Importing products and components into Australia from overseas can be an effective way to reduce costs and expand your product offering, especially if you are unable to find a suitable local manufacturer. There are many important factors to be aware of when undergoing this process, including choosing the right supplier, sampling, production management, freight and import entry costs, shipment booking, required documentation, along with many other considerations. This guide provides a general overview of importing goods into Australia.
Selecting Your Overseas Supplier(s)
While it may seem like an obvious first step, there are many critical things to consider when choosing your supplier that can be overlooked. For most products, there will be a considerable pool of suppliers to choose from. There are suppliers of all different sizes and levels of experience, so it is important that you are working with a supplier that is best suited to your business and product requirements. Minimum order quantities (MOQ) are a good indication of how large the supplier is or how willing they are to work with your company. Be sure to check that you can meet the supplier’s MOQ requirements, however, keep in mind that MOQs are often negotiable. It is also helpful if suppliers have experience exporting to Australia. This means they will be familiar with the processes and requirements, which will often be useful down the track. You may also want to ask the supplier what quality control processes they have in place. Finally, the supplier should also be easy to communicate with and be professional. At GSS, we have a network of reliable suppliers in a wide range of industries who have all been vetted accordingly. When looking for suppliers to add to our network, we do our due diligence and employ the use of trade data software to assess the reliability of the supplier.
When you are discussing your project with suppliers, the below points are important to pay attention to:
- Sample pricing: It is recommended that you request to see a sample before moving ahead with mass production. Be sure to ask the supplier what the cost of the sample would be and what the lead time is. Also consider the freight costs to receive the sample and if there would be any restrictions to air freight of this sample.
- Production pricing: This is also known as the unit cost. Typically, the order quantity will affect this price, so you may wish to request pricing for different quantities to assess this variance as your quantities increase.
- Packaging: You should also make the supplier aware of how the products will need to be packaged, including individual product packaging, labelling, carton packaging, and pallet packing.
- Lead time: It is important to know what the factory’s timeline is for completion of your order. This may change depending on the season. The lead up to Christmas is a particularly busy time, so be sure to take that into consideration. Factories often close shop during Chinese Lunar New Year, sometimes for extended periods of time, so this is another holiday to be aware of.
- Payment terms: This may vary between different suppliers, so be sure to check what the payment terms are to make sure they will be suitable for your business. Some suppliers may require you to pay upfront for the entire order, and others may just ask for a deposit for a certain percentage of the total order value. The most common trading terms are a 30% deposit before production begins and the 70% balance upon receipt of the B/L (Bill of Lading) and confirmation goods have been shipped from the origin port.
- Incoterms: Shipping terms can have a significant impact on the overall purchase price of an order, so it is important to determine what is being included in the supplier’s quote. If you are unfamiliar with the different incoterms, it is suggested that you read this Beginner’s Guide to Incoterms.
Once you feel comfortable with the chosen supplier, you can move onto sampling of the product if it is off-the-shelf or only requires minor modifications. In this case, the supplier may ask you to pay for the sample and for the shipping of the sample. If the supplier has the item in stock this should be a relatively quick process. If your product is customised and requires tooling or moulds to be made, suppliers often will require you to pay for the tooling costs before making the sample(s). This may take some time, so ensure that you check, to the best of your ability, that the mould is accurate as it can be very costly otherwise. In some cases, 3D printing, and CNC machining can be used to produce a sample and verify the design sample prior to making the moulds or tooling.
Once you receive the sample(s), conduct thorough QC checks, and document the sample in detail for future reference. If there are changes that need to be made, further sampling rounds will need to be undertaken to reach the desired outcome. When you are satisfied with the sample, you can move onto placing an order, but be sure that the final sample is well documented so it can be used as a reference for mass production.
Placing Orders and Managing Production
When you are receiving invoices and placing orders, be sure to pay attention to which currency is being quoted and how the exchange rate may impact pricing and payments on your end. Generally, suppliers prefer to be paid in USD. Once the payment has been made according to the invoice, the supplier should begin production.
It is then up to you to follow up with the factory continuously during the production process and resolve any issues that may arise. An experienced manufacturer should have a QC process, so once production is completed it is recommended that the QC checklist is requested from the factory for you to review.
Engaging with a Freight Forwarder
The process of importing goods into Australia can be complex and working with an expert can reduce the risk of making costly mistakes. Working with a freight forwarder can help you understand the costs of importing your products, facilitate all customs clearance documentation, tax and duty requirements, manage shipping and delivery, among other tasks.
There are various importing-related costs that you will need to pay, so it is worth becoming informed about the below points:
- Shipping and logistics costs
- Customs clearance and import entry costs
- Local freight handling charges levied by airports or seaports
- Customs duty taxes
- Goods and services tax
- Tariff classification
- Insurance and other costs
- Local delivery costs
For a general guide on estimated types of charges and fees you may need to pay, read this article. Please note that these costs are influenced by the product classification, free trade agreement, taxes, and many other factors, so it is important that you do your research based on your individual product and situation.
GSS works with trusted freight forwarders to handle all logistics and importing matters, so our clients are not burdened with organising freight, transport, customs documentation, delivery, or other related tasks. We can arrange full containers or, where required, utilise our competent shipping partners to consolidate shipments to achieve substantial cost savings for our clients where possible.
Booking Your Shipment
Your freight forwarder will need to be provided with a Customs Clearance Authority (CCA) in order to customs clear your goods. You will also need to book your shipment in accordance with the ready date of your goods. It is suggested that you secure your space early to give you the best chance of receiving your goods in time and avoiding disappointment. Booking in advance also helps to hedge against risks of delays and cancellations. It is also advised that you take into account various holidays that may delay shipments due to port congestion at times like Christmas and Chinese New Year.
Gathering and Sending Documentation
There are a range of critical documents that will need to be provided to your freight forwarder. Some of these documents must be provided by the manufacturer. Without these documents, your goods will not be able to be cleared through customs in Australia and can experience significant delays upon arrival. Required documentation includes:
- Bill of lading (Telex Released)
- Commercial invoice
- Packing list
- Free trade agreement – CHAFTA
- New, unused and asbestos declaration
- Packing declaration
Once your shipment has been booked, you can liaise with your freight forwarder and ask for updates on the status of your shipment. Once the vessel has departed, there may still be delays if the goods need to go via other destinations prior to arriving at your destination, it is important to stay in touch with the forwarder to ensure the ETA is still what you are expecting. Should you engage the services of GSS, we will handle all freight for your shipment and keep you up to date along the way.
How GSS can Help
Working with a sourcing company gives you access to a wide range of benefits, including tapping into new resources and skills, having a trustworthy local contact, benefitting from cost savings, risk reduction, time efficiency, and quality control. Read more about the benefits of working with a sourcing company.
GSS offers a full importing solution from factory direct product sourcing, custom manufacturing, production management, quality control, logistics, customs clearance, through to local delivery. GSS is highly customer focused, and our clients see us as an extension to their purchasing team and resources which helps them to have access to services usually reserved for larger companies. Learn more about how we add value.