Guide to Buying Overseas

Prosper from international trade while avoiding the pitfalls

By Shara Karasic, Work.com Community Manager

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Before you cross an ocean to buy products, be aware of your options. First of all, using the Internet, you can research, and even buy, wholesale products internationally without leaving your home. The key is connecting with a supplier that you can trust and that can continually produce high-quality goods for you as your business grows.

Make sure that you have at least a basic understanding of the culture of the country, and ideally the language (or get a good interpreter), so you can more effectively negotiate. You can upset your supplier and not even be aware of it if you violate a cultural norm.

Here are the basic steps for buying overseas:

Do research to find the best country in which to buy your product.
Find trusted suppliers. Get references. Communicate in a culturally-appropriate manner.
Agree on payment terms in advance. Don't pay in full until product is delivered.
Get sample products first, and then after first batch is manufactured, check to make sure these items meet the quality and specifications of the initial samples before paying. Have ongoing quality control in place – this could require having a staff member in-country.
Anticipate the growth of your business. Make sure your suppliers can produce enough products over time to keep your business growing, and won't turn around and make your unique designs for other customers.
Find trusted shippers, freight forwarders, and customs brokers to make sure your products arrive safe and sound.

Action Steps
The best contacts and resources to help you get it done

Find a supplier

Go to trade shows and check Web marketplaces as first steps to finding your overseas vendor.

I recommend: Alibaba.com has suppliers who have been authenticated and verified by a third-party credit agency. Globalsources.com showcases international products, and in addition provides information on trade shows and sourcing reports specific to China. Fita.org has international trade leads, events, and links to international trade sites.

Check references

Research the reputation and reliability of your potential foreign partner.

I recommend: The U.S. Commercial Service can help you scope out potential partners through its consular offices. Or try the American Chambers of Commerce Abroad.

Set pricing and terms

There are many options besides paying cash in advance (not generally recommended). Find out about international payment terms before negotiating.

I recommend: Learn about international payment terms and benefits and risks to the buyer at the International Trade Data System, Foreign Trade Online, or Unz & Co.

Find and negotiate shipping services

Depending on where you live and what you will be exporting, the company with which you will be dealing can vary.

I recommend: You know the big names: UPS, FedEx and DHL but there are more choices. SimpleShip, Freightquote, and Freight Dynamics offer shipping quote services online, wile uShip matches shippers to carriers with space. Fairplay publishes has an extensive online shippers directory with address and phone contacts.

Prepare your shipment and documentation

From bills of lading to export declarations to certificates of origin, international shipment may require more paperwork than you're used to with domestic shipping.

I recommend: UPS, FedEx and DHL provide good guides to international shipping, including necessary shipping forms.

Be prepared for customs

Find out about U.S. import duties and taxes. Make things easier on yourself by getting help from an experienced customs broker.

I recommend: Get U.S import duty information from the Department of Commerce. The National Customs Brokers & Forwarders Association of America membership directory allows you to search by state for customs brokers.

Tips & Tactics
Helpful advice for making the most of this Guide

Understand what suppliers really mean. In some countries, it can be rude to say "no", so make sure your "yes" is really a yes (and be careful about asking yes/no questions).
Be aware that there may be local celebrations that could disrupt your production schedule, so find out about these beforehand.

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