Why how and when importer import goods from other countries
At first we have to know what is import,Who is importer, what risks associated with import,
What is import?
Import is the buying of goods or products made in other countries for domestic use or resale’s own country to meet up the local people demand.Import is the inflow of goods or merchandise from other countries.
Who is importer?
Which man or organization import the goods or products is importer.
What risks associated with import?
- Supplier may not be supplied goods in time.
- Exporters goods quality not as per agreements or contracts.
- International market price of raw material is high so the supplier may not supply the goods
- Political volatile conditions
- Strikes, hartal etc.
Why importer import the goods or merchandise?
All country in the world is not self-sufficient in all products. Most of the country of the world depends on one country to another country to meet up their domestic needs. If any country is not meet up the country’s demands of the products or merchandise, that country finds the products in international markets to import the quality products at a low price and to meet the domestic demands. When an importer found the demand is high but the supply is not as per the requirement of the country and then he tries to contact others country’s suppliers of that products or goods. The importer bargains with the supplier and settles their price to import the required products.If they agree with both terms and conditions the supplier issue a proforma invoice to the importer if the supplier has no agent in importer’s country. If the supplier has an agent in the importing country, he ordered his nominated agent to issue an indent as per their commitment or agreement. Accordingly, the supplier’s representative issue an indent where the following information is included:
- Name of the supplier:
- Address of the supplier:
- Supplier’s bank Name and Address:
- Supplier’s contact person:
- Name of the products:
- Quantity of products:
- Country of origin of the products:
- Unit Price of the products:
- Total price of the products:
- Incoterms: CFR or CIF
- Place of shipment:
- Date of shipment:
- Name of the ship:
- Payment system: At sight/DP/ 180 days sight after acceptance etc.
- Tentative date of arrival of the ship:
- Pre-shipment Inspection allowed or not
- Freight Pre-paid or not
- Value add: 5% to 10% allowed or not
- Shipping marks:
- Shipping line address:
- Validity of the invoice:
- Name of the Importer:
- Importer’s contract person:
- Importer’s Name and Address:
How importer calculate the costing price of the unit of the products:
The importer calculate the unit price cost of the following way:
- Landed cost of imported products unit price:
- Local Transport cost:
- Letter of credit opening charge
- Bank profit:
- Godown rent:
- Office rent:
- Staff salary:
- Telephone bill:
- Labour cost:
- Electric Bill:
- PSI charge:
- Misc expenses: 1% of the unit price
when importer import goods from other country
After adding all the above cost if the local price is higher minimum 20% from other country then the importer import the goods.If the imported price is higher than the local price importer do not import the goods from other country.