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  • #982658
    Dhow_Aust
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    Hi all,

    Sorry if something similar has been posted before, however I was not able to find something quite useful from my previous search.

    I am trying to start up a importing business/company. I have secured myself a Korean garment/household/beauty/health products manufacturer who is willing to make me the sole distributor for their products in Australia. As I have no previous experience in the importing business, they would like me to do a thorough research and keep them updated with my progress.

    So I would like to find a mentor/teacher/guide who is willing to help me out with my queries about the importing business.

    From my initial research, my understanding of the procedure of starting up a importing business/company is as such:

    1. Get an ABN or ACN (I think as the manufacturer would like some share of the company, I would need an ACN instead of an ABN, could anyone clarify this?)

    2. There is no special import license for general goods but I should contact freight forwarder or the customs to make sure anyway (standards, quarantine, etc).

    3. If the combined cost of the items is under AUD$1000, the entry cost would be waived. If this is true, I’m actually not quite clear how the duties and tax will apply. Would the duties only apply if the total shipment is AUD$1000 and above?

    4. I should have a freight forwarder who would take care most of the customs process when my items arrive and get them to my doorstep/warehouse. Does anyone has a freight forwarder that they would recommend from their own experiences?

    Are my understandings of the importing process quite correct or have I missed any important details along the way?

    Once again, thank you so much for being so willing to help out a new starter. I do hope these questions might help other people who are facing the same questions.

    Kind regards,

    Kevin

    #1138006
    MyGreatIdea
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    Dhow_Aust, post: 157464 wrote:
    4. I should have a freight forwarder who would take care most of the customs process when my items arrive and get them to my doorstep/warehouse. Does anyone has a freight forwarder that they would recommend from their own experiences?

    This one I can help you with – Cat from Global Logistics Consulting.

    Outstanding service, great price and communicates above and beyond !!

    Wendy :)

    #1138007
    alliedib
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    Kevin,

    Make sure that your insurance notes you as a manufacturer (as you are deemed because you are importing) and not purely as a wholesaler.

    I thoroughly recommend transit cover and it needs to be taken in two sections – Import (from overseas to your warehouse) and Local (from your warehouse to your distribution locations).

    Good Luck.

    Regards,

    Mark

    #1138008
    JacquiPryor
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    1. Get an ABN or ACN (I think as the manufacturer would like some share of the company, I would need an ACN instead of an ABN, could anyone clarify this?)

    You might need both.

    If you set up as a sole trader for example, then you (personally) would obtain the ABN – it would be in your name, as you will be considered the legal entity. You would also then need to register a business name if you are planning to call your business something other than your own name.

    An ACN is an Australian Company Number… this is automatically allocated to you upon registration of a company – such as a Pty Ltd company. So, if the manufacturer is also going to be a share holder this would probably be more appropriate than acting as a sole trader. However, for your Pty Ltd company (associated to the ACN) to actively trade the business, it will also need to obtain an ABN.

    Business names and Companies are all registered through http://www.asic.gov.au these days. But, I would encourage you to seek further advice to ensure the right structure is set up for your new business, and ensure you understand any implications of the manufacturer holding shares in your company etc.

    have secured myself a Korean garment/household/beauty/health products manufacturer who is willing to make me the sole distributor for their products in Australia.

    If they are going to supply you with branded products, I would also make sure that their brand is registered as a trademark in Australia – or, at the very least the brand name is not going to infringe the existing rights of any Australian trademark holder. It would be horrible to find out after investing time and money into importing their branded products that you can’t actually promote the brand because it belongs to someone else already in Australia!

    #1138009
    Anonymous
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    Hi Kevin, and welcome to Flying Solo,

    That sounds like a great opportunity for you, and I wish you all the best with it.

    Dhow_Aust, post: 157464 wrote:
    I have secured myself a Korean garment/household/beauty/health products manufacturer who is willing to make me the sole distributor for their products in Australia.

    Dhow_Aust, post: 157464 wrote:
    2. There is no special import license for general goods but I should contact freight forwarder or the customs to make sure anyway (standards, quarantine, etc).

    Depending on the type of health and beauty products you’re talking about, you’ll need to undergo a fairly rigorous regulatory review process to ensure they’re appropriate for sale in Australia. If you’re talking about vitamin or herbal supplements, this could be fairly extensive and expensive, and will likely require hiring specialist consultants and relabelling (and sometimes reformulating) the products to meet Australian requirements. (Relevant government websites for you to look at to start to get an understanding of the regulations involved are the Therapeutic Goods Administration and NICNAS).

    Good luck with it all,
    Jayne

    #1138010
    Dhow_Aust
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    • Total posts: 5
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    Couple It, post: 157473 wrote:
    This one I can help you with – Cat from Global Logistics Consulting.

    Outstanding service, great price and communicates above and beyond !!

    Wendy :)

    Thanks Wendy, I will get in touch with them and see what they can offer me =)

    alliedib, post: 157480 wrote:
    Kevin,

    Make sure that your insurance notes you as a manufacturer (as you are deemed because you are importing) and not purely as a wholesaler.

    I thoroughly recommend transit cover and it needs to be taken in two sections – Import (from overseas to your warehouse) and Local (from your warehouse to your distribution locations).

    Good Luck.

    Regards,

    Mark

    Thanks Mark, I totally left out the insurance. I assume that you should be the guy that I’ll be after for insurance?

    JacquiPryor, post: 157507 wrote:
    1. Get an ABN or ACN (I think as the manufacturer would like some share of the company, I would need an ACN instead of an ABN, could anyone clarify this?)

    You might need both.

    If you set up as a sole trader for example, then you (personally) would obtain the ABN – it would be in your name, as you will be considered the legal entity. You would also then need to register a business name if you are planning to call your business something other than your own name.

    An ACN is an Australian Company Number… this is automatically allocated to you upon registration of a company – such as a Pty Ltd company. So, if the manufacturer is also going to be a share holder this would probably be more appropriate than acting as a sole trader. However, for your Pty Ltd company (associated to the ACN) to actively trade the business, it will also need to obtain an ABN.

    Business names and Companies are all registered through http://www.asic.gov.au these days. But, I would encourage you to seek further advice to ensure the right structure is set up for your new business, and ensure you understand any implications of the manufacturer holding shares in your company etc.

    If they are going to supply you with branded products, I would also make sure that their brand is registered as a trademark in Australia – or, at the very least the brand name is not going to infringe the existing rights of any Australian trademark holder. It would be horrible to find out after investing time and money into importing their branded products that you can’t actually promote the brand because it belongs to someone else already in Australia!

    Hi Jacqui, yeah you’re right! I think I still need to seek further advice to find out which one I would need. I will be emailing ASIC for further advice.

    Would you happen to know how much it would cost to register an ABN or an ACN? I heard that the cost for registering an ABN is free whereas ACN would cost me $800, would you know?

    Yeah, once I have ABN and ACN sorted out, then I would start looking into brands and trademarks.

    Thanks

    FS Concierge, post: 157534 wrote:
    Hi Kevin, and welcome to Flying Solo,

    That sounds like a great opportunity for you, and I wish you all the best with it.

    Depending on the type of health and beauty products you’re talking about, you’ll need to undergo a fairly rigorous regulatory review process to ensure they’re appropriate for sale in Australia. If you’re talking about vitamin or herbal supplements, this could be fairly extensive and expensive, and will likely require hiring specialist consultants and relabelling (and sometimes reformulating) the products to meet Australian requirements. (Relevant government websites for you to look at to start to get an understanding of the regulations involved are the Therapeutic Goods Administration and NICNAS).

    Good luck with it all,
    Jayne

    Hey Jayne, one of the beauty products I am going to try to get into Australia would be a face mask with moisturiser in it and an example of a health product would be a shoe which is designed to balance and improve one’s well-being so I think it would not be anything such as vitamins or supplements. I do have samples which I could provide if required. Anyway, I will check the websites you have provided me with and thanks for the heads-up Jayne.

    Thank you for all of your informative replies so far, it has helped me a lot.

    Kevin

    #1138011
    JacquiPryor
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    Hi Kevin

    Would you happen to know how much it would cost to register an ABN or an ACN? I heard that the cost for registering an ABN is free whereas ACN would cost me $800, would you know?

    ABN is free.

    If you end up going the sole trader route, rather than Pty Ltd company that gives you the ACN then you’ll also need a business name registration most likely, which will cost $70 for 3 years;

    ACN (i.e. Company registration) will vary depending on whether you do it yourself directly with ASIC (in which case, I think it’s about $426 from memory), or if you get someone else to do it for you. A company like Shelcom Corporate Services (members here) can look after the company registration for you – for around $700 I think it is; or you could have an accountant do it and they would have to quote you. (See Shelcom’s fees at http://www.shelcom.com.au/fees)…

    Note: ASIC will not be able to advise you about the type of structure you need. Usually it is an accountant or solicitor that would provide this sort of advice to you.

    #1138012
    Anonymous
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    Dhow_Aust, post: 157597 wrote:
    Hey Jayne, one of the beauty products I am going to try to get into Australia would be a face mask with moisturiser in it and an example of a health product would be a shoe which is designed to balance and improve one’s well-being so I think it would not be anything such as vitamins or supplements. I do have samples which I could provide if required. Anyway, I will check the websites you have provided me with and thanks for the heads-up Jayne.

    Hi Kevin,

    I think you will still need to do your due diligence on things like the face mask and moisturiser to make sure that it is compliant under the NICNAS regulations. Regarding the shoes, I can’t comment, but suspect that you may not be able to legally make any therapeutic claims for them (e.g. improves balance and muscle strength) unless they are registered with the TGA as medical devices. But this is not my area of expertise. If you end up needing a regulatory consultant, I recommend Robert Forbes and Associates in Sydney.

    All the best with it – make sure you let us know what you decide to do!
    Jayne

    #1138013
    RobynLee
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    • Total posts: 26
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    3. If the combined cost of the items is under AUD$1000, the entry cost would be waived. If this is true, I’m actually not quite clear how the duties and tax will apply. Would the duties only apply if the total shipment is AUD$1000 and above?

    Yes, for now at least under AUD$1000 generally does not incur any import fees, etc. though I have heard that may change.

    Once it is over $1000 you will pay import tax and GST on the goods imported (which is recoverable if you are registered for GST) as well as GST on the freight forwarding and clearing costs. This one bit me in the “bottom” first time I imported a shipment as I imported during one quarter and sold the goods bit by bit later so I had a fairly large GST amount to pay out and wasn’t able to recoup it till quite a while later… Probably stating the obvious for more seasoned importers but it really snuck up on me at a time when my cash flow was still very tight.

    Finding a good freight forwarder/customs clearing agent is really important and I have found you do tend to “get what you pay for”. Some are cheap, but then you get hit with a lot of hidden fees, especially fees charged for services within the country you are exporting from.

    #1138014
    Dhow_Aust
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    • Total posts: 5
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    JacquiPryor, post: 157605 wrote:
    Hi Kevin

    ABN is free.

    If you end up going the sole trader route, rather than Pty Ltd company that gives you the ACN then you’ll also need a business name registration most likely, which will cost $70 for 3 years;

    ACN (i.e. Company registration) will vary depending on whether you do it yourself directly with ASIC (in which case, I think it’s about $426 from memory), or if you get someone else to do it for you. A company like Shelcom Corporate Services (members here) can look after the company registration for you – for around $700 I think it is; or you could have an accountant do it and they would have to quote you. (See Shelcom’s fees at http://www.shelcom.com.au/fees)…

    Note: ASIC will not be able to advise you about the type of structure you need. Usually it is an accountant or solicitor that would provide this sort of advice to you.

    Thanks Jacqui, this would help me to clear out most questions I have regarding ABN, ACN and ASIC.

    FS Concierge, post: 157634 wrote:
    Hi Kevin,

    I think you will still need to do your due diligence on things like the face mask and moisturiser to make sure that it is compliant under the NICNAS regulations. Regarding the shoes, I can’t comment, but suspect that you may not be able to legally make any therapeutic claims for them (e.g. improves balance and muscle strength) unless they are registered with the TGA as medical devices. But this is not my area of expertise. If you end up needing a regulatory consultant, I recommend Robert Forbes and Associates in Sydney.

    All the best with it – make sure you let us know what you decide to do!
    Jayne

    Yes, once I have finish preparing the list of things I’m going to import from my manufacturer from the get go, I will contact a freight forwarder and a regulatory consultant to see what they think I would need.

    I will keep you and the thread updated with the progress that I’ll be making.

    Thanks Jayne.

    RobynLee, post: 157648 wrote:
    Yes, for now at least under AUD$1000 generally does not incur any import fees, etc. though I have heard that may change.

    Once it is over $1000 you will pay import tax and GST on the goods imported (which is recoverable if you are registered for GST) as well as GST on the freight forwarding and clearing costs. This one bit me in the “bottom” first time I imported a shipment as I imported during one quarter and sold the goods bit by bit later so I had a fairly large GST amount to pay out and wasn’t able to recoup it till quite a while later… Probably stating the obvious for more seasoned importers but it really snuck up on me at a time when my cash flow was still very tight.

    Finding a good freight forwarder/customs clearing agent is really important and I have found you do tend to “get what you pay for”. Some are cheap, but then you get hit with a lot of hidden fees, especially fees charged for services within the country you are exporting from.

    Hi Robyn,

    Thank you for answering that bit of puzzle for me. I’m glad to finally have someone to clear it up for me. Would you have a freight forwarder that you would recommend from your experience?

    Thanks!

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