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Training on importing goods

In this article, we try to explain the import process in simple language. Exchanges, trade and commerce between different countries and nations are several thousand years old. Humanity has long sought to meet its many needs from all over the world. The import and export of goods between different countries and international trade in general are studied at the macro level based on theories from Adam Smith’s absolute advantage to Porter’s national diamond. But at the micro level, the international trade process is usually investigated and studied at the level of a company.

Procedures for importing goods

Selection of goods for import:

Companies conduct extensive internal and external studies to select goods (part of the market research process) and select the goods they want to import based on several factors. Choosing and entering a new market is often the concern of newbies. Choosing a product for import means entering an industry that has many complications. Usually, people and companies study and review several indicators for product selection, which are classified into several main factor categories. These main factors, each of which has several subgroups, are:

Factors related to the buyer company such as: purchasing power, financial power, …
Factors related to the competitive environment, attractiveness of the market, barriers to entering the market
Factors related to laws and regulations, for example: required licenses, relevant laws, etc.
Influential factors in choosing a supplier such as: reputation and position of the supplier, production ability, …

Which we have mentioned at the end of this section.

Newbies and people interested in importing goods are advised to think about their sales ability before taking any action so that they can plan accordingly. In the first step, a beginner businessman should consider what kind of connections and sales power he has or can have. Knowing the distribution channels and key people in the market is very important and is one of the most important competitive advantages of any person in importing goods. The best way to start is to check the phone numbers in your mobile phone or check your business card album.

Correspondence and negotiation for importing goods :

The importer of the goods or the buyer usually starts collecting information from different sources and sourcing after choosing the goods. On the other hand, the exporter or seller also tries to reach international customers in his efforts to market and sell the product. The most important means of marketing and communication between international buyers and sellers are correspondence and business negotiations. These two tools, contrary to the simplistic views that we sometimes encounter, are completely specialized and professional methods and it is better to be done by experienced experts in each collection.

Correspondence and negotiation for importing goods is actually a form of communication. In communication, a sender encodes his subjective message (with three codes of words, tone of voice and body language) and sends it to the other party (receiver) and he decodes the message and perception takes place. In order to be successful in international correspondence and negotiations, a person must have sufficient knowledge and expertise in specialized language and operational concepts of international trade, while mastering the common language.

How to validate the goods seller in international trade ?

If you are new to the business or if you don’t know enough about the seller, be sure to validate the seller using the following methods before making a deposit

A: Validation of the seller before sending the payment, which has many solutions :

Search in the web space
Request a work profile from the seller
Use of information resources and assistance of business advisors in different countries, you can get information about business advisors of the Islamic Republic of Iran in different countries from the website tpo.ir.
Using the services of embassies and information centers of different countries in Iran
Using the government information sites of the seller countries, including the site of the trade development organization of the countries, by searching for the following phrase in search engines, trade promotion center of… along with mentioning the name of the target country
Use of Iranian cargo companies based in the country of origin of shipment
Technical visit
Compilation of a professional contract
Request appropriate and approved documents from the seller
Application for advance payment bank guarantee
Inspection of goods

Inquiring about the price of the product and requesting the technical and practical specifications of the product
Receive a sample or sample of the product
Summing up and making the final decision to purchase goods
Issuance of proforma invoice

After the correspondence and negotiation between the buyer and the seller and the finalization of the terms of the transaction, the seller will issue a preliminary invoice. The proforma invoice is the first document that is issued in an international transaction and contains the transaction conditions. This document is used in the next steps, including obtaining order registration permission, opening of letter of credit and goods clearance.

At the time of finalizing this document, the importer must analyze the entire import process and plan the next steps after financial analysis, time and permits.

Determining the tariff of goods or HS code and obtaining information about customs laws and clearance of that goods
Forecasting the cost of clearing the goods from the customs of the country and determining the final price of the goods at the buyer’s place
Obtaining licenses for importing goods

According to Article 8 of the country’s export and import law, after issuing a proforma invoice from the seller and sending it to the buyer, the buyer is required to apply for an entry permit or order registration permit. The order registration license is actually a license from the Ministry of Industry, Mining and Trade for the entry of goods, which is necessary and essential for the continuation of the process. Sometimes the importers obtain an import permit at the end of the process, i.e. after the shipment and before the clearance of the goods, and this model carries risks, because it is possible that the conditions for entering the goods have changed over time or that the entry of the goods was prohibited from the beginning and the trader was not aware of this.

After the final issuance of the proforma invoice, at the beginning it is better to check and study the conditions for entering the goods and the necessary permits to the country of origin so that you do not face unexpected conditions. You can also find out about the status of your selected goods by visiting the import offices or asking the executive customs. The Iran Customs Import Office is the best reference for determining the permitted, conditional or prohibited goods. The customs will finally check what licenses the goods in question are subject to, and the owner of the goods or the importer is required to obtain all the licenses and submit them to the customs before clearance.

Registering the order of goods in the country's comprehensive trade system and providing foreign exchange for its import and providing other facilities

Registering the order of goods in the country’s comprehensive trade system and providing foreign exchange for its import and providing other facilities

Choosing payment methods and international financial agreements for importing goods

After receiving the import or export licenses by the trader, it is time to transfer the money and goods. In fact, 4 items are exchanged between the seller and the buyer in every international exchange. At the beginning, information is transferred between the parties. The buyer specifies his needs and the seller expresses his desired conditions and items. After the transfer of information, 3 other items including: goods, shipping documents and money are transferred.

Obviously, information is transferred first, but whether goods or money are transferred after the exchange of information depends on the payment method chosen by the parties. The buyer and the seller have four important ways to transfer money, which are:

Advance payment
Trading on the basis of an open account
For you
Documentary credit

Inspecting the goods before shipping

Technical product inspection services include:

Pre-Shipment Inspection (PSI)
Technical inspection of equipment in the construction process
Approval of the product standard
Shipping supervision
Price Verification
Evaluation of product suppliers and equipment manufacturers
Consulting for quality control of raw materials and general items

One of the most important concerns of sellers and especially buyers while conducting domestic and international transactions and buying goods is lack of confidence in the other party and doubt in fulfilling the obligations assumed by the other party. In this regard, one of the services that can be considered and with the help of which the responsibilities of the seller can be examined and controlled before transporting the goods and receiving money, is the use of the services of inspection companies that perform quantitative and qualitative monitoring by applying supervision. The purchased goods will reduce the future disputes between the buyer and the seller.

In fact, in order to prevent and solve problems, it has been tried for a long time to reduce the causes of differences between the buyer and the seller to the minimum possible by using special mechanisms. And in this regard, the issue of inspecting the goods at the origin and before shipping, in order to reduce or resolve the differences between the customers, has been raised.

By performing pre-shipment inspection services, the buyer can, with the necessary forecasts and the selection of a reliable and trustworthy inspection company, provide conditions so that, firstly, no problems arise, and secondly, in the event of a problem, to have documents and sufficient evidence of the condition of the goods before shipment.

Today, commodity inspection companies are one of the important components of global trade, whose existence is used to control the quantity, quality, and packaging of goods and prevent the entry and export of substandard goods.

Agreement and choice of insurance and method of transporting goods

The export of goods plays an important role in the economic development of countries, and the method of transportation and the prediction of possible risks are important for the parties. The international insurance contract is one of the tools for compensation in the event of accidents.

Today, insurance plays an important and undeniable role in people’s lives. Due to the high volume of exchanges and the expansion of cross-border activities, all governments and business owners pay special attention to insurance, and the level of legal information of individuals in this area is increasing.

In addition to reducing damage and compensation, this positive trend increases profits and increases security in commercial activities, and insurance is used internationally to compensate risks caused by commercial science among countries.

Customs affairs and clearance of goods

Clearance of goods is a process that is carried out by the owner of the goods or his legal representative at the customs for the export or import of goods, and after going through the relevant formalities, the permission to leave the goods is issued from the customs premises. In fact, the term goods clearance is used when the goods declared to the customs are released for the importer or exporter. The process of clearance of imported goods consists of several different stages including preparation of documents and registration of information, authentication and declaration of goods, customs controls, payment of clearance and licensing fees, loading of goods stored in customs and its departure, and finally controls after the departure of goods. It is that all the mentioned steps should be done carefully and in order.

Conclusion

In this article, we discussed the preliminary steps of importing goods, from the beginning of the journey, i.e., correspondence and negotiations, receipt of the proforma invoice, and then obtaining the necessary permits, to the customs clearance steps. In the following articles, the purpose of teaching the process of import and export of goods will be discussed in a completely specialized manner

Export requirements Incoterms 2020 training

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Share on :

Training on importing goods

Procedures for importing goods

Correspondence and negotiation for importing goods :

How to validate the goods seller in international trade ?

A: Validation of the seller before sending the payment, which has many solutions :

Registering the order of goods in the country's comprehensive trade system and providing foreign exchange for its import and providing other facilities

Choosing payment methods and international financial agreements for importing goods

Inspecting the goods before shipping

Agreement and choice of insurance and method of transporting goods

Customs affairs and clearance of goods

Conclusion

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