Are you one of the many Amazon sellers sourcing products from overseas?
Once you’ve found products you’d like to import, the next challenge you face is getting them from the supplier, through the import process, and delivered to you. Importing isn’t quite as simple as placing an order and having it delivered – that easy process is reserved for your customers on Amazon!
As a seller, you need to have some knowledge of the import process and the various steps involved in getting your products from suppliers and delivered to Amazon. You also should know about various pitfalls to look out for along the way…
#1. First, check the laws
Besides doing some homework into the market opportunity for your proposed product, before attempting to import, you need to confirm that importing will, in fact, be possible.
Rejection laws and trade barriers
Goods may be rejected for any number of reasons, but some of the most common are that the product is restricted or doesn’t meet the stringent health and safety concerns under US law. For example, some importers of cosmetics have had their shipments rejected when it is discovered they contain ingredients that aren’t considered to be safe.
To understand this, you will need to do research on each individual product. Depending on the product type, US agencies involved might include; US Customs, FDA, USDA, EPA, FCC, Department of Fish and Wildlife Services and Consumer Product Safety Commission. There may also be others!
Additionally, trade with certain countries is restricted, so you need to check that you can safely import from the supplier’s country.
Do you require a license or permit?
Some imports require a special license or permit to bring them in. You’ll need to check whether that applies to your particular products.
From the Customs and Border Protection website:
“CBP does not require an importer to have a license or permit, but other agencies may require a permit, license, or other certification, depending on the commodity that is being imported. CBP acts in an administrative capacity for these other agencies, and you may wish to contact them directly for more information.”
Intellectual property rights
Virtually every day, shipments are being rejected where it is suspected that the products violate intellectual property rights. For example, if you think that knock-off Versace handbags might be a good business to get into, think again.
There has been a decided crack-down at the border on any products that are suspected of being counterfeit or in violation of intellectual property rights. Shipments are often ordered to be destroyed, otherwise, the importer begins a costly process of having to export the products elsewhere.
If you do want to sell trademarked goods, just make sure you have a clear paper trail with permission from the holder of the trademark. Agencies inspecting at the border will need to see evidence that you’re a legitimate importer of the product.
The labeling requirements for your particular product are another thing which you should research, then make a plan for complying with prior to importing. Many shipments get rejected due to inadequate labeling, and it can be a shock to the importer that something which can seem trivial is actually a big deal. For example, if you import food from countries that label in grams or kilograms, the label needs to show weight in ounces for the US.
You’ll need to double-check that your supplier knows how your goods must be labeled and agrees to do so before sending them.
#2. Consider your business setup
It is worth looking at your business setup prior to importing and seeking advice as to whether you should formalize your business entity first (such as by creating an LLC). When importing, you are engaging in the regulatory system, so it can be pertinent to have some kind of protection for your personal assets and to keep all of your business dealings under a separate entity.
We’d suggest that you talk to an attorney familiar with import businesses to get the best advice for your particular situation. Requirements can vary by state, so get advice that is tailored to you.
#3. Consider hiring a customs broker
Navigating the laws of importing can be a huge ask for anyone. The role of a customs broker is to help importers meet federal requirements and to conduct Customs business on your behalf. It is also their duty to provide you with advice on proper import procedures. Note: in order to facilitate the broker’s ability to take on that duty, you give them a valid power of attorney to conduct business with Customs on your behalf.
Once hired, the broker can take care of submitting required paperwork, but you will need to be able to accurately answer their questions (such as knowing the ingredients/materials involved in the product).
One thing to look out for is that the broker is actually licensed by US Customs and Border Protection. This means that they have demonstrated the required knowledge and experience to do the job.
Note: If you’re only looking at a small “sample” shipment to test the waters, you will need to weigh whether it’s worth hiring someone to help you. It will usually cost more than it’s worth.
#4. Examine your shipping options
First of all, shipping needs to be examined as a whole; how are you getting the products from the supplier to their final destination at an Amazon warehouse, and how much will this cost you in total?
You need to know where the products are going – usually Amazon will want them distributed across various warehouses, although they do have the option of their Inventory Placement Program too. This means you can ship your goods to one warehouse instead of several, however, they do charge a fee per unit for the service. You’ll need to cost out the whole thing, determining which way is more cost-effective.
If you’re importing a small number of products to test the market, usually it works out better to use a courier such as DHL, UPS or FEDEX. A general “rule” is that the courier can handle shipments of less than 150 kilograms, where commercial value is less than $2500. Do your research to confirm this though, and to ensure you’re getting the best value for money.
For larger shipments, you’re going to make a choice between air freight or sea freight. It’s always a balancing act between the length of time the service takes, and how much it will cost you. Don’t assume sea freight will always be the cheaper option; sometimes the difference is marginal, particularly with smaller loads. We wrote a quick guide to air freight vs. sea freight which you can check out here.
#5. Know your way through Customs
If you’re hiring a customs broker, this will go a long way toward helping you navigate the process, otherwise, you need to learn all about the requirements yourself as an “importer of record.”
For example, here are just a few things you need to know:
- A US Customs bond is required for shipments. As a regular importer, your most cost-effective method tends to be an annual or continuous bond. Your other option is one-time bonds per shipment, but these soon add up to much more than a continuous bond, especially when you ship often.
- Commercial invoices and packing lists will be required by Customs. The invoice must show what you have paid for the goods.
- Any wood pallets or crates must show a stamp to prove they have been correctly fumigated.
- Some products require prior notice of their shipment to be filed within a certain amount of time. For example, FDA requires prior notice of food shipments.
- Boxes must be clearly labeled, otherwise they can get held up for checking. Master cartons must include a label with carton count, country of origin, gross and net weights, and tracking information.
- Tariffs and duties may be charged. In fact, they almost always are. The thing to be on the lookout for is any products where tariffs will be high. Some are subject to more than 100% duty, especially where they are part of anti-dumping laws. This is something to find out in advance – you don’t want a surprise bill!
- Fees may be charged if your shipment requires examination by Customs or other agencies.
- You can be hit with storage charges if your shipment must be stored for inspection.
#6. Plan around key Amazon dates
It’s always a good idea to have an understanding of how key dates impact Amazon’s ability to process new shipments. For example, every year they experience high volumes ahead of the Q4 holiday season, and their processing times are longer than usual.
Amazon is usually very good at communicating about any anticipated delays and sets due dates by which goods need to be received. Keep up-to-date with what is happening, especially if your goal is to have products listed for sale by a certain date or to take advantage of key holidays.
Importing goods to sell on Amazon may be a more complex process than all the tales of online riches tend to reveal. However, once you have the process down, selling online through Amazon’s vast resources can still be a very rewarding experience.
The best thing you can do is research the process and understand the various requirements for getting your chosen product from A to B. As a general rule, taking the time to learn about the regulations, shipping requirements and any expected tariffs helps you plan ahead and avoid costly surprises.
Where you can, seek out the advice of seasoned professionals, or turn to a customs broker for help. Navigating the complexities of importing can be challenging, but those who do it every day can smooth the whole process for you.