Importing: the 10 basic steps

Importing is often thought to be easier than exporting and perhaps in some ways it is. But there can be many traps for the unwary and inexperienced and it is important that you understand the basic steps before you even think about placing an order.

1. Identify potential suppliers and obtain a catalogue, samples, prices and payment terms

Chambers of commerce, industry associations, foreign embassies and consuls and government departments of trade can help in the process of supplier identification.

The price should be based on and include a reference to Incoterms®. For example:

  • AU$500 CIF Fremantle 2000 Incoterms; or
  • US$100 FOB Singapore 2000 Incoterms.

Incoterms® are published by the International Chamber of Commerce (ICC) and represent the foundation for the interpretation of trade terms between countries. Therefore, a reference to Incoterms® in the contract price reduces the likelihood of a misunderstanding between you and the supplier.

Download a PDF of the Incoterms® Quick Reference Guide published by the Australian Customs & Border Protection Service.

2. Select a customs broker to assist with importation

Customs brokers expedite quick, trouble-free clearance of goods through Customs and Quarantine. They are experienced in valuation, duty rates, tariff concessions and freight.

To find a Customs broker you can refer to the Yellow Pages® or visit the Customs and Border Protection website for Licensed Customs Brokerages or search the member directory of the Customs Brokers and Forwarders Council of Australia Inc. (CBFCA)

To find a Freight Forwarder you can can refer to the Yellow Pages® or contact the Australian Federation of International Forwarders.

3. See the international division of your bank

Discuss the financial considerations with your bank:

4. Prepare a cost analysis to arrive at a landed cost

Make sure you include all costs. For example, freight, handling charges, insurance and customs. Your insurance broker can undertake this calculation if you wish.

Calculating your landed cost on imported products

In some cases the costs are built into the price quoted by your overseas supplier:

Free on board
– includes ex-factory price, inland transport and handling charges

Cost, insurance, freight
– includes ex-factory price, insurance and freight to the port of arrival

Free into store
– includes ex-factory price, insurance and freight to importer's warehouse.

Ex-factory price = price charged by supplier in country of origin.

In some cases the costs are not built into the quote by your overseas supplier. The price will then include ex-factory price plus:

Inland Transport
Within the country of origin to port of departure.

Handling charges
At port of departure. For example, inspection and loading.

Cost of getting goods to Australia.

Insurance of goods whilst in transit against damage, loss or theft.

Local handling charges
At port of arrival. For example, unloading and storage at wharf.

Customs duty
Check customs department or your broker for rates.

10% of value of taxable importation (goods + duty + freight + insurance).

Import licence fees
Check customs department or your broker for rates.

Interim storage charges
For storing prior to receipt in your warehouse.

Charged on delays in clearing goods.

Quarantine fees
For storage of goods, usually livestock in quarantine.

Fumigation fees
For treatment of goods by fumigation process.

Transport to local warehouse.

Testing and certification
For safety compliance.

Customs brokers fees
For facilitation of importation process.

Exchange fluctuations
Depending on transaction currency (insurable but can be costly).

To either comply with local regulations or to enhance marketability.

Bank charges
For processing of transaction and money transfer.

Note: Not all of the costs listed above are applicable in all situations.

5. Is it commercially viable?

Having arrived at a landed cost and investigated the marketplace to determine what your selling price should be, is there sufficient margin remaining to cover all your business overheads and leave an acceptable profit?

6. Identify any special requirements

Establish if there are any special requirements such as import quota restrictions, certificates requires to import restricted goods or special inspections on arrival. Your customs broker can advise you on these matters.

7. Place an order with the supplier

Request a written confirmation of receipt and acceptance of order. Ensure the terms and conditions of the contract of sale are clear to both parties e.g. product quality, specifications, quantity, price, price basis, payment terms, date required, freight arrangements and documentation.

8. Advise your customs broker of the details

Unless you intend to clear the goods yourself, provide your customs broker with comprehensive details of the transaction and copies of relevant documents to facilitate trouble-free and speedy processing and clearance of the consignment. Your broker will advise you when the shipping documents have arrived and make sure they are in order before you accept them.

9. When the goods arrive

When the goods arrive, make arrangements for your customs broker to clear them through customs (and quarantine if applicable). You will need to provide the bill of lading/ airway bill, commercial invoice and any other relevant documents.

10. Take delivery of the goods

Examine the consignment immediately for insurance purposes. Give a clean receipt for the goods only once you are satisfied as to quality, quantity and condition.

Refer to the Customs website for acurate information about importing – particularly entry costs, concessions, tariff classification and assistance.

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Related Information

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  1. This is an SBDC small business brief – a summary of essential information about a popular business topic.

    There is a series of small business briefs and also step-by-step business guides that make it easier to deal with the complexity of running a small business.

  2. Refer to the Customs website for acurate information about importing – particularly entry costs, concessions, tariff classification and assistance.

  3. Get help when assessing opportunities for importing. Call 13 12 49 or email us to speak with a specialist small business adviser.

  4. From free Business Basics workshops to more specialised workshops and one-to-one advisory sessions, we can provide support – directly and through our partner organisations.

  5. Sign up for our monthly e-news, which brings you all the latest from the SBDC and the West Australian small business sector.