Bob Ronai

Bob Ronai has extensive experience with multi-country transactions with over 40 years experience in back-office support for exporters and importers. He heads Import-Export Services Pty Ltd, an independent provider of document preparation and consultancy services to exporters plus public and in-house training seminars. As well as being a member of the Australian Institute of Export since 1975, he is a member of the Australian Institute of Management (NSW) and is on both the Banking Technique and Practices and newly-formed International Trade Committees of the International Chamber of Commerce Australia.

IMPORT EXPORT BASICS - ADVICE FOR THOSE NEW TO INTERNATIONAL TRADE

What does “export” and “import” mean? They mean simply sending products across borders, whether in one direction or the other They are often a vital part of a business’s process of sourcing and marketing products, but they are not a business in themselves.

I sometimes get approached by people wanting to get into importing and/or exporting and I always ask, what kind of product are you looking at and what is your background in that product? The great majority of current exporters and importers have been in business in a particular field, have built an expertise in that industry, and then find that they need to directly source product from overseas, ie import, or they receive enquiries from outside Australia for their products, ie export.

Quite apart from product knowledge, an exporter or importer needs to have a working knowledge of other areas such as international payments, international freight, customs, terms of trade.

Inernational payments:

As an importer it is potentially dangerous and detrimental to cash flow to pay up front before shipment. Importers should try to negotiate extended payment terms or as the second-best option pay by letter of credit (L/C). The latter will need a good relationship with the importer’s bank.

As an exporter it is dangerous and detrimental to cash flow to offer extended terms or payment on shipment. It is also difficult to compete for sales when requiring payment up front as so many Australian companies do. The safest workable option and quickest way of getting paid is an L/C, and extended terms can be offered on a confirmed L/C. In second place to an L/C is debtor insurance.

International freight and customs:

Every SME involved in exporting or importing should find themselves a reliable and experienced freight forwarder to look after international freight matters for them, and to arrange import customs clearance if relevant. The relationship with a forwarder is important, ideally they will have staff who treat their clients as VIPs every step of the way, and have reliable effective overseas agents or offices in the countries involved. It is nevertheless worthwhile periodically checking freight rates and service levels with other forwarders so that complacency and slackening of service standards are avoided.

Terms of trade:

Every exporter and importer should make themselves familiar with the correct usage and meaning of the various terms of trade. They should know that a term like Ex Works is incorrectly used virtually every time it is heard, as are FOB, CFR and CIF. These terms were never intended for airfreight or containerised shipments, they came from the sailing ship days. The current and only internationally-accepted guide to these terms is called Incoterms published by the International  Chamber of Commerce. These guidelines have recently been extensively reviewed and re-written with the new version coming into effect on 1 January 2011.

The trickiest circumstance is when an importer of a specialised product finds themselves being approached by potential overseas buyers. They need to set up systems to ship directly from one country to another without coming to Australia. It is critical that their end-customer doesn’t discover their buying price and the supplier doesn’t discover their selling price.

International trade, especially exporting, can make a world of difference to many Australian SMEs.

Website: http://www.exports.com.au 

Import-Export Services is exhibiting at Import Export Show 2010. Bob Ronai will be presenting within Freight & Logistics for Beginners workshop
http://www.importexportshow.com.au/product_details.php?page=1&pID=28 

Website: http://www.import-export.com.au