Importing Goods & Services

Importing can give a business a unique niche at home, and can also be necessary to manufacturing products for export. Adeline Teoh looks at the crucial steps for setting up for import, and where you can find specific answers to particular questions.

Importing can be a rewarding way to sell to the Australian market, but many businesses make the mistake of being underprepared. Make sure you understand the costs and paperwork involved in the import business before you buy overseas.

Before you begin, make sure you know why you need the product, whether for direct resale or as a component of products that you manufacture. Most small businesses are interested in resale, so we will cover resale in more depth than importing materials for manufacture.

Understand the reasons why you need to import the product. It may be that the product is not available in Australia, or that it is significantly cheaper or of better quality coming from elsewhere. If the product is not available here, consider an opportunity to manufacture (or grow) it here.

The next step involves considerations you should have addressed in starting your business–namely, identifying demand and competitors. If the product is not available in Australia, consider whether it is because there is not enough demand for it or whether you will need to create demand.

If another company imports the same or similar products, find out whether there is sufficient demand for the product for you to compete successfully. Also, find out whether a competitor has exclusive rights to the product, preventing you from importing.

If you are the first importer to obtain this product, consider applying for a sole distributor agreement, which means that you have the exclusive right to import to an area (for example, your state) for a certain length of time, which may be ongoing. Most suppliers recognise that giving sole distribution rights to you limits their business, so the agreement usually makes you responsible for adequate promotion and sale of the product in your given district. You may also be responsible for repairs and warranties.

Be wary about entering into a sole distribution agreement that gives too much power to the supplier, and understand that while you may have a sole distribution agreement with that supplier there may be other suppliers that manufacture similar products for other importers.

Restrictions & Standards

In addition to trade restrictions, you may need to research other restrictions relating to the product, including its legality and any applicable Australian Standards (www.standards.org.au). Some standards are required by law—these usually relate to health and safety—while others are voluntary but recommended. You may need to have the product tested to attain certification, which will depend on the type of product you’re importing. A good place to start is the Joint Accreditation System of Australia and New Zealand, but you may need to find the specific regulatory body that oversees your product category.

The Australia Customs Service regulates all imports into Australia so you will need to check the status of the product with regard to labelling requirements, health-related issues, specific quotas, and whether fumigation or a quarantine period applies. You may also need to provide minimum specifications for the product so your customers know what they are buying. This is typically the case with food products, where you are obliged to list ingredients and their origin, but may also apply to other products, for example electrical goods that require a particular power supply.