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September 15, 2020 at 6:03 am #1000373
Hi Guys, I have a unique product that I am importing from China, and looking for tips on reducing costs to get it here in Australia.
Currently I am working on a gross cost of $260 approx. for the item.
Shipping costs are around 35% of that which is absolutely killing me. Also GST is taken twice, once at the boarder, then once I sell, so another 20%. The ludicrous fees just to convert currency can be as high as 6%. Before I even get it here I’m looking at 70% in just shipping and handling fees.
I thought for a unique product a 100% markup would be oodles, but apparently not.
Transferwise helps with bank fees. But everything else is still pretty high.
Any tips to get this price down?
JoshSeptember 15, 2020 at 7:33 am #1224106Rowan@quaoticParticipant
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If you are not registered for GST then do that to claim back the GST you pay both on the product, and on the shipping. It all helps.September 15, 2020 at 7:44 am #1224107Paul – FS ConciergeKeymaster
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Hi And Welcome to Flying Solo Josh.
It is great to have you!
Thank you for joining our community and posting.
CheersSeptember 15, 2020 at 7:49 am #1224108Jason RamageParticipant
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Not an accountant here, although curious on the comment about paying GST twice? Think i am missing the thought bubble here?Jason Ramage | Lucas Arthur Pty Ltd | E: firstname.lastname@example.org P: 61 3 8324 0344 M: 61 412 244 888September 15, 2020 at 8:43 am #1224109
Im not an accountant either, is it true you need to pay GST when you sell something? I am not registered for GST yet but will be soon.September 15, 2020 at 9:49 am #1224110Rowan@quaoticParticipant
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If you are not registered for GST then you cannot charge your customer GST.
If you are registered then you charge your customer GST and remit it to the government in your BAS, but you claim the GST you paid when you bought the product so it partly cancels out.September 15, 2020 at 10:13 pm #1224111bb1Participant
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The first thing you should do is go and see an accountant, and let them fill you in on GST. May sound counter intuitive, but it sounds like a basic understanding of business may help you.
You only pay GST when you buy something. You don’t pay when you sell.September 15, 2020 at 11:19 pm #1224112
This is a great example of the hidden cost of failing to get professional advice. It would appear the GST is being miscalculated which is throwing feasibility calcs out by at least 10%. That amount could make all the difference in your decision. Thankfully in this case you may have overstated the cost (and perhaps decided not to proceed). Its considerably worse when you tell someone that has invested big money and started a new business that they have underestimated the costs by 10%.Helping build better businesses and better lives with expert financial and taxation advice. email@example.com www.360partners.com.au 03 9005 4900September 17, 2020 at 6:46 am #1224113
Any tips on importing or shipping?September 17, 2020 at 6:49 am #1224114Fatmungus, post: 270914, member: 119018 wrote:Thanks guys.
Any tips on importing or shipping?
Yes speak with a logistics business as they are experts.Helping build better businesses and better lives with expert financial and taxation advice. firstname.lastname@example.org www.360partners.com.au 03 9005 4900September 17, 2020 at 7:40 am #1224115
yep done thatSeptember 17, 2020 at 7:42 am #1224116
The ship gets $111 out of a total of $900AUD door to door (ex Shenzhen).
I’m thinking you can get prices down if you do Port to Port and order a Pallet.September 17, 2020 at 10:01 pm #1224117
Are there not professionals that do this every day that you can pay to get the optimal solution?Helping build better businesses and better lives with expert financial and taxation advice. email@example.com www.360partners.com.au 03 9005 4900September 18, 2020 at 12:55 am #1224118Dash FreightParticipant
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Hi Fatmungus, I always recommend with new import clients that they look at registering for GST. As an importer it would seem an obvious advantage to claim the import GST back on your BAS, so it is not then a part of your landed cost. Freight costs are changing a bit this year, due to COVID 19. If you are a small enterprise, and only shipping small amounts your unit costs may be higher than you would like. Can you import one pallet or more? If you can, then sea freight will save you money. Are you buying FOB? If your incoterms are DAP then the odds are you are paying too much. Can you take advantage of CHAFTA? CHAFTA and GST alone may save you 15%, depending on your product. My recommendations (on the freight costs): 1. buy as much as you can handle, to reduce unit costs. 2. Best incoterms are FOB or EXW. 3. Get the shipper to provide the COO. This normally costs USD60.
Good luckSeptember 18, 2020 at 1:01 am #1224119bb1Participant
robdash, post: 270928, member: 117305 wrote:I always recommend with new import clients that they look at registering for GST. As an importer it would seem an obvious advantage to claim the import GST back on your BAS, so it is not then a part of your landed cost.
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And a better recommendation would be to talk to your accountant based on your specific financial situation, and business setup.
Seek shipping advise from a logistics business, and seek financial advise from an accountant.
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