AIWIS Review – Let’s talk with your clients

AIWIS Review – Let’s talk with your clients

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When obtaining quotes for small orders, it is common for aiwis review to quote on the basis of using aircouriers. In fact, I would generally recommend that you ask for the quote to be on that basis. Make surethat all the quotes are on the same basis. In particular, be sure that customs clearance charges areincluded. Once you have moved on to ordering larger quantities, you have several freight options toconsider and you might decide to ask the supplier to quote on more than one method as follows:

14.1. Air Courier.It is worth considering using air couriers even for larger shipments mainly because of speed of delivery,which can make it easier for you to work with smaller inventories. That can mean cost savings that canoutweigh the extra cost of delivery. There is also the convenience of having the entire process handledfor you. In this case the supplier would quote door to door. (C & F [See 33.5] door to door). Please readagain the first paragraph of Chapter 4.

14.2. Air Freight.Used for fast delivery of larger consignments. I recommend using a local freight forwarder, who mustinclude absolutely every cost including clearance and delivery to your premises. In this case the supplier

would quote you FOB [See 33.9]. Take care to ensure that they mean delivered to the port of shipment.The quote should state FOB Port. The name of the port should be stated. FOB means loaded on boardin almost every country except China.To comply with international trade conventions, it should have the same meaning in every country, butin China it often means “ex-factory.” This can mean there will be extra “inland” charges, which caninclude freight to an airport or sea port, road tolls, Chinese Customs charges and maybe some othercharges that they are busy dreaming up right now. The proper term for ex-factory is EXW.If shipping by air freight, (NOT courier door to door service, but airport to airport) you may have extracosts similar to those mentioned in 14.3 below, so be sure to get a quote that includes all costs to yourdoor as above.

14.3. Sea Freight.This is only used when you have a large volume shipment, and can afford to wait up to 2 months toreceive the goods. When sea freight is necessary I would prefer to use the services of a freight forwarderrather than rely on the supplier to handle all the necessary work to ship by sea. In that case the freightforwarder is the one to ask for the aiwis review, and the supplier’s quote would be for FOB.

As in 14.2 the quote should state FOB Port. Insist that your forwarder includes in their quote all costsincluding delivery at your address; otherwise you could get a bad shock. Charges after the cargo arrivesat your port can include customs clearance fee, transport to a container depot, cost of unloading thecontainer and other fees, but will not include the duty or tax. These will be paid for you by the freightforwarder and collected from you, usually before they will finalize delivery.If your order fills a container; that is called Full Container Load (FCL). If it is less, it is called Less thanContainer Load (LCL). If unloading is not done within a specified time, usually 3 days, you will pay acontainer rental charge.I recommend that you never attempt to collect your shipment from a port. You will be treated as anoutsider, probably given wrong information, ignored, bypassed by trucks driven by regulars, and may berequired to come back the next day, when if you are lucky, your goods might be loaded on your truck.It is sometimes possible that shipping small quantities by sea can cost more than shipping by air. It isworth getting your freight forwarder to quote for both air and sea freight.

14.4. Doing the Calculation.Now that you have your quotes, remember that there will then be other costs, such as Customs Duty andSales Tax. Your customs broker or freight forwarder should be able to tell you in advance how muchthese would amount to.

Unless you are using a door-to-door service, it could be foolhardy to attempt to make all thearrangements and handle all the red tape yourself. For this reason I urge you to use a customs agent orfreight forwarder for such shipments. Talk to them before placing an order.In order to do the calculations yourself, you will first need your total price for the goods, plus freight,plus insurance.You can obtain an idea of duty rates at www.dutycalculator.com. This service is currently free for up tofour calculations, after which you will need a paid subscription. I say “an idea”, because opinions onwhich tariff codes are relevant can vary, even between experts. If you want to be certain, you shouldobtain a ruling from your official government Customs office. See 14.5.You will have already asked your customs agent the duty rate, and you should not be in business if youdo not know the rate of sales tax applicable. Let us assume goods cost a total of $10,000 includingfreight and insurance, and there is a duty rate of 3% plus a sales tax rate of 5%.

Calculate as follows:CIF (or C&F) cost $10,000.00CIF x 103% = landed cost, including duty $10,300.00Landed cost, including duty x 105% = landed cost including duty plus sales tax $10,815.00Add customs broker’s fee (assume $250.00)   $250.00

Total Landed Cost $11,065.00If you have imported 1,000 items in the example shipment, each has cost you $11.07 at the point ofentry. You need to add delivery to your home or warehouse unless your freight cost has included that.You also need to add the cost of shipping to your customers. This will give you some idea of what youneed to charge in order to make the desired aiwis review . Don’t forget to allow for breakages, and for stockremaining after your sales effort has run its course. A prudent business person would also know inadvance what the selling costs will be, including any eBay, Amazon, or PayPal fees.

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