Importing - A Beginner's Guide
Steps to follow to begin your importation business:-
1) The first step is to register your business, obtain licences and make certain that any other legal requirement is met.
2) Research the industry that produces the goods you are wishing to import with the help of your bankers who will use their overseas correspondents. Obtain a suppliers list and select the most dependable from the list for the product you are interested in.
3) Ensure that you have a firm offer or pro-forma invoice from the company that you have selected to supply you with the goods. A full understanding and inclusion of the terms of shipment should also be included in the quotation as well as any other terms and conditions.
Import payments can be done in a number of ways which are listed below:-
L/C – Letter of Credit
Once the terms and conditions and pricing terms have been agreed upon with your supplier you will need to open a letter of credit with your bank.
There are various types of L/C which depend on the agreement with your supplier
a) sight or usance
b) revocable or irrevocable
c) confirmed or unconfirmed
O/A – Open Account
The payment under this kind of agreement is paid to the supplier at a later date.
D/P – Documents against Payment
On the presentation of the import documents by the bank payment is due for the goods.
D/A – Documents against Acceptance
The documents are sent to an appointed bank that then requires your signature of acceptance before passing the documents onto you. Payment will then be made at a later date as agreed upon between you and the supplier.
The supplier receives advanced payment for the goods before they are shipped to you.
The documents are necessary to enable the importer the ability to release the goods from customs authorities and the shipping company. The documents will include an original packing list, original commercial invoice, original bill of landing or airway bill and any further original documentation that may be required by you.