Category — Guides & Advice

Once you have a list of potential suppliers you need to ask for quotations. In making these requests it is essential to ask for or give specifications for the products you require and request any special requirements in respect of packaging, labelling and delivery. If you have your own purchasing conditions, you should attach a copy of these to your request quotation. Potential suppliers should also be asked to send copies of their sales and technical literature and samples where relevant. If you can give an indication of the quantities you are likely to want, frequency of deliveries and possible growth of your business, this will encourage suppliers to make a realistic quotation, especially if they grant discounts or rebates for minimum quantities.

Once you have received offers from various suppliers, either in one country or from various countries, you must decide which supplier or supplier’s best meet your needs. At this stage you may also need to check the supplier’s specification to see if it meets UK standards. The British Standards Institution can assist you with most manufactured goods, regardless of weather or not they are for industrial use or for sale to retail consumers. If you import products that do not meet UK standards, particularly in respect of health and safety regulations, you may find you are unable to sell them.

Should you wish to act as an official agent or distributor for a supplier who already sells in the UK without representation, you should find out about him from existing purchasers or his goods in the UK. Some suppliers, for example of spare parts for the motor trade, may voluntarily provide information, giving names of some of their existing customers in the UK. If they do not currently sell in the UK, you may wish to consider becoming their UK agent or Distributor, thus entering into a formal agreement with them to promote the sale of their products.

Assuming you have identified suitable suppliers you will wish to check further on their financial viability. Some of the major UK clearing banks may provide you with some information on overseas companies. Alternatively, you may be able to obtain the information from one of the credit rating agencies such as Dun & Bradstreet.

The Department of Trade and Industry’s (DTI) publication “Overseas Trade Statistics” helps to identify counties which export the goods or services which you wish to import. The “Trade and Navigation Accounts” and other individual country statistics enable you to identify the levels of imports and exports of products by individual country. These are very good guides to the main supplying counties. In turn you can look at individual country trade directories to identify suppliers of the products required. All this information is available in the DTI’s Export Market Information Centre (EMIC) library at the DTI’s offices in Victoria Street, London; other libraries such as those in the larger Chamber of Commerce will also hold some of this information. Some trade associations, particularly those whose members are engaged in international trade, should be able to supply details of overseas suppliers of materials and products which are not available in the UK but which may be used by their members. International trade magazines in the UK and foreign trade magazines will be a valuable source of information provided they specialize in the type of products in which you are interested. Copies of a country’s various trade magazines may be available in the commercial sections of overseas embassies. Such sections are usually very helpful in providing information on exporters form their own country and many will advise these exporters of your interests in their products. A number of countries, such as Hong Kong and Singapore, have trade development organizations with branches in the UK which provide trade directories and more detailed information on supplier’s products and services. A number of countries such as the USA also publish buyer’s guides which are updated annually or more frequently. If you are looking for new products not yet introduced to the UK market, these guides can be a useful source of information.

Many International trade fairs are held in the UK and overseas where leading manufactures display their goods. Information on international trade fairs is available from the DTI, Export services Directory, although they primarily server UK exporters. There is also a Directory of international trade fairs and exhibitions which potential importers may find useful. However, before visiting a fair, it is sensible to make enquires within the trade to ensure that it is well established and supported by major suppliers. Attending a trade fair or exhibition is one very good way of meeting potential suppliers; it also enables you to compare similar products from different manufactures.

British chamber of commerce and the American chamber of commerce (UK) are valuable sources of information on suppliers’, trade fairs and other trade matters relating to business within the country they represent; In general if you wish to do business with any of their members they will supply initial information without charge, However, if you wish to import regularly from a particular country, you may find it beneficial to join their Chamber of Commerce in the UK.
Should you be interested in buying goods produced by small industries and craftsmen in developing countries, advice should be sought from the Developing Countries Trade Agency known as DECTA.

The Internet is an increasingly important source of information on potential suppliers and goods and services, particularly from developed countries, Goods can be bought and paid for via the internet

Should you be unable to find a source of supply in the UK you have to search for suppliers overseas. It will be necessary to locate suppliers who are reliable and financially sound. Having found them, it will be up to you to agree prices, methods of payment, periods of credit, packaging, labelling and delivery arrangements. You may also wish to protect yourself against possible supply failures by having more than one source of supply, There is also the problem of exchange rate risks if you are paying in the supplier’s currency. These are some of the factors that have to be taken into consideration when deciding where you are going to obtain your goods. Suppliers in developed countries such as those in Western Europe, North America, Japan, Australia and New Zealand are likely to be more reliable than those in developing counties. Markets in developed counties are more sophisticated and competitive. Suppliers are generally used to meeting the needs of customers whose standards are high.

Many reputable overseas manufactures and producers are represented in the UK by agents, distributors and importing companies. Some of these may be subsidiary or associate companies of an overseas manufacturer. In the commodity field, in particular, there are many specialist importers of products such as flowers, fruit and vegetables, as well as those who import large volumes of products such as timber, coal and metals. To locate some of these importers it may only be necessary to look into business telephone directories; more often you will need to consult trade directories, such as the Directory of Importers, these give information on the most types of imported products whether industrial or retail.

One of the most important tasks for any potential Importer is to find suppliers who can meet his requirements and those of his customers. Most potential importers have very clear ideas of the type of product or products they wish to import.

They will probably be aware of similar products available in the UK from local manufacturers or importers. If not, they should find out about the products that are already on the market. Should it be a product completely new to the UK, it is important to determine where it fits into the market. There is very little point in importing products until you have satisfied yourself that there is a market for them and that you know how to sell in your chosen market sector. As part of your research you may wish to import trial quantities to test the market, but this presupposes you have already found a satisfactory source of supply and that is not always easy.

The packaging and labelling of products by the exporter has to be of a high standard in accordance with the regulatory requirements and must provide protection against damage and pilferage. If the importer is buying on an ex-works basis, he must himself see that all these requirements are met although he may decide to appoint a freight forwarder in the overseas country to look after those matters and to arrange shipment. Your decision will depend on how the goods are to be sent to the UK, the nature of the goods and your own expertise. If goods are coming from a country in the single market the problems are likely to be fewer than if they are coming from deep sea markets.

If you are importing goods for resale, you also have to consider how they should be packed to assist with the sales and promotion of the goods in the UK, you may wish to buy them in bulk and repackage them yourself or arrange for the overseas supplier to see that each individual item is packaged and labelled in accordance with your needs and the UK regulations. If you repackage the items yourself, as you might want to do with imported textiles, you can use the UK package designers to design attractive packaging for you. The design council provides a list of names of suitable designers. A walk round any supermarket or department store looking at packaging and labelling shows how important it is to get this right in order to promote the sale of your goods.
In determining your start-up costs it is essential to take into account designers’ fees and other setting-up charges for the packaging and labelling. It is then important to determine the actual package cost for each item unless it is included in the supplier price.

Anyone wishing to become an importer may have the choice of being a distributor, and independent wholesaler or retailer. A distributor normally has a formal arrangement with an overseas supplier to act as his stockist and sales force in the market. The distributor may act for more than one supplier provided the products from different suppliers do not compete with one another. There is some advantage if they are complementary products and purchased by the same customers. For example, orders for a variety of products will probably be large and require less sales effort for each unit of sales.

An independent wholesaler is one who is not tied down to any particular supplier and ideally obtains his goods from the best and cheapest suppliers anywhere in the world. He has to be continually on the alert for new suppliers and new product opportunities for sales in the market sectors in which he operates. As an independent buyer he will have more freedom and should not be constrained by the overseas supplier as to the price at which he sells. In general, he does not need to give his overseas suppliers information on his market and price mark-ups. I tied down distributor will undoubtedly have to provide such information to his supplier, i.e. his principal, probably to the extent of having to send monthly reports on sales, and to open his books to him.
Should you wish to be a retailer of imported goods you may have the choice of importing them direct or buying from the UK distributors of overseas suppliers or in some cases independent importers. Buying them in the UK avoids the problems associated with importing, however, one may find that the price is higher than if you import direct from the overseas supplier. The fruit flower and vegetable trade is a very good example of exported goods being sold through wholesalers in the wholesale fruit and vegetable markets. The majority of retailers of such products in the UK will buy their produce from the wholesale markets. However, for some products the large supermarkets deal directly with major overseas suppliers provided they can be confident that the quality of the goods, packaging and service will at all times meet their specifications.

Industrial users of imported products are most likely to buy them through the UK agents of the overseas manufacturers, the goods will be delivered directly from the overseas supplier to your specified destination and the goods will have to be paid for in accordance with the agreed payment terms. It will be apparent that, according to the type of products you wish to import, you can be a tied distributor, and independent wholesaler, a retailer of an agent. In addition, depending on the type of service and products you wish to offer, you may be able to obtain a franchise, negotiate a licence to manufacture the goods in the UK or even perhaps enter into a join venture or business cooperation arrangement with the overseas company. It is worth exploring all these possibilities to see which option is the most interest to you.

Once possible overseas suppliers have been identified, enquire if they have agents of distributors in the UK, if the answer is affirmative, they will most almost certainly require you to buy through them; however, if your business is sufficiently large, they may be willing to trade with you directly. Even if the UK agent or distributor is a wholly or partly owned subsidiary of there company, they may sill be willing to deal with you partly or wholly on a direct basis. It is a mistake to assume you will be necessarily get better terms or a superior service by buying direct. The agent or distributor will probably receive a commission on your purchases weather or not he is directly involved in your transaction. In any case, he will probably intervene if any problems arise over quality, delivery or payment or service.

A small firm wishing to import goods or even services should find that its local enterprise agency, chamber of commerce or local business link can give them advise and help. The local central library should also be a good source of information and books on importing, particularly if it is a business library or has a good business section.

Excise and Inland Customs Advice Centres are able to provide all the information and leaflets relating to UK duties and taxes on the goods you may wish to import. If, instead of importing direct from overseas suppliers, you wish to purchase from sources in the UK, it will be necessary to find a wholesaler or distributor. Information on possible suppliers can be obtained from various sources such as directories.

The biggest problem for importers is to ensure that they are dealing with reliable suppliers. If not, they may find themselves paying for goods of inferior quality and experiencing late deliveries or nothing at all. To some extent it is the responsibility of the importer to establish purchasing conditions with his supplier and not just tamely to accept the supplier’s sales conditions; it is particularly important to have clear specifications for goods and packaging as well as clearly agreed arrangements on payments and insurance. It is in the importers best interests not to have to pay for the goods until he has taken the title to them and inspected them. This enables him to check that the goods have arrived in good condition and is as ordered before paying.

As an importer is it important to identify the key markets and suppliers that could be interested in meeting your requirements. It is then necessary to determine if the goods can be used profitable either in your manufacturing process or for resale. There is no sense in wasting time, money and effort in pursuing possible goods or services from overseas markets unless they will enable you to achieve a satisfactory profit. There are a number of different ways in which you can carry out some quick market research to determine where to concentrate your efforts, which are described later. It is a mistake to drift into importing as there is a good possibility they you will not get the best deal in terms of quality, price or delivery. By far the best way to become an importer or to extend your importing activities is to have a carefully thought out plan of action to achieve your objectives.

Many of the information services available in the UK are designed primarily to assist exporters; however a lot of it is of assistance to importers, Central libraries, Major Banks, government departments, professional institutes, Trade Associations and Chambers of Commerce provides information, much of which is often free. Some of them also provide training in importing and organize other events such as purchasing seminars which often include some aspects of international purchasing.

Importers who wish to establish a close relationship with there suppliers in a non-English –speaking country will find it particularly helpful to acquire some skills in the appropriate foreign language as well as an understanding of the culture of that country. Language and cultural barriers cause some firms to buy from middlemen rather than obtain there requirements direct from the supplier in the overseas market. The importance of the single market in Europe is such that many more people now need to learn foreign languages for business purposes so that they can participate directly in international trade.