International Product Sourcing Made Easy, Part 1

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When sourcing internationally, products usually ship via air or sea. Each has advantages and disadvantages.

Shipping by air is fast and easy, but the cost is higher per unit than shipping by sea. When you begin to place larger orders, sea shipping can save you money. It can also take much longer (up to a month and a half) to receive your goods. Sea shipping is best done with large shipments and when you’re not pressed for time.

Because you will be shipping a small order of lightweight products to test the market, we recommend you start with an express air service (e.g., DHL, FedEx, UPS). You can open your own account, but the most economical solution is just to use your supplier’s account.

If you have a very lightweight product, you might decide to continue shipping by air for faster inventory control. Or, if you are concerned about the timing and running out of inventory, you can cover the gaps with smaller air shipments. For example, when your business is ramping up and you’re at a time and a place where it makes more sense to ship by sea, you can work with your supplier to make sure they send a smaller shipment via air to make sure you don’t run out of inventory. People do this all the time.

As you learn to ship by sea, you will start to keep more volume in stock. But when you’re just starting, you’re probably going to run out of inventory a few times. Just make sure it doesn’t stay that way for too long.

When shipping by sea, you will need a freight forwarder to take possession of your goods, clear customs, and make sure all duties are paid. You don’t have to worry about that when shipping by air, because the company you ship through is the freight forwarder — and they just handle it.

Shipping by sea is a more complicated process. But don’t let that stop you. Use a freight forwarder to handle what they do best (e.g., customs, duties, paperwork), and those experts will seamlessly bring your goods into the country. Think about when your car breaks down.

 You don’t run into a store and buy a manual on how to fix it, because that’s not your job. Let the professionals handle it, and you will find the entire process of sea shipping isn’t nearly as scary as some people make it out to be.

There are a lot of freight forwarders out there, so be sure to phone several of them and get a quote. Do a cost comparison, and get a feel for how they do business. Building a relationship with a good freight forwarder really pays for itself, and it makes the whole process super simple.

And remember, shipping is a cost of doing business. We’re all in the same boat — you, me, Walmart, any retailer bringing goods from anywhere.

Your first order will most likely be very small, so your shipping costs may seem disproportionately high. That will cut into your profit margin, but don’t worry. Those costs will decrease as you ramp up sales and increase your order sizes. In fact, many of your costs will go down as you scale up your business and have more units manufactured.

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