Choosing a Customs Broker – What You Don’t Know Could Hurt You

Customs Brokers – What do they actually do?

The work of a customs broker can seem rather mysterious because when managed properly, the customs clearance process should be seamless and invisible to you.  In an ideal situation, customs clearance of your imported or exported goods should “just happen.”

The truth is, the cross-border clearance of goods that change hands from one party to another can be a complex undertaking that is fraught with potential risk, extended delays and excessive taxes or other unexpected costs.  

Customs brokers are responsible for managing the end-to-end process that starts with identifying goods that need to be shipped from one location and finishes with the successful delivery of those goods to a final destination.  Brokers handle the paperwork, taxes, shipping details and customs compliance requirements at every step in the process.

The Good, the Bad and the Ugly

You have endless choices available to you when it comes to selecting a customs broker. There are large variances among brokers in terms of cost, technical knowledge and overall competence.  Some brokers provide specialty expertise for certain industries or in transporting goods among specific countries.  Certain brokers have tightly managed internal controls and well established processes and procedures; others do not.

Perhaps crucially, some customs brokers actively seek to minimise customs clearance lead times but at the potential expense of full compliance.  Other brokers lack formal representation in the relevant locations and so rely on informal “arrangements” to get the job done. 

In the eyes of the authorities, you are responsible for the decisions made by the broker on your behalf, so it is essential that you can trust the customs broker you choose and that you share common objectives.

Customs Broker Checklist

When interviewing prospective customs brokers to facilitate your importing or exporting activities, be sure to cover the following points:

• Ask the broker what roadblocks are likely to be encountered with your particular customs clearance needs
• Ask how they handled a tricky situation in the past and what creative solutions they were able to implement.  For example, what steps do they take when a shipment is stuck at a border entry point behind a backlog of other shipments due to an extreme weather delay?
• Ensure they have 24/7 shipment tracking facility, not just online but on the phone with a real person
• Confirm that they will provide upfront and in writing a complete itemisation of the tariffs that you will be responsible for paying – in other words, total landed cost
• Ask for at least two references that you can personally ring to obtain a first-hand account of how the broker performed for other clients, ideally from your industry.  Then ring those clients.

The team at Mawson Global work with a variety of reputable, proven customs brokers every day and are here to help you with your broker selection process.  Please contact us if we can answer any questions for you.

Can you take the risk out of moving exchange rates?

The short answer is yes... at a cost!

If you are considering importing because of a few cents variation in the exchange rate make sure you have considered the full effect on your business model.  

Many people consider the most obvious risk.

You took advantage of a favourable exchange rate and bought a container of product at a great price in Asia.  However in the time between placing the order and making your payment to the supplier the exchange rate has moved again. Now when the product arrives at your warehouse it has cost you as much as product from your regular supplier.  And to make matters worse, the quality of the product you bought is sub standard!

There are finance tools you can use to avoid some of these problems but make sure you consider the other risks of buying because of exchange rate variation!

 The most common problem comes from the disruption it causes in your supply chain.  If you are not building a business based on the consistent quality of your products this may not be an issue for you.  However if quality is important switching between suppliers in various countries at short notice to gain a few dollars is usually not worth it.  You will create serious risks to your product quality.

There are two main reasons for this

1.       When a supplier knows you have only placed an order today because of a small change in the exchange rate and tomorrow you will be buying elsewhere their incentive to get the quality perfect is low.  Everyone wants to build long term business not fill a single order!

2.       The other risk is that as you see a variation in the exchange rate that makes a certain county cheaper you are under immediate time pressure to place and pay for an order before the currency moves again.  This does not give you the time you need to properly research your supply options.  Without this research the risk of choosing a poor quality or unprofessional supplier is much greater.

We would recommend only moving sourcing or production offshore if your research shows a significant advantage regardless of a 10 cent negative move in the exchange rate.

The best way to avoid this risk is to do your research before you consider the exchange rate.  Then once you have identified the suppliers you want to work with and there is a positive move in the exchange rate you can increase your orders to this supplier.  Many of our clients at Mawson Global use our own teams in Asia to complete this research for them so they can be confident the change of suppliers won’t negatively affect their business.

Once you have identified the suppliers that have this advantage you can look at the options to “fix” the exchange rate.  Your bank or financial institution will have tools available which allow you for a small cost to buy the currency you need to pay for your order at today’s exchange rate.  This is a great option if you are spending large amounts over a long period as you can get the items into your budget and know exactly how much you need to pay for them in several months time.

Is Global Sourcing Right for You?

Are you considering global sourcing for your business or your clients? Wondering what your first steps should be?

Mawson Global’s mission is to make international growth simple and attainable for all companies, regardless of their size or budget. Quite simply, we connect you with suppliers and partners across the globe, to help you increase profits, improve efficiency, and strengthen your overall business. No matter what products you need, we aim to find a reliable, more affordable overseas supplier for you.

Most Mawson Global clients save at least $100,000 on their first projects, and their savings are typically between 40 to 70% of domestic prices. At last count, Mawson Global clients have saved almost $20 million using our global sourcing services.

Our clients come from a wide variety of industries and companies, with varying sizes and revenues. But they do share some common characteristics:

• They buy products not manufactured in the domestic market.
• They spend more than $50,000 with any one supplier.
• They are planning to purchase plant and equipment worth more than $50,000.
• They are a company’s owner, CEO, COO, or CFO.
• They are prepared to spend $7,000 to save $75,000!

Mawson Global is confident that we can assess your potential cost savings without disrupting your supply chain. We are not broker-agents; our services are fee-based, and we work without taking a commission. Our research and advice are also completely independent and unbiased.

We have professional teams based in a number of countries to help businesses around the world safely minimise any risks inherent in global purchasing.

Want to know if Mawson Global sourcing is right for your company? Take our QuickLook Analysis. We’ll ask you to tell us five to 10 products that you now buy from an importer, and then we’ll work to find those items from a cheaper international supplier.

Now is the time to find out if global sourcing can help you grow your business. Contact Mawson Global today!

How to Reap Global Sourcing Benefits for Construction Companies

Issuing a tender can be a pretty tense process. Often, that’s stating it mildly...

You and your team sit down, painstakingly put together cost projections for materials, man-hours and the construction technicalities at hand. You arrive at the best price possible and you submit it to the client.

But, what happens meanwhile? Your competitors are doing the same. How much is their bid? Have they struck a great deal with a global supplier to source products significantly cheaper than you? Only time will tell. And usually a lot of nail biting, too.

In many ways, the construction industry is unique when it comes to budget considerations.

Sure, budget is paramount for any business. But, when you’re issuing a tender, getting your budget the right means the difference between having work to do and having nothing to work on at all.

Naturally then, the continuing trend in global sourcing is of particular interest to construction companies. Here’s how to get it right.

Stay on top of your schedule

When it comes to the different stages of a project, each can potentially be held up waiting for inexpensive and often very basic components that get stuck somewhere in the supply chain.

If you’re sourcing from somewhere in Asia, for example, it’s important to be especially diligent about the supply chain schedule. A 55% saving off the domestic price is an attractive reason to source any given widget globally.

But if they get held up and slow down the next stage of funding, your savings are nullified and major cash flow issues arise.

Seafreight is the most common form of shipping used in global sourcing and takes on average around 4 weeks. Airfreight can reduce that down to a few days, but is more expensive.

It’s worth making contact with an airfreight company to have a standby logistics account registered. Likewise, having backup component suppliers for emergencies is especially important when taking your supply chain global.

With these contingencies in place, you can reap the massive savings and ensure you’ve got your bases covered.

Quality assurance measures

Quality is a major concern for any business looking to outsource globally for the first time, and construction especially so. The idea of poor quality components jeopardising the safety of a project is beyond unacceptable.

Different regions and markets have different ideas of what constitutes “satisfactory quality” or “fit for purpose”. For that reason, paying a reasonable fee to an impartial third party inspector with a predetermined set of factors for what you consider acceptable quality is the ideal way to keep your project on track.

If everything’s checked by a reputable auditor, you get the peace of mind you need to focus on the project.

Be aware of cultural barriers

Finally, comes the inevitable cultural barriers.

It’s often quite incredible how different perspectives can be overseas. For that reason, being crystal clear and unambiguous in the language you use with your orders is tantamount for a successful project.

Classic examples which anyone who has travelled internationally will appreciate include:

• “Neutral” colour schemes are not the same in all countries
• "Normal" toilets and bathroom fittings are very different
• “Environmentally aware” buildings and building materials mean very different things in different countries

In addition to committing to a policy of crystal clear communications, it’s worth doing a little research, too. Head to Google and search for info dealing with different cultures in a business context such as this article on the Chinese holidays.

If you’d rather speak to someone in person, call one of our specialist outsourcers with a strong track record of saving money, and even stronger relationships built while sourcing globally for construction companies.

Mawson Global Client Finds Big Cost Savings with Global Sourcing

Organization: Food manufacturer

Looking to Source: Printed rewind

Results:

* Annual cost savings of more than $32,000.

* Rapid procurement of multiple sourcing options.

* Variety of pricing options from a select group of qualified suppliers.

The Objective

This client is a nationally-recognized processor, wholesaler and distributor of nuts, dried fruit, confectionary and snack products since 1996. In an effort to uncover cost savings on a specific product, the company contacted Mawson Global in hopes of identifying a reliable global sourcing partner to save on the cost of the material for printed rewind.

The Approach

Due to Mawson Global’s impressive track record in sourcing materials, the client engaged us to identify reliable global sources for printed rewind.

Our China-based staff researched a variety of suppliers – taking into account the client’s product specifications – and we were able to recommend reliable suppliers producing the material in multiple China provinces.

We utilized our proven rating system to identify the top suppliers by marking efficiency levels, reliability, and quality. Within a number of days, we presented the client with three different supplier options from different suppliers in China in our informative, easy-to-read Sourcing Report.

The Benefits

Annual Cost Savings

Substantial Savings: Because of  Mawson Global’s global sourcing expertise, the client selected a vendor that will help it experience an annual cost savings of more than $32,000 each year.

Outstanding ROI: Our fee-for-service model means the client pays for our service once, but experiences long-term benefits.

Flexible Alternatives

Future potential: After going through the sourcing process, the client now has the ability to quote more products and experience additional cost savings for years to come.

Comprehensive approach: Mawson Global not only conducted its QuickLook Analysis, but also applied its Research Project capability for the client.

High Efficiency: Mawson Global sourcing experts conducted a timely and robust search for suppliers that provided the required materials at a significant cost savings.

Skilled, professional staff: Our team members in Asia have been with Mawson Global an average of six years, and they have simplified the process of selecting trustworthy, reliable suppliers that meet our high standards for quality and customer service. This team, along with our proven supplier ratings system, is a key reason we’re able to quickly address our client’s request for global sourcing options for its printed rewind.

After-Hours Business Entertaining in Asia: To Karaoke, or Not to Karaoke?

When you’re traveling for business in Asia or any part of the world unfamiliar to you, it’s wise to be familiar with local customs regarding business entertaining.

You may be invited by suppliers, customers, and associates to meet after hours – in a more informal setting than daytime meetings. These interactions are equally important as daytime meeting in forging business relationships.

Hosts are usually appreciative of visitors who demonstrate knowledge about their culture, as well as the ability to converse in his or her language, so make an effort to do both. The following is a quick guide to navigating after-hours business functions.

Dining
In Asian countries, seating is very important at a formal meal, and guests should wait to be seated by the host to avoid being disrespectful. It’s also polite to try everything served during a meal. Take a bite of each dish – even if it seems unappealing – and be sure to give your compliments to the host.  If you enjoy the meal, eat up -- a clean plate is a good thing in Asian countries! However, be aware that your host may insist that you keep eating, even if you are full.

Karaoke
Karaoke bars are a common form of entertainment in Asian countries. If your host suggests visiting one and you agree, be ready to participate! Agreeing to go to a karaoke bar means you are willing to sing!  Men often receive unsolicited attention from women in these establishments. Be aware that most of it comes at a price to you or your host. Remember, you are there on business; have fun, but conduct yourself in a professional manner.

Drinking
Alcohol is an important part of building business relationships. If you don’t drink, politely inform your host in advance. Toasts are a big part of Asia’s culture, so if they are offered, it’s polite to take part. You may also ask your host if you can offer a toast to them and the success of your relationship.

Navigating Business After-Hours
If you’re working on forging business relationships in China or other Asian nations, Mawson Global can help with every aspect of the endeavor -- from efficiently arranging flights, hotels, and other transportation to advising you on the proper way to deal with businesspeople.

Mawson Global has representatives on site who are familiar with local businesses and industries. We can help you and your company forge new overseas relationships – and even suggest a karaoke song or two!

Sourcing From China on the Rise

As global economic indicators have shown incremental improvement over the past several months, it could also point to a positive position for Chinese manufacturers and service providers. According to the most recent International Sourcing Confidence Index, confidence from multinational companies that source products from China increased in the third quarter, up from 50.40 to 51.28, according to the Shanghai International Sourcing Promotion Group Co.

The Index is a measure of the confidence that multinational companies feel with regards to sourcing products in China. The survey interviewed more than 200 multinational companies that have a presence in China. A reading above 50 indicates optimism, and the third-quarter index represents the highest mark in a number of quarters. The index’s improvement also indicates that the global market might be inclined to source more products from China.

According to the most recent trade information, exports from China grew to 7.2% in August, up from 5.1% in July.

With four experienced individuals staffing our office in Qingdao, China, Mawson Global is strategically positioned to help companies and organizations of all sizes and disciplines to identify and acquire the most cost-effective suppliers of products and services in the Chinese market.

Because we have a team on the ground in China, we’re able to minimise the risks associated with global sourcing and help your company make the most out of global sourcing its products. Our team members are knowledgeable about international standards, and understand local languages and cultures. Having a team in China also means that Mawson Global can quickly identify suppliers that meet your quality standards, and provide you with a partner with whom you can cultivate a long-term relationship.

There are a number of reasons to partner with Mawson Global for your global sourcing needs, including:

• We are a global leader in product sourcing with more than 70 years of family experience.

• Small and medium enterprises get Fortune 500 sourcing expertise for a fraction of the cost.

• Mawson Global identifies high-quality suppliers that you can build a long-term relationship with.

• These relationships enable your company or organization to become a key player in the global market.

• Sourcing through Mawson Global will keep you ahead of your competition.

• Partnering with Mawson Global helps your company slash costs and increase your profit.

For more information on how Mawson Global can help you join the global arena, please take our 10 Product Challenge or contact us.

Is Global Sourcing is Right for You? Questions to Ask Yourself

You’ve heard the stories.

There’s a company based in China that produces exactly the widgets you need, just the way you need them for about 35% of the cost you currently pay.

Surely, there must be a catch?

Well, sourcing globally does require a little extra due diligence. A few more skills must be learned and your supply chain must be tweaked to accommodate your new overseas suppliers. Sounds pretty reasonable.

But then, is it right for your business? Here are some questions to ask yourself before you make the decision.

What strategies can you use to maintain quality?

Your primary consideration should focus on the issue of quality. Countries such as China are notorious for building so-called “quality fade” into products. It’s a process whereby manufacturing materials are replaced with cheaper alternatives to reduce costs and improve profit. And that means improve their profit; not yours.

The secret weapon in the supply chain manager’s global sourcing arsenal is the third party auditor. You can hire an impartial inspector for a reasonable fee to ensure quality control overseas.

Action step: Whatever type of product you’re considering outsourcing, ensure it’s possible to put third-party and impartial quality control in place prior to making the move.

In what ways will global sourcing affect your business?

Alright so, you’re going to save money. But, there are other considerations here and proper research is necessary.

For example, let’s say the widget you want to purchase at 35% the domestic cost is only available in one overseas country. Let’s also say that the country is susceptible to natural disasters.

What alternatives do you have before you drop your current contract? If there are no backup plans to source this equipment, then an earthquake or typhoon could cause you major problems.

Action step: Plan out the changes to your supply chain, ensure you have contingencies in place. If you find there aren’t any, you may think twice about that 65% saving on a mission-critical component.

Do you need to be nimble, or first to market?

Typically, companies opt for seafreight when sourcing globally because it’s significantly cheaper than airfreight. However, typical shipping times are around four weeks.

Let’s say you work in a fast-paced business where the prototyping phase must be completed, production started and the finished items on the market as soon as possible. If that’s true, the distances associated with global sourcing may rule it out for your company.

Action step: Ask yourself if you need to be first to market. If you do, properly calculate airfreight times and charges to double check the feasibility of global sourcing using this more expensive logistics service.

Do you have the right people, expertise & support to implement it?

If you’re reading this, you probably already know that sourcing globally can save between 40% and 70% on domestic prices. Naturally, a few new strategies and a little extra planning is required to unlock all that equity.

So finally, before you take on a global sourcing strategy, take time to consider if you have the right people for the job. If not, can you afford to hire a full-time staff member or consultant? Or do you have time to learn about international business cultures, international logistics and the critical legislation such as importation tariffs?

The crucial thing is, before you jump on board, it’s necessary to you educate yourself. At least you must find the right people for the job. Then you know for sure that, no matter what happens, your supply chain is both agile and reliable.

If you want to know more about sourcing globally would like a QuickLook Analysis, call the Mawson Global team today.

Overcoming Language Barriers with Global Sourcing Partners

Globally sourcing your company's products can improve your productivity, efficiency and bottom line, but sometimes language barriers can get in the way. From simple miscommunications to cultural gaffes, language barriers can cause international business relationships to grind to a halt.

It’s important to have a strategy in place to mitigate language issues before they cause serious problems. So, here’s a closer look at strategies that can help overcome language barriers with your global sourcing partners:

1.       Translate all critical documents into the local language. Before embarking on a business partnership, it’s important to consider the basic documents that will outline and guide the relationship. Examples of critical documents include legal contracts, sourcing guidelines, company and background information, and operating agreements. Translate these documents into the local language to ensure that both members of a partnership get off to a good start. It gives everyone involved a clear frame of reference. Any point of confusion or disagreement can refer back to these original core documents.

2.       Utilize multiple channels for communication. One of the most effective strategies for overcoming language barriers is creating redundant systems. Don’t rely on a single source of communication to handle important conversations. Follow up conference calls or Skype discussions with summary emails that outline the major takeaways. Email exchanges are easier to track than phone and in-person meetings, but written communications also should be supplemented with other points of contact. Even simply hearing a colleague’s voice helps to build strong relationships.  

3.       Partner with sourcing firms that have language capabilities: When you’re selecting your global sourcing partner, choose a firm that has language and translation capabilities. The right partner will be able to navigate your sourcing market with conversational fluency, but also be able to translate written documents as part of the process. The best firms offer this support to clients as part of the ongoing relationship, and can provide premium support at a reasonable price when special translation needs arise.

If you’re contemplating launching a global sourcing initiative, Mawson Global can help.Contact us to discuss your business, your sourcing goals and how our services can make it easier to navigate the process today.

How Importing can Increase Productivity

Productivity.  It’s essential to success. It can be elusive. And it’s the driving force behind businesses -- literally. Without it, the world would crumble and nothing would ever get done. Without it your company wouldn’t exist.

Productivity is vital to all businesses, but it’s especially important to those in global commerce. To be successful, manufacturers need to bring products to market quickly, ensure on-time delivery, provide outstanding customer service, and maintain their market share. A high level of productivity is required to accomplish all these initiatives.  

There are a lot of methods for increasing manufacturing productivity – from restructuring the workforce to reworking procedures. However, one of the best ways to up the output is by importing manufacturing machinery.

Importing machinery can make a plant more efficient at a fraction of the cost of local machine brokers. It can also be accomplished a lot faster than other methods and with minimal disruption, especially when importing fully complete sub-assemblies.

By looking to equipment suppliers in other areas of the world, manufacturers can often find a larger selection of machines, lower prices, and better customer services. However, locating qualified international suppliers can be a challenge, especially for those with limited resources to devote to the search. These limitations don’t have to prevent you from importing your equipment, though.

Mawson Global, a leader in global sourcing, has a proven method for helping manufacturers import machinery and components. Need a supplier of sanding equipment or corrugated cardboard box maker? Mawson Global can perform a comprehensive search and provide you with supplier recommendations that meet a company’s exact requirements.

With Mawson Global, the risks commonly associated with global sourcing are minimal because we have teams located around the globe. This “boots on the ground” approach means we’re familiar with the international standards, language, and culture of each of the countries we source from.

If your manufacturing company is searching for a way to boost its productivity without having to decrease it first, Mawson Global can help. Let us handle the search for your machinery supplier. With our assistance, your business can not only improve its output, but also slash costs and increase its profit.