Friday, January 1, 2010

Importing 101 or basic infos should you decide to start an importing business.

2010- Round numbers... Mentionning numbers, I thought it was the right time to review the importing process and share with you the numbers-costs involved in importing besides the obvious ones: merchandise, transport and customs.

I am discovering this activity bits by bits and cannot help wondering if it is any different in other countries?

So here, once the merchandise made it to Israel, there are the Customs fees depending on what the goods are and where they are from.
If someone handles that for you (in Hebrew they are called "עמיל מכס"), you have to pay them.

The first batch we handled everything ourselves. We had a small size batch, nothing extravagant. We did it but it costed us time. I cannot say I understood the entire process and it seems to me so strange that in this day and age paper forms still need to be hand-written and then  be decifered laboriously  by another person to put the info in the computer.!!??? It is so not productive!

For the second batch we had to use the services of professional courier company due to the larger size of the import. They are supposed to handle everything and get paid for it. Well they cannot handle everything the first time they recieve our goods because they do not have the right forms.
So we received many calls from them to ask for the SII authorization form, and for the bank guaranty. The bank guarantee took 3 hours to obtain. Not that it is particularly difficult but it is tedious and consists in that case in the SII form, roughly 4 pages asking for name, address, calculations of the money amount ( a %  linked to the size of the import). I have to thank our banker who did all this after a long day of work and managed to smile through it. I believe it was a first for her as well. ( Tsipi if you ever read this, we are grateful!  ^__^ )

And once the merchandise will be in our hands there is this other cost of SII checking the products are really - indeed- the products we declared.

Frankly I am still not very convinced of the usefulness of the process.:
- We pay custom tax on the products we declared.
- We pay VAT on all the products we declared.
- We pay for the SII form that the products have been checked and are fit for the market.
- We arrange for the bank guarantee ("ערבות בנקאית") that will ensure we sell the products as we said.Otherwise they take that guarantee from us ( that amounts to % of the merchandise)
- We pay for someone from SII  to come check the merchandise once in our possession.

Basically we pay, pay, pay pay , pay, pay.....................................


I am starting to imagine 2 possibilities:
1- the world is full of  importing crooks whose business is to avoid the law, or
2- that the institutions need a lot of money to finance themselves ?

When we started this adventure, we were told that 80% of small importers like ourselves do not make it past the first year due to all those costs.Well I am not surprised nor am I surprised to imagine importers looking for way to get their business going  differently.

2010: it will be the Year of the Tiger... sounds like an energetic year!
The Tiger is in Sophie and she wishes everyone a Happy 2010 !

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