Importing from Bangladesh

[kamal1080]

Hi,

I am a newbie here. Thought someone would be able to help me out.

I am trying to import ladies cardigans from Bangladesh. I have sent a product sample through royal mail today to a manufacturer and they told me that they are ready to work with me.
But how do we trust the manufacturer is genuine and I am also new to importing. I am just starting a business and all are new to me. The manufacturer also told me that they only accept payment with Letter of credit (LC) or Telegraphic Transfer (TT).
Can someone help me how all these processes work from starting, sampling, payment, importing and products arriving at my doorstep?

Thanks in Advance.

Kind Regards,
Kamal

 

[Wavecrest Ltd]

Hello, I have been involved in the shipping business or nearly 30 years and happy to advise you.

If you have concerns about the reliability of the supplier my advice would be to get on a plane and visit them for yourself. See their factory and offices.

With regards to the import process I would suggest you get a number of samples made and sent over to you for approval/QC checking before you place a full order.

With regards to payment terms, a letter of credit in simplistic terms is a banking document which enables your supplier to get a guarnteed payment through the banking system provided certain provisos are met (by them) - for example goods are shipped by a specified date and docments AAre all in order. A letter of credit gives you and the supplier safeguards. However, there are costs involved. Your bank will charge you for opening the letter of credit (can be several hundred pounds depending on the value of the contract)

A more common payment method is the telegraphic transfer. This is basically a wire transfer. Much cheaper but you don't have any safeguards offered by the letter of credit. It may be possible to negotiate a part payment up front say 30-50% ofnthe total anount to your supplier and the balance paid once goods have been shipped.

With regard to shipping we would recommend you ask your supplier to quote prices FOB Chittagong. You can then organise your shipping through a UK freight forwarder.

When the goods arrive in the UK (probably Felixstowe) they will need to be customs cleared and duty/VAT paid to Customs. The duty rate is likely to be around 12% depending on the exact description of the goods. VAT is 20%.

I hope this gives you a few pointers for starters.

If you need any further help, please feel free to contact me.

Glen

 

[kamal1080]

Thanks Glen for your quick response.
Just to make you aware, I am not ordering in a big quantity. Initially, about 1000 cardigans and then gradually more and more.
Is it best to use DHL, FED EX, UPS, for this quantity?
Also I am not VAT registered, do I need EORI No?

Kind Regards,
Kamal

 

[Wavecrest Ltd]

I would say as a general rule of thumb if the shipment weighs less than 100 kilos use DHL or someone like that. If it is a bigger amount then sea freight will be more economic.

You would need to get an EORI number but you won't be able to apply for it until your first shipment is ready as you have to send Customs copies of the shipping documents, commercial invoice etc with your completed application form.

Glen

 

[kamal1080]

Thanks for your informations Glen, I will contact you should I need.

Regards,
Kamal

 

[TariffTel]

As another form of security you may want to use is a pre-shipment inspection company to inspect your goods before they are shipped. There are a few in the UK that have operations overseas such as Bureau Veritas, Cotecna Inspection, Intertek Testing Services (ITS) and SGS. If you do a google search you should find them.

Cheers
Mark

 

[DJR51]

Just a note about EORI applications - make sure you complete the correct form when the time comes, as there is one application form for VAT registered applicants, and a slightly different form for non-VAT registered applicants.

 

[Maple Sourcing]

I am interested in Bangladesh manufacturers too, hope you can share more progress with your sourcing, thanks.

 

[jahir123]

Dear Mr. Kamal

I hope I can assist you. if you want you may contact with me. Currently I am in Uk.
rgds
jahir