9 Costs That Can Affect Your Landed Cost

Landed Cost Calculation

Importing product internationally has it’s challenges but the rewards and profits can be sweet! Your attention to detail when calculating all the costs involved can make or break your profit potential. The larger your quantity the less these extra costs will affect your per unit cost. Here are the top 9 costs to watch out for when calculating your final landed cost.

1. Invoice price
Assuming the factory is quoting you an FOB cost, your invoice price will only include the cost of the products from the factory and may not include the costs listed below.

2. Shipping Costs
Depending on whether you choose air freight or sea freight will be a determining factor when calculating your shipping costs. Sea freight will likely be much cheaper but will also take longer. International air freight can be quite expensive but is sometimes necessary depending on your time to market commitments.

3. Delivery
Particularly with sea freight, delivery from the port of entry to your final destination is sometimes an overlooked cost for new importers. While it is usually possible to pick up product yourself from the port of entry, there are also many “last mile” providers that deliver to yoru final destination.

4. Import Taxes (Duties)
You’ll need to calculate and pay appropriate duty costs on your items by classifying your product with an HTS code. Depending on the type of product, duties can add significantly to your landed cost.

5. Insurance
As with standard domestic shipping, various insurance options are available to choose from, typically costing more depending on the amount you’ll need to insure against.

6. Handling
Ports and other parties that “touch” your cargo en route may charge a handling or processing fee.

7. Banking Fees
Banks typically charge fees for financial services provided inlcuding outgoing and possibly incoming wire transfer fees, letter of credit fees etc.

8. Commissions
If you’ve used a trading company or other intermediary parties, they may choose a flat cost or % commission that you’ll need to include in your landed cost calculations.

9. Consulting Fees
Have you used third party providers for quality assurance or other services? These costs should also be included in your landed cost calculations.

November 16, 2007 | Filed Under Landed cost | 3 Comments

31 Steps to Negotiating With Chinese Factories

Negotiating

Rarely do we come across such a solid article on a complex topic like Negotiating With Chinese Factories. However Silk Road International certainly raised the bar on this one. David Dayton who is the owner of Silk Road International lives in the same city we have our office in, Shenzhen.

November 14, 2007 | Filed Under Negotiating & Strategy | 2 Comments

5 tips for suppliers to get more customers at Trade Shows

Global Sources Electronics Fair in Hong Kong

Common sense is hard to find even when you’re selling. Imagine you (Supplier, Trading Company, Agent, etc.) spend all this money to go to a trade show and your staff doesn’t even have batteries or you haven’t even charged your electronics for display. When potential buyers, who can be exhausted just getting to your place if your booth is not in a strategic location, could have been a solid lead if not a new customer but too bad your products can’t be shown or demoed since you’re out of power!

Being a supplier and not being prepared is possibly a sign of something far worse and a check mark for anyone on the buy side to proceed with caution. If this happens here, what could happen when the order is placed and the money has transferred? Not being prepared and not focusing on your objectives is a sign that you are either not trying or you are not ready to earn business!

We at SourceJuice really want to help buyers as well as suppliers because that’s what it’s all about – both parties winning and making money and engaging in sustainable and profitable business relationships.

So, here go our suggestions to get more customers at Trade Shows – free of charge!

1. Focus on the customer – every person coming into your booth can be a customer in so many ways. Whether they buy from you is not important because if they do buy from you, that is just a benefit of your focus and not just some luck that you have at one trade show and not another. Focus means that your booth, your people, and your products are ready and trained to provide any potential customer an excellent encounter and get them interested, excited, and thinking, if not acting, about buying your products. Even one person can ruin your reputation if you’re not focused. That person may not even be a buyer but could be some powerful man’s wife. Focus allows you to act and deliver your best! Everything that follows below is only a piece of this most important platform of focus.

2. Have your information packets ready and make them very easy to understand. Don’t run out but also don’t hand something too large. Make it easy and make it memorable but more importantly – make it actionable. When a potential buyer takes your catalog or info packet, they should want to keep it and it should contain information that is very easy to understand and very precise on who to contact, how to contact them, when they will get a follow-up email or letter from your company, your website details, address, fax, etc. Make it easy and make it so that the buyer doesn’t have to “think”.

3. Welcome your guests! Don’t just greet and say hello and ask for name cards (business cards) but rather bring them into your booth by separating the functions of greeting them and informing them. Greet them professionally and don’t rush to get their name card but rather try to build a relationship at the basic level by connecting with their needs. Example à Tell them 3 questions are free and the 4th costs $100 dollars as a joke to get them to laugh. Basically, you want to ensure every person who comes to your booth leaves with 2 things on their mind at the very least. One is that your company was absolutely professional and the 2nd is that they or someone they know could or wants to do business with you. Every person is powerful because every person has relationships. Be focused and welcome them professionally and treat them with respect and you will be building your business not trying to fight others for it!

4. Give them something free! Not samples but rather information. People are always looking for trusted partners even in suppliers. Buyers are not always the best people but many are and this business is like every business. It’s about money and relationships. Building trusted relationships can bring you money. Here is an example. Some buyers come to your booth and but are really looking for something else but don’t know where to go exactly in the trade show. Your company, being the most professional and focused, has the map of the entire show with circles on companies you think are good as well as some tips for them when they go there. What do you think these buyers would think of your company now? If they are not impressed and grateful, you don’t need their business. Most likely they will be very impressed and grateful. They may even introduce other buyers to your company and tell them how professional your company is. That is relationship building and selling. That is building your business.

5. Always have a place for the buyers to sit! Imagine you offered very cheap foot massages to attract customers and did all the above (focus, have information packets ready, really welcomed your guests, and gave them something for free in terms of information) or just had a place to sit and free soft drinks. Buyers, customers, everyone gets tired walking, talking, and doing this all for so many hours. Give them an oasis in the desert and they will stay! Then you have time to build relationships to build sales! That is focused business and that is why your company will succeed.