Want to Be a Direct Importer
• Ex-factory means you assume responsibility at the factory’s dock.
• Free on Board (FOB) shipping point, the most common order term, means you assume responsibility after the merchandise leaves the shipping port.
• FOB port of entry means you assume responsibility for the goods at the port of entry.
• FOB your warehouse means you assume responsibility at your own dock door.
Just as with domestic shipments, I recommend assuming shipping responsibility as the buyer so you can be assured you’re paying the best price for the freight. In addition to moving the products, you’ll have to clear the imports through U.S. Customs and file necessary forms.
Takeaway tip: Shop around for a full-service freight forwarder to help you with this part of the process. A freight forwarder will arrange the shipping of full and partial containers, clear the freight through customs and file proper paperwork. You then can have the forwarder deliver the items to your warehouse or you can pick them up at the U.S. point of entry.
In exchange for the potential higher margin, you may assume heightened risk for product defects and other inventory issues. Unlike with a domestic vendor, if you receive overseas products that have problems, you may not be able to refuse the shipment or send it back for repair or replacement. Instead, you’ll be stuck with the goods and have to repair them yourself, and/or negotiate compensation from the supplier.
Takeaway tip: Build an allowance into your original price to account for potential defective merchandise or liquidation, especially if the individual unit cost is high.
And due to the long lead times of sourcing overseas goods, buy a higher percentage of your forecasted sales — maybe even more than 100 percent. You won’t be able to get items quickly back into stock, and no doubt you’ll want to avoid backorders, especially for seasonal or fashionable products.