International Imports

[MatSpencer]

Hello,

 

We are trying to set up a dealership with a Russian Company.

 

Besides all the import tax, VAT and delivery costs. What else is involved with the import of goods for re-sale within the UK?

 

I hope there will be people on here who have experienced this and can give some advice!

 

Also, As a dealer, What sort of things would you write in to your Terms and Conditions of trading. Things that don't immediately stand out, For example, What happens if a product is faulty? Will they pay for the delivery/surcharge involved with a replacement (Assuming the product is still in warranty?)?

 

Can people also shed some ideas with what they would expect from someone dealing these goods. If you were a potential client interested in these products, What would you want from us as a supplier?

 

I look forward to hearing your thoughts,

Thanks,

Mat Spencer

[Jivemaster]

You will be totally liable for the costs of getting CE certification and keeping a check that the product continues to comply with all the relevant EU legislation. You will be totally liable for incidents caused by your product, you will be totally liable for warranty claims for your product. If anything physically arrives in the EU you will be responsible for it's WEEE compliant disposal if it fails to comply with CE (so cannot be sold!). You will need to consider your weee liability for the goods should they reach the end of there useful life. You must consider the RoHS issues relating to import and manufacture. You will be totally liable for any copyright design or patent infringement that the product incurs.

;)

[boswell]

You are the seller and so are responsible for warranty/repair etc. Where you get the kit from does not come into it. the buck stops with you.

 

Memo to self. must look at profile of OP before I bother posting!! Sounds like a homework question

[ramdram]

I gather you are involved with a commercial outfit (suggest you review the white text against the backgound btw, I found it not too easy to read).

 

Might be an idea to have a natter with your accountant first. The accountant is far more likely to know where to get the info you need, and of course is obliged to be professionally spot on.

 

You know this already.

[David Ripley]

EORI needs to be sorted to ease your way through customs HMRC - EORI Website

 

You'll still need to pay duty, VAT etc at the point of entry though

 

David

[Brian]

Are you going to be a Dealer, Distributor or Commercial Agent?

[MatSpencer]

Memo to self. must look at profile of OP before I bother posting!! Sounds like a homework question

Thanks for the reminder to update my profile...Finished my college course last June with virtually full marks.

 

I gather you are involved with a commercial outfit (suggest you review the white text against the backgound btw, I found it not too easy to read).

Yes, I work for myself, Currently redoing my aspect of the website.

 

EORI needs to be sorted to ease your way through customs HMRC - EORI Website

 

You'll still need to pay duty, VAT etc at the point of entry though

Totally understand having to pay duty and tax - As per the original post. But will defo look in to that link

 

 

Are you going to be a Dealer, Distributor or Commercial Agent?

We will be reselling products sold to us from Russia on behalf of the manufacturer.

 

Thank you Jivemaster, A lot of those I wouldn't immediately think off unless I'd done this kind of thing before.

 

What about from a client point of you? What would you expect to from us? I'm thinking kind of product support etc etc.

 

Thanks

[SoLiEn]

Slightly O/T

 

Just wondering, would it be easier and less hassle to act as a direct distributor, they take the money you get commission? would that have any impact etc on who is responsible for disposal?

 

Just curious

[Brian]

We will be reselling products sold to us from Russia on behalf of the manufacturer.

Ok, so you're going to be a stocking distributor? I don't believe that your are reselling on behalf of the manufacturer.

 

The distinction is...

 

A Dealer will take orders and then back-to-back that order onto the manufacturer.

 

A Distributor buys the product and holds stock locally.

 

A Commercial Agent accepts orders on the manufacturers behalf. The manufacturer ships the product directly and invoices for it directly while paying the agent a commission.

 

Other than as an agent you are in business on your own behalf.

[kerry davies]

Mat, I'm not sure I understand this; "We will be reselling products sold to us from Russia on behalf of the manufacturer."

(Crosspost with Brian)

What I do know from personal experience is that Eastern bloc imports can be tricky on lots of Jive's points, particularly regarding Intellectual Property grounds. They do not have anything like the same IP regulation that the EU does.

 

Our initial shipment of kit knocked everyones socks off at PLASA a long time back which led to lots of interest. We then brought only a few more sets over just in case of problems and were never so glad. It cost us more due to the lack of the amazing bulk discounts they offered, but it was worth it.

Quality did not deteriorate, it fell off a bloody cliff. We then discovered that it was a disguised copy of a world leading brand and even though we stopped the imports we still had problems with rebates and warranties. We avoided patent/copyright penalties purely due to personal contacts and plenty of grovelling.

 

I would seriously recommend a visit to the manufacturer before proceeding, a web photo of a hi-tech factory is no substitute for a visit to their shed. I would also get some legal advice as to your own liabilities. BR is a good source of general advice but you do need to be aware of the legal issues around whether you are Dealer, Distributor or Agent as Brian implies.

[Jivemaster]

From my limited knowledge (you really should consult your own solicitor for a refrerral to a specialist in EU/ Russian Federation trade) The person or entity that brings a product into the EU for placing that product on the market is fully liable for all aspects of the deal, and that person or entity must be inside the EU. Remember that buying a small number of a product for your OWN use isn't the same as bringing in container loads for sale.

 

A distant friend of mine brings pro audio kit in from China. His policy is to visit them, see the factory, then order and pay for two items. If these arrive they go into storage. two months later he orders and pays for two more, and two months later two more again. THEN he gets all six open together and sees whether the parts are the same and the build quality is constant. IF the parts are all interchangeable and the quality is OK then he orders a thousand as it's a production item at a factory. However if the products are not the same inside then he's probably just been sold some shed made look alikes each time, and he doesn't buy! Remember that mostly you WILL have to caniballise new stock to get spare parts for sale and warranty repairs.

 

An acquaintance brought over four moving head lights from China, He took advnce payment from lots of people and ordered a container load for sale - they were nothing like the samples, and didn't work. He ended up almost broke trying to refund all the advance payments from personal assets.

[Brian]

The person or entity that brings a product into the EU for placing that product on the market is fully liable for all aspects of the deal, and that person or entity must be inside the EU.

Correct. However, the manufacturer can appoint an Authorised Representative, based in the EU, to be responsible, in the legal sense, for the CE marking (and IIRC RoHS and WEEE).

 

Remember that buying a small number of a product for your OWN use isn't the same as bringing in container loads for sale.

Not quite.

 

If we take CE marking...

 

CE marking:

applies to all equipment put into service in a public or private capacity for professional or non-professional use, or psid for or free of charge;...

[paulears]

A fairly interesting technique I've seen used on ebay is to list the product as used, but describe it in the body as 95% new - whatever this means. I've bought some of this kind of stuff and discovered it's 100% brand new, still in manufacturers boxes and sealed - and protective film over the displays. Is there a benefit to descriptions like this?

[ramdram]

Ref the mainly cautionary advice above, and I believe you should take very careful note of such things as quality dropping off, assuming you even get a container of whatever...it may be a very shrewd move to discuss your idea not only with your accountant but your bank.

 

I would suggest also that asking a technical forum how to word a legally binding contract is perhaps NOT the best way to go about business. You should seek professional help and be prepared to pay good money. Brian wondered what you trading status might be; do you know exactly what you are going to be?

 

Depending on said status, you may have to arrange payment for whatever items you buy and it may be the bank will also have some idea of the folk/company with whom you are hoping to do business with...such as their credit rating...

 

After all, the bank will have infinitely more experience of foreign business money transfers than you ever could. (If the deal mentions cash payment involving suitcases of small denomination US dollar bills at your local Holiday Inn then alarm bells should be ringing...)

 

Even if you are working for a commission you would hope to get paid...certainly before you retire...and you might want to consider what currency you get paid in...exchange rates do vary...

 

You have been careful to not mention exactly what sort of kit you might be "bringing" to the UK market. I appreciate you might have done this prior to your post, but, have you researched how "good" this Russian kit is ref the UK market. By this I mean is this kit going to be in competition with established brands, or is it some amazing, radically new invention that nobody has ever heard of?

 

Either way you will have your work cut out; you may remember, from earlier posts on the forum, ANYTHING new is treated with a healthy suspicion until proven.

 

As a matter of interest, did you approach the Russians or were you approached by a "business negotiator" at a trade fair or similar, ie do you REALLY know with whom you intend to be in business with?

[Ynot]

Hmmm...

 

In my typical blunt way I'm going to summarise the posts so far.

 

To succeed at any sort of business, let alone an import/resale business from a foreign supplier, you need AT MINIMUM several things:

 

Knowledge of the product(s) and the confirmed quality thereof;

Experience in trading in this country;

Contacts in the UK, including other distributors as well as potential clients/buyers;

A quality control system which will cover you for the inevitable returns for warranty repairs (you must, by law, I believe, give a minimum of 12 months warranty as a supplier on new kit sold in the UK - something I seriously doubt you'll enjoy from the Russian supplier!);

Money... LOTS of it to cover initial stock and demo models plus marketing/advertising, plus storage/transport costs, plus insurance, plus accountants fees, legal fees, bank fees, plus, plus, plus....)

Experience in the use of these products and the competitors' products, as well as repair skills, etc etc etc...

GOOD solicitors and accountants who can guide you through the minefields created by the points above...

And much MUCH more.

Possibly even partners, to help shoulder the load.

 

DMX Trainee... You, it appears are just 18 years old. Regardless of your marks at the end of last year, the sort of course you'll take at A-level is FAR from sufficient to mean you can just walk into an import/distribution business to be brutally honest. There are very few people of your age who could, would or should even consider this as a career path for SO many reasons.

 

Your experience of the world, life and the universe is severely limited by the boundaries of education and other factors.

 

Advice?

You'll not want this, but I'll give it anyway - unless you can say with extreme confidence that you've covered off all of my points and those more detailed posts by others with far more experience in these matters than I, give up on the idea of starting ANY business at this time. Go out, get yourself a job - ANY job that will pay your bills - and experence life more. Or go to university and learn more that way.