Importing from the USA

[Spearmint]

I stumbled upon a product today which happens to be sold in the US that would work nicely with my product. Both would work well together.
After enquiring with the seller in the US, I discovered that they don't currently sell to the UK market but would like to and they asked if I know of a distributor that they could work with.
I'm intending to sell my product through an online shop along with other related accessories, and this product that I discovered today could be one of them, but is there another opportunity that may be worth pursuing?

My thought process is as follows:-
I'm wondering whether I could offer to be their distributor but I dont really know whats involved there. Is this likely to be beyond me? Are they likely to be after something more than a solitary online shop selling just one of their products? They make a range of about 20 items which are unrelated to what I sell but could be sold via my online shop.

When my online shop is up and running, I will only have a small product range, so having more stock of a different product may make it more attractive and interesting.

Should I make enquiries as a licensee rather than a distributor?

What about the red tape associated with acting as either a distributor or a licensee?

Do I ignore this potential business opportunity and just buy the product that I need as and when I need it or should I attempt to become their distributor?

I don't have the funds to buy great volumes of stock from them (as a distributor would) but hopefully if my business takes off, I may be better placed to do that in the future.

 

[imaginarynumber]

If they are not selling anything in the EU they might be willing to offer you exclusivity in the UK and Ireland. I would expect that they would want you to be a full line distributor, ie selling the bulk of their range. It is however reasonable that they would give you targets with regard to sales.

Some firms are very reasonable and will cut you quite a bit of slack for the first year or two. They might even be williing to defer payment and offer financial assistance with regard to radvertising/raising brand awareness.

If things go well, in time you could even ask for the rest of the EU

If you don't ask...

 

[Spearmint]

Thank you for taking the trouble to reply. I thought I'd posted it in the wrong place at first, as no-one had responded. I appreciate it.

 

[imaginarynumber]

Hi spearmint.

I am only marginally less green around the gills than you but I do find this forum invaluable.

We sold a particular type of supplement. Noticed that there was an American version that was superior. Placed an order and then thought "why not ask for exclusivity" afterall they aren't selling anything over here.

As things progressed we ask to be EU distributors.

It's still early days but they are willing to help us to help them, so m8ch so that the CEO is flying over to help us at our first trade show and will permit extra trade discounts to get the products into shops.

Tbh we might not have been their ideal partner but no one else was knocking on their door and we are happy to deal with the redtape.

they are even willing to defer payment on the core products for upto 6 months so that we can regulate supply.

I guess the difference is that we are committing to devoting at least 90% of our time to promoting their brand.

Regards

 

[Deleted member 127702]

There's not too much red tape involved in being a Distributor - my company has imported good from the USA for 17 years.

One area that can catch you out is Import Duty; make sure you have the correct classification for each product that you import, and check that whoever is processing the imports for Customs is entering the Tariff Codes that you have provided. It may only be a few percent, but if you get it wrong HMRC can back-charge you for 3 years which soon adds up.

 

[Spearmint]

Hi spearmint.

I am only marginally less green around the gills than you but I do find this forum invaluable.

We sold a particular type of supplement. Noticed that there was an American version that was superior. Placed an order and then thought "why not ask for exclusivity" afterall they aren't selling anything over here.

As things progressed we ask to be EU distributors.

It's still early days but they are willing to help us to help them, so m8ch so that the CEO is flying over to help us at our first trade show and will permit extra trade discounts to get the products into shops.

Tbh we might not have been their ideal partner but no one else was knocking on their door and we are happy to deal with the redtape.

they are even willing to defer payment on the core products for upto 6 months so that we can regulate supply.

I guess the difference is that we are committing to devoting at least 90% of our time to promoting their brand.

Regards

Well, good on you for taking the plunge. It looks like its paid off

 

[Spearmint]

There's not too much red tape involved in being a Distributor - my company has imported good from the USA for 17 years.

One area that can catch you out is Import Duty; make sure you have the correct classification for each product that you import, and check that whoever is processing the imports for Customs is entering the Tariff Codes that you have provided. It may only be a few percent, but if you get it wrong HMRC can back-charge you for 3 years which soon adds up.

There are obviously many companies like yours who are more experienced with the distribution process between here and the States. My initial concern was the quantity of goods that one would be expected to buy, as an initial order or are firms that trying to break new markets generally quite flexible when dealing with new companies particularly start ups. I suppose one has also got to consider the storage costs of the same as well, and the likely storage turnaround time.

 

[imaginarynumber]

You can phone HMRC and ask them for the commodity codes based on the description that you give them.

They will give you codes for 5 products per phone call but you can phone back as often as you want. number= 01702 366 077

You can also find them online

http://tariff.businesslink.gov.uk/tariff-bl/export/sections.html?export=false

Never assume that the code given is correct, even if you ask for a BTI (binding tariff information -aka agreement). Check and check again.

Some products fall under a tariff quota system- once the quota has been reached the duties will change. In our case a product containing sugar would go from a percentage per value to a fixed price per weight when the quota was reached. No one will be able to tell you when the quotas will be reached though.

We have found that contacting port authorities and giving them a run down of our orders, before placing them, is the best way to reduce the risk of holding/storage charges when they eventually enter the port prior to release.

Depending on the type of product you may have to change the labels to ensure that they are compliant. We just overlabel as the need arises and ensure that our marketing ommits any naughty words, eg natural microbial.

Ask for shipping company recommendations- we still haven't found one that doesn't bump up the price in transit...

Good luck

 

[PowerForwarding]

If you need any advice and a cost for shipping goods please email me on [email protected]

 

[scrummy]

Any recommendations on who to use for frieght forwarding from the USA?