Importing goods from overseas can be a great way growing your business by improving your offering while cutting costs. However, importing isn’t completely without risk. Before you begin, it’s important to understand exactly who your customers are, and exactly what goods they require.
This will help you to meet their obligations more accurately, think about your price point, work out the timelines for when your customers can expect delivery, and manage your supply chain accordingly.
The following are a few steps which will help you develop a better understanding of your customers.
Pay them a visit
If you’ve never done business with a customer before, visiting them in person can help you figure out if they have the right premises in place to warrant future orders.
Ask them questions
Find out who they currently do business with, as well as how long they have been established for. It’s also a good idea to do a Google search on your customer, to help you build up a better profile of their business. The more questions you ask, the less chance of any unwelcome surprises further down the line.
Double check their financial standing
You want to be 100% sure that a potential customer will be able to pay for any order they place with you. If they don’t have the right financial standing, it’s possible to build a credit history with them by yourself. You can do this by not providing credit terms, instead taking money upfront to cover purchase costs. Alternatively, if their financials do add up you could take out a form of bad debt protection if you want to extend terms.
Establish terms and conditions
Before entering into a new customer relationship, make sure you clearly define your payment terms, and don’t forget that these may depend on those required by your supplier. Also, make sure you’re aware of your customer’s terms and conditions, particularly where late penalty clauses are concerned, as this could affect your margin.
Understand what they require
Make sure your customers’ requirements are described accurately in their purchase order. This is an important component of the legal contract they will eventually form between you, so make sure it’s complete and correct. All descriptions and specifications of the goods should match across all documents within the supply chain process. This includes the orders you place with your supplier, and as a result the commercial invoice, packing list and goods in transit document you receive from your supplier.
It’s really important to find out what your customers want you to supply, as well as what your suppliers have to sell. With language barriers and cultural differences, misunderstandings can happen. That’s why it’s vital that all of the specifics are ironed out, to make sure you and your trading partners are clear on what terms you can offer.
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