You can also call the consulate for that country and ask them to verify the information.
- Ask for and verify their business registration number. There are usually governmental websites for each country that allow you to search for a business by registration number.
- Phone call test
- Call the company several times at different times of the day. Ask about the company, who’s in charge, etc. Be sure that you get consistent information. Scammers do not train people well enough to be consistent with false information.
- When you are speaking with the supplier representative, ask a few technical questions about the product. If someone is trying to scam you, they probably won’t know enough about the product to answer correctly.
- Ask for references in a developed country. Obtain a contact name, company name, title, address and phone number then use it to be sure that the supplier has given you verifiable information and that the reference is positive.
- Once you have established an order, ask for banking information and verify that there’s an actual account in the business’s name. Every legitimate supplier has a bank account.
- Look closely at the website. Check the domain registration from http://www.whois.sc. Check to be sure that product pictures are associated with that website; if they are linked to other websites, you may be dealing with a sham company.
What have we learned?
By the end of this section, you should know:
- How to locate potential suppliers for your product using a variety of approaches.
- The value of using an in-country agent.
- Strategies for evaluating the legitimacy of your supplier.
In the next part we will look at tips for negotiating the deal.
To our success working together,