5 Mistakes New Importers Make, And How to Avoid Them

If you’re new to importing goods from overseas, it can feel like a bit of a minefield. There’s a whole lot to learn and understand as the consequences of not understanding can be costly.

When importing goods, you’re looking for two main things–the lowest costs and the quickest transit time. These both help your business run smoother, maximising your profits.

However, if you make some of these common importing mistakes, you can suffer from additional costs and delays. With more complications than ever, especially when it comes to international transport, it’s even more important in 2024 that you get everything exactly right. Remember, there’s no shame in asking an experienced professional for help. You can also access the service of freight forwarders in Australia since they’ll be happy to give you some guidance.

That being said, as an importer, you’re responsible for ensuring that everything goes smoothly and you get the most out of every shipment. So, with that in mind, here’s a list of 5 common mistakes that new importers make and how you can avoid them.

Source: The Greencarrier blog

1. Failure to understand shipping terms

If you haven’t imported before, shipping terms can seem like a foreign language. However, in the interest of maintaining business relationships as well as saving time and money, it’s a language that you should learn.

Incoterms are essentially laws that govern the shipping industry. They lay out who has the responsibility for certain steps in the shipping process. This is important because the terms are used in most international trade contracts.

Most steps of the shipping process come with a cost of some sort–whether it’s transporting from the supplier to the port of origin or clearing customs at the destination. Someone needs to be responsible for each step, and getting confused when it comes to income can introduce hidden costs.

For example, Ex Works (EXW) means you pay end to end. The supplier simply packages the goods and makes them available for collection, and you’re responsible for everything else. At the other end of the scale, Delivered Duty Paid (DDP) means the seller covers practically all costs door to door.

Source: International Cargo Express

2. Failing to plan in advance

Demand for space on cargo vessels varies throughout the year. August through to October is generally peak shipping season, however, the Covid-19 pandemic has had an adverse effect on this. So, just like anything in business, planning is crucial. If you’re making promises to customers or planning certain events around a new shipment coming in, you need to ensure that you have sufficient time.

Shipping lines are dealing with backlogs, complications at every port, and severe equipment shortages. If you need things urgently, you’ll need to plan well in advance. Also, consider the time you need to have once your shipment arrives in Australia. It can take a number of days before cargo is processed through customs and made available to

Ultimately, importing has a lot of variables attached, such as backlogs at ports, customs issues, or problems with the source supplier. The list of things that could go wrong is pretty extensive, and the only way to avoid problems is to plan diligently. Regardless of the promises you receive from suppliers on the other side of the world, it pays to do your own research and work on realistic shipping times.

Source: Mortgage Equity Partners

3. Not organising the right paperwork

Much like anything in business, good paperwork is the key. Since all consignments coming into Australia need the appropriate paperwork, it pays to understand the requirements in advance.

Some examples of paperwork include commercial invoices, packing declarations, and, most importantly, a Certificate of Origin if dealing with a Free Trade Agreement country. Having the right paperwork will save you money and also ensure that your shipment isn’t held up at the destination port or, even worse, re-exported.

As an example of how much this can impact your business, especially your bottom line, consider you’re importing from a Free Trade Agreement country. If you’ve got the right certificates, you save yourself considerable expense in the form of taxes. Now, on the other hand, if you don’t have the right certificates, you can be hit with additional expenses. You may be able to claim that money back, but that’s a whole other hassle that you really don’t need.

Source: Fidinam Group Worldwide

4. Not able to consider the Free Trade Agreement

Australia has Free Trade Agreements (FTAs) with many countries around the world. This is great for importers, but it also means there’s a set of rules to follow if you want to take advantage of a Free Trade arrangement. As mentioned above, if you don’t have a Certificate of Origin with your shipment, you’ll be charged the standard duty for a non-FTA country. You might be able to get a refund later, but this usually requires a broker, which is more time and money.

Many first-time importers don’t understand Free Trade Agreements, ultimately costing them more money. When you start out as an importer, it’s likely that you need every cent to count. Don’t go throwing money away on duties that you shouldn’t have to pay.

Source: RTE

5. Forgetting additional customs charges

Budgeting for all costs along the way is crucial to making a profit from importing. As mentioned in the first point, you need to understand Incoterms to clearly plan your involvement in the process, as well as estimate your costs.

There are also additional customs charges paid through your forwarder. Be sure to take these into account prior to ordering goods, such as the Duty (5% of the FOB), GST (10% of the CIF plus the value of Duty), and IDPF (around AUD85.00 to AUD200.00, depending on the FOB value).

Understanding all of the above will ensure your import process is successful, profitable, and hassle-free.

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