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Six steps to help grow your import business

Take the right steps early in the importing process, and you could set your business on the path to international success.

5 minute read

Six steps to grow your import business

Starting an import business is an exciting prospect, but it’s no mean feat. These are six steps to help in the early stages of branching out into the world of importing. They might even help your business make the most of the opportunity to expand overseas.

1. Be prepared

These days overseas ordering is as simple as clicking a button. Which means it’s easy to underestimate the risks of importing. But whether your orders are large or small, growing your business by importing takes a significant amount of planning and thought. Before you begin, take a moment to prepare yourself for the complexities of the task ahead.

2. Research compliance

New Zealand has some strict importing rules in place to protect our economy, environment, and wellbeing. Before you dive head-first into importing, be clear on whether the product you have in mind will be allowed into the country.

Depending on the product you’re looking to import, you may need written consent from the New Zealand Customs Service, the Ministry for Primary Industries, the Ministry of Health, or even the New Zealand Transport Agency.

Visit the New Zealand Customs Service website for more information on prohibited and restricted items.

3. Explore demand for your product

Importing is an investment. And like any investment, you want to make sure it pays off. Do this by researching your market and determine the demand for your product.

Survey potential customers to uncover the wants and needs your product could cater to. Test the product’s usability and note what it could offer to specific industries and target markets. If there’s a risk of competitors, consider finding niche markets that others are currently ignoring.

Once you have a particular target market in mind, use a trusted resource like Stats NZ to learn more about their potential for growth.

4. Look into costs and pricing

Estimate your costs and pricing, then use your estimates of demand to calculate your break-even point. You can use this insight to inform how many units you need to import, and how much you need to sell before seeing a profit.

Costs
Unexpected importing costs can be huge, and so can the consequences of miscalculations. That’s why it’s crucial to nut out every aspect of your costs before you take your first steps.
Below are a few examples of potential costs:

  • shipping
  • insurance
  • finance
  • storage facilities
  • brokerage costs
  • significant changes in the value of the NZD
  • customs duties and taxes.

Pricing

Your imported product’s price should be informed by:

  • your target market’s price tolerance (i.e. the maximum they’re willing to pay)
  • what your competitors are charging
  • the level of demand
  • whether your contract gives you importing exclusivity (if you’re New Zealand’s only importer of a particular product, you could charge a premium)
  • your product and/or business’s positioning in the marketplace (for example if you rely too heavily on discounts, your product might be seen as low-quality).

5. Consider the risks

Importing comes with considerable risks, including:

  • unreliable suppliers
  • lost or incorrect deliveries
  • too much capital tied up in financing and orders
  • changes in exchange rates affecting margins
  • trade disagreements leading to products being banned
  • foreign or local import tax raises
  • economic turmoil in the manufacturer’s country leading to rising costs or production hold-ups. 

Sort your risks into two lists – one in order from most to least likely, and one in order from most to least significant. Then look into ways to reduce your business’ exposure, for example:

  • drawing up contracts to protect your business
  • using BNZ’s FX Online to keep track of foreign exchange rates
  • consulting with an importing advisor to identify potential risks and solutions.

6. Research your suppliers

If your numbers, risks, and research all stack up, it’s finally time to explore suppliers. It’s best to visit overseas suppliers in person to help reduce the risk of mistakes and misunderstandings. This takes time and money, but clearing up issues now will likely save you significant costs and headaches further down the track.

When assessing potential suppliers it’s important to:

  • request references and contact details from past customers so you can get in touch directly
  • perform in-depth credit checks
  • take note of any cultural differences so you can avoid any accidental slip-ups
  • meet the supplier in person - and if that’s not doable see samples before placing any orders.

Importing can open up a whole new world of opportunities for your business. But like any big reward, it’s not without risks. It’s important to seek expert advice as early in the journey as possible - whether from the Chamber of Commerce, industry associations, experienced importers, or BNZ’s own international trade experts.

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This material is for general information purposes only and does not constitute, and is not intended as, personalised financial advice or as a replacement for legal advice. BNZ strongly recommends you seek advice specific to your personal financial or legal situation from a qualified adviser. Neither BNZ nor any person involved in the material accepts any liability for any direct or indirect loss or damage arising out of the use of, or reliance on, all or any part of the content.