Over the past year, shipping costs have skyrocketed as inflation and high fuel prices around the world have put a strain on the transport industry. These escalated overheads quickly flowed to small businesses, who, with more limited access to resources, budget and manpower, have felt the pinch harder than most large corporations.
Imports are highly regulated, so it may seem at first as if there’s little wriggle room when it comes to lessening costs. As Natural Shoots Co launched international eco-friendly baby brand Kit & Kin into the Australian market in 2022, we focused on an economical approach and, along the way, have discovered four tips worth sharing that might help small businesses importing goods from overseas save some money.
Tip 1: License and produce onshore
The ultimate way to save money on imports is by not importing at all. Depending on the type of goods you sell, it could be highly beneficial to license the patents then find a local producer who can create the same product for you. If you already own patents and technology, this process is even easier – simply find a local manufacturer and start creating.
Licensing works in a variety of ways. You can choose to license the patents and technology to manufacture a product, but you can also choose to license the brand behind the product. This allows you to leverage an international brand name and product recognition, while also appealing to a customer base that increasingly wants to support Australian businesses by purchasing products made locally.
Tip 2: Meet with a customs broker
While this will involve an initial financial outlay, working with a customs broker who has a strong understanding of the business can help you identify the best freight company for your needs, make you aware of any available tax subsidies, and plan so you don’t incur any fines or unexpected fees. By ensuring your import process has been set up properly, you’ll likely save a lot of money in the long run.
Tip 3: Team up with partners to divide costs
If you are importing a small quantity of stock, contact other businesses in your network to see if anyone else is shipping product from the same place. Partnering with other companies to ship your combined larger quantities of products together will reduce your overall costs. However, this process can become complicated – you need to ensure you are dividing each business’s responsibilities clearly, so no tasks slip through the cracks.
Tip 4: Buy in large quantities
Unfortunately for small businesses, the bottom line is it’s far more cost-effective to ship in large quantities. This means business owners should be discerning and only import products from overseas when it makes financial sense to do so. Some solutions to consider include weighing up the cost of importing larger amounts of product then storing them on-shore, stocking limited product ranges in higher quantities, or investigating the possibility of white-labelling a portion of your stock. It could be that one of these ideas makes more financial sense for your company than importing smaller quantities of a product.
