The Aussie dollar is low. Retailers are hurting.
Now is the time to health-check your importing/exporting processes and save.
The Customs process is one of the great unknowns for most businesses, even regular importers or exporters. Retailers can easily save thousands of dollars in extraneous charges just by better understanding the system and working smarter within it.
Platinum Freight highlights five areas where knowledge and negotiation can lead to real savings on every import/ export:
1. What are you paying in Australian port charges?
One of the greatest areas customs brokers are seeing over-charges at present is in Australian port charges.
Port Charges are negotiated between the supplier and their preferred shipping partners, and are often not even disclosed to the importer until the goods are approaching Australia!
So what can you do?
Firstly, ask a broker to confirm what a reasonable charge for your load should be. Then, ask your supplier to confirm the quote through their channels BEFORE paying the final payment before shipping. This gives you room to negotiate and save. The key is to understand the options, work with trusted partners and use expert advice, such as a broker’s.
2. Do you know your declared value of goods imported?
The value of the goods is determined on the day that the shipment departs for Australia – not the day that you placed the order or the day that you paid the supplier.
The dollar is falling fast at present. The USD exchange rate is sitting at around 0.7309 currently and changing daily. Six months ago it was 0.7773 and a year ago it was 0.938. We’re looking down the barrel at 0.60 by December 2016.
Mindfulness about fluctuation in the dollar and timing of shipments is critical for importers in today’s economy. Consider the dollar’s movement before making the purchase.
3. Can you work under the tax-free threshold?
Is there a way that your orders can be planned, paid for and shipped in installments? There are ways to avoid import duty, GST and an Import Processing Charge (saving you at least 15%) if your business’ orders can be flexible.
Think about drip-feeding your store with new stock shipped over time, rather than shipping, warehousing and then stocking off one large order, for which you will have paid significantly more.
This is a great opportunity for independent retailers and SME retailers.
The government has confirmed that in July 2017 the tax free threshold will be removed. Stay on top of changes and make the most of opportunities while they are still available. Seek advice from professional Customs brokers.
4. Do you capitalize on Free Trade Agreements to save?
Free Trade Agreements apply and change over time, depending on Australia’s international trade relations. Buying from countries with current Free Trade Agreements will negate duty charges provided the importer sources an approved Free Trade Agreement certificate.
It is also an opportunity for exporters. An international buyer could save up to 30% of the purchase price in fees and taxes if the Australian exporter sources an approved Free Tarde Agreement certificate and complying with the necessary paperwork to assist the buyer with their local customs procedures.
It might seem like a bit of work for the exporter, but a 30% saving could mean a repeat customer, and therefore guaranteed future business.
5. Do you know the audit rules for importing and exporting?
Border Force [Customs] can refer back to imports and exports documentation for up to five years after the event and if a fault is found in paperwork, penalties can be levied for a shipment bought or sold even four or five years ago.
A savvy retailer will ensure importing and exporting operations are of the highest quality and compliant with current legislation to ensure audits are not a nasty shock down the track.
Professional brokers offer audit compliance strategies to ensure clients are compliant with Customs and can have peace of mind that their systems are clear and correct.
For further information about importing or exporting costs and processes, or for help landing your next shipment, contact Platinum Freight Management on 1300 882 877 or get an obligation free Customs Clearance quote.