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How Much is Your Product Worth?

Personalised Freight Solutions (PFS) job is to assist, educate and facilitate.

An important service we provide is to assist our clients in understanding the value of their product when it lands at their door here in Australia.

What is Landed Cost? “A landed cost is the total price of a product once it has arrived at a buyer’s door. The landed cost includes the original price of the product, all transportation fees (both inland and ocean), customs, duties, taxes, insurance, currency conversion, crating, handling and payment fees”

Knowing the landed cost of the goods you are importing is vital to be able to gain an understanding on the viability of it in a retail market. The cost of importing your goods can equal if not exceed the actual purchase price of your goods.

Just today, on two occasions both myself and Christine heard “but the goods are only worth……….. and the shipping is double that!”.

It is important to research the cost to import your goods including all the import taxes prior to setting up an entire business model on your product. For example, you have a Chinese supplier who will sell you a 20′ container of chairs, they are offering a sale price of USD 22.00 (AUD 29.00 at today’s exchange) per chair for minimum order of 450 chairs. When looking at the retail market, you can sell these chairs for AUD 45.00 max to be competitive. This gives you a total profit AUD7,200 when you sell all 450 chairs.

However, what will the chairs be worth after you import them to Australia? I can tell you, by using our landed costing model that they will be worth AUD 39.00. This reduces your profit to AUD 4,500 total. To maintain your AUD 7,200 profit if that is what you have based your business model on you would actually need to sell these chairs for AUD 55.00 per chair. Does this make you AUD 10.00 per chair more expenses then your competitions? Can you sell all 450 at this price in the chair market?

Your freight forwarder should be more than a supplier who moves your freight into (or out of) Australia. Your freight forwarder should be able to advise you on the true value of your goods landed so that you have the confidence that your business is making viable decisions on the products it is selling.

Have You Considered? Documentation

As your freight forwarder we will liaise with your supplier to ensure documentation for importing your goods is correct leading up to departure from the port of loading and prior to arrival to Australia. We do however like our clients to have a working knowledge of requirements when it comes to documentation.

There is a few reasons for this:

1. These are your goods and ultimately your responsibility. A customs declaration (which is created through the information provided on the shipping documents) is a legal document that through the information provided will provide the amount of duty and GST that is payable to Australian Customs on arrival. The shipping documents along with the corresponding customs declaration is to be kept on record by the importer for a minimum of 5 years. Treat it as you do your tax return!

2. Some required documentation such as import permits can only be applied for by the importer (not the freight agent), guidance will be given but again it is the importers responsibility to ensure these are in place prior to arrival.

3. When negotiating terms of sale with your supplier, ensure they are prepared to provide all necessary documentation. Treatment certificates and packing declarations are the most common that a supplier would need to provide in addition to a commercial invoice. Getting into a position where by you have purchased the goods and engaged a freight forwarder to move the goods to then find out the supplier will not provide a crucial document for clearance may result in costs that have not been planned for or time delays on arrival.

Some Important links to provide further guidance and information on your documentation requirements:

Australian Customs

Australian Quarantine – Examples of Acceptable Documentation

We are also always available to discuss requirements specific to your business, contact us anytime!

Bec

 

 

 

Intro to Shipping Internationally

For those of who you have travelled internationally whether it be for business or pleasure, what’s the first thing you need to show before boarding your flight?

– Your airline ticket and Passport

To travel internationally and pass through airline security, customs & immigration barriers, you must provide all the right documents. The basic set of documents you would need; is your ticket to travel and your passport. However, you may also require visas, health cards and/or any other special documents dependant on the country you are going to.

When cargo travels internationally, there is no difference. Your cargo must also have a “ticket” to travel. In the freight industry, we call this a Bill of Lading, or Sea/Air Waybill. Your cargo will also require further documentation to pass through customs and quarantine barriers.

A basic set of documents required will include;
the Bill of Lading or Waybill,
Commercial invoice;
Packing list;
and Packing Declaration

However special documents may also be required which will be dependent on the nature of the goods and the destination.

Here is some examples of these special documents;
Weight & Measurement declarations;
Cleanliness declaration;
New & Unused declaration,
Certificate of Origin,
Manufacture declaration,
Free Trade Agreements,
Insurance Certificate.
Fumigation Certificates,
Dangerous Goods declarations and so on.

Going back to my analogy, there is one main difference between people traveling internationally and your cargo traveling internationally and that is, we can communicate when we need something or when something goes wrong and generally there is an airline host or hostess to attend to our needs.

So bearing this in mind, cargo must be handled correctly and right from the start. Having suitable packaging, timing and routing arrangements, clearance and compliance and correct documentation will all be necessary to ensure that a smooth journey for your cargo is achieved.

Did you know, not only will your cargo travel across at least two governmental and possibly cultural barriers, there is many geographical, climatic and handling hazards that may be encountered too?

That’s where the team at Personalised Freight Solutions comes in, let us assist you in this process. We can co-ordinate the documents, duty and tax implications, size and weight restrictions, special permits, route and schedule limitations, letter of credit stipulations and many other factors that require precise detail, timing and dedicated attention.

– Christine

Personalised Freight Solutions is an international freight forwarding company, simplifying the movement of cargo globally. Our services include import and export, sea and air freight, border clearances, and on ground trucking at both origin and destination.
165-171 Broadwater Terrace, Suite 8
Redland Bay
Queensland
4165
Australia
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