Selecting Import Productsand Suppliers

- Products that are unique- Products that are less expensive- Products that have proven demand- Products that are of better quality

Types of ProductsTypes of Productsfor Importationfor Importation

Domestic market research Trade publications Foreign travel Trade fairs and shows Trade offices

Finding, Assessing, and SelectingFinding, Assessing, and Selectingthe Productthe Product

Landed-Cost Survey, DM Import Company, Davie, FloridaSupplier: V. Maundo, Nairobi KenyaQuantity: 150 Makonde carvings Gross sales price 3500.00 Less cash discount (15%) 525.00 Net sales price 2975.00 Landed cost Purchase price 2975.00 Packing ----- Inland freight ----- Duty (2975 - insurance ($50) + Freight (800)) = 7% (2125.70) 148.75 Brokerage and banking charges 160.00 Custom bond fee 50.00 Merchandise processing fee 8.00 Harbor maintenance fee 2.00 Total landed cost (CIF, Miami) 3343.75 Expenses Advertising ----- Re packing 15.00 Interest 10.00 ABI (Automatic broker interface fee) 10.00 Total landed costs and expense 3378.75 Unit cost $22.52 per item Suggested selling price $45.00 Net Profit 6750 ($45 x 150) - 3378.75 (22.52 x 150) = $3371.25

Landed CostLanded Cost

- Purchase sample- Request inspection by customs- Check with freight forwarder- Estimate price

Selecting the SupplierSelecting the Supplier

1. Product quality, brand name2. Market appeal, minimum defects3. Other supplier benefits: timely delivery,

warranties, after-sales service, reliability4. Protection of intellectual property rights

Selecting the Supplier: Selecting the Supplier: Important ConsiderationsImportant Considerations

1. High per capita income2. Population size3. Price of imports denominated in foreign

currency4. Exchange rates5. Price of domestic goods relative to imports6. Price elasticity7. Government restrictions, availability of

foreign exchange

Determinants of Import VolumeDeterminants of Import Volume

Direct channels of distribution:- Foreign producer exports through its

subsidiary Indirect channels of distribution:- Entails exporting the product to an

intermediary

Import Marketing ChannelsImport Marketing Channels

1. Open account2. Consignment3. Documentary collection4. Letter of credit

Financing ImportsFinancing Imports