The import and export industry isn’t like any other industry. It comes under the international trade sector. International trade gives many opportunities to traders for getting success. But, the road to international business success isn’t that easy! Before doing business in the global market, one should have in-depth knowledge about the industry. Not having the right knowledge about the import and export business can create expensive blunders for one’s business. So I am writing this blog to educate you on common mistakes in import and export business.
Many of the owners and managers who are into an import and export business are involved in this business and start evaluating their operations’ success. Still, they don’t know what mistakes they might be making in the import and export business, which can later become their business’s failure.
To deal with such situations, traders should know and learn valuable insights on what kind of mistakes they might be making and how they can avoid such mistakes so that they can enjoy their success to the fullest!
Let’s have a look!
Common mistakes in the import and export business and how to avoid them:
Lack of knowledge in Import and export regulation
Traders must know all the common mistakes in import and export business and other considerations like regulation, codes, and procedures implemented by customs bureau. Not having the right knowledge of import and export regulations can bring more troubles like,
- It may increase the cost of a trading business
- It may attract penalties
- It lowers down the profits due to penalties
- They may fail to clear the goods in time
Therefore, it is advisable that traders should participate in programs that government arranges for both importers as well as exporters to reduce the risks in international trade by having the right knowledge about the rules and regulations.
Lack of Verifying Legitimacy Of The Supplier Or Buyer Of The Product
There are many examples in international trading where one party is unaware of the other party, involved in doing business with each other. Later on, it is found that the customer or supplier with whom they started the business wasn’t legitimate.
To get rid of such situations, verify every detail and legitimacy of the customer and supplier before signing any contract. So, one does not indulge in any kind of problem and can smoothly start the business without any hassle.
Lack Of Declaring The Correct Value In Customs
Many times, business owners do not declare the correct value of the goods intentionally or undervalue the product to reduce the cost so that they can make a profit out of it. Honestly, it is a big mess they are putting themselves into. If they are investigated for this foul play, officials will take legal action, and it will damage their reputation in the industry for sure.
If one wants a smooth flow of importation and does not want any government authority interruption, paying the right customs and duties will be the right thing to do in the import and export business.
Fail To Insure Property Goods
All we need is to safely import and export the goods from one place to another place without any damage or loss. But sometimes, we never know what can happen in transportation. There are chances that you may face loss if something bad happens intentionally or unintentionally. i.e., Your goods may get stolen, the ship may sink, or temperature fluctuations can cause the actual damage.
To get rid of such situations, one should take the goods’ insurance with proper documentation between the consignee and the shipment company.
Doing so will make them relaxed! One doesn’t need to worry about the goods as it will be secured. So, it is highly recommended to take the insurance of property goods.
Hiring an inexperienced customer broker
It is highly recommended that one should hire experienced and competent custom brokers because they make sure that all of the paperwork is complete according to both the countries’ norms, and if not, they will guide the traders through it. Plus, they advise whether one is ready to import or export the products or not.
Suppose you hire an inexperienced custom broker who does not know the documentation and its verification from the competent authority. In that case, you may have to face situations where you need to bear the colossal loss or need to deal with legal problems.
So, make sure when you hire a customs broker, ask references from others, and follow up with them to determine how their experience was with the broker.
Apart from these mistakes, one should keep in mind that they should be familiar with Incoterms and currency fluctuation. Not knowing what incoterms are or improper research of one’s currency choices could lead them to legal problems with the customs and rate volatility situations.
Those mentioned above are the common mistakes in import and export business that one should take into consideration and avoid; otherwise, it will directly or indirectly affect your import and export business. If you think you are a new or already into the import and export business and want someone to guide you through import and export requirements in detail, IMPEXPERTS is the right company you should be in contact with. Get in touch with them and get expert advice for your import and export business consulting.