0 comments on “How Much is Your Product Worth?”

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.

0 comments on “China Freight Rates – 2015 vs 2016”

China Freight Rates – 2015 vs 2016

With the first Quarter of 2016 behind us, it is interesting to check in to see where the freight rates Ex China are sitting.

As you can see from this chart, rates are significantly lower than that of 2015. It was around this time last year that we reported in on rates and how they were trending. What seemed like rates too good to be true in March, April or May 2015 now seem a little high when we you place them in comparison to March or April of this year.

Freight Rates - 15 vs 16

What are the drivers of low freight rates? And why is it a constant up and down situation? It is a simple case of supply and demand. With the low Australian dollar (in March for Example as low as 0.67) and the down turn in mining in Australia, the vessels out of China are carrying less cargo.

To try to make a comparison it is like the circle of life

circle of life

Today’s media is full of reports on the unrest in our government, the Australian dollar movement, Mining and taxes all these economic drivers will affect where the freight rates sit.

0 comments on “Have you Considered? Packaging”

Have you Considered? Packaging

Our series on “Have you Considered?” has all been about highlighting topics that we can take for granted, our recent post regarding packaging is one of these topics.

It is taken for granted, more often than not, that if you are buying from an overseas company who facilitate selling their goods to an international market that they know how to package goods or will ensure goods are adequately packed for export.

A question we are often asked is “how can we ensure that goods will be packaged adequately?”, the answer to this question is to check, check and check again. In your initial confirmation of purchase advise of your expectation on packaging, communicate with your freight agent your expectation and have your freight agent express further the expectation on packaging.

To provide further assurance on the standard of packaging, we would suggest to engage in a pre shipment inspection service, Personalised Freight Solutions can provide some direction in this area, please contact us via email / phone / Social Media to be provided further information,

Bec

0 comments on “Half Way”

Half Way

It is hard to believe we are rolling into June! A time of year where we reflect if we have achieved what we set out to achieve this year, we start to gather figures and paperwork for the tax man and many people start to tell us how may weeks it is until Christmas!

With receiving our China contract rates for June yesterday, and seeing how incredibly low they were, it prompted me to analyse how the rates have moved in the first half of this year.

Mapping January to June this graph shows a solid start with no movement really between January and February, a drop in March which was due to container volumes being low after Chinese New Year with an increase come April. From April until now, the rates have decreased substantially.

I will continue to record and graph rates each month, if anyone would like to have insight into any specific port or country please contact me directly rebecca@my-pfs.com.