4 Benefits of Importing Goods From Overseas 4 Benefits of Importing Goods From Overseas

Any business involved in supplying goods or materials needs to constantly look at ways to increase the efficiency of the supply chain, while also managing costs. A practical solution to improve profit margins is to look to the overseas market for the raw materials. Importing goods can offer a variety of worthwhile benefits, such as high-quality goods, lower prices and a wider range of suppliers. While the opportunity to import goods is great for a lot of businesses, it is still essential to conduct the necessary research to avoid making a costly mistake.

Here are a few benefits related to importing from overseas:

Comparative advantage

A major reason to import relates to comparative advantage and the potential to benefit from the more attractively priced goods. Comparative advantage relates to finding the overseas market with the more favorable production costs, such as lower tax schemes, low labor costs, cheaper raw materials, etc. By cutting the initial investment in materials or products, it makes it that much easier to increase future profits once the items are shipped back and sold in your own country. This makes importing one of the easiest and quickest ways to boost your profit margins and cut costs.

High quality products

Importing goods from countries across the world still mean it is possible to source high-quality products. There are plenty of countries that have their own specialties and strengths. For the business that is looking to buy raw materials or goods from a country that specializes in a particular item, it often pays to buy direct from the source. This means it is possible to get access to the finest materials right at the start of the supply chain which should help to improve all-round quality and hopefully make the end product that much more marketable.

Trade relations

There are plenty of countries that attempt to promote trade relations to make it that much easier to import the desired goods or products necessary for your business. Government agencies may even be set up to help make the entire importing process as straightforward as possible. With the guidance of an official agency in place, the risks of trading with an overseas company are likely to be significantly reduced.

Regional resources

A further benefit is the ability to expand the potential market pool with the choice to buy resources that may only be found in specific regions of the world. This may relate to special technologies or raw materials.

Chase Bank Loan Modifications

Chase Bank recently announced that from Jan -July 2010, it has assisted approximately 900,000 homeowners interested in modifying their home loan. What’s interesting about this announcement is that Chase is actually doing something to address the three major complaints that have plagued both HAMP (the Federal “Home Affordable Mortgage Program) as well as the entire banking and loan modification industry. Here are the three major pitfalls and what Chase is doing about them.

Problem One. The loan modification process confuses most homeowners.. The majority of homeowners throughout the United States originally purchased their home through a realtor or mortgage broker who held their hand throughout the buying process and guided them. To help bring a homeowner up to speed to do a loan modification, Chase now assigns a counselor to each customer that is working with Chase; this counselor walks the customer through the modification process and is their primary contact with Chase from start to finish.

Problem Two. Banks commonly lose documentation and ask homeowners to resend documents. Most homeowners who have encountered financial difficulty find it difficult to send the necessary documentation to a lender and hold a job at the same time. What makes things worse, some homeowners learn that after sneaking off at lunch to fax the financials from a Kinko’s, that the documents previously sent were either lost, incorrect or never received by the financial institution. The other day, for example, a person at a bank notified me that an application had been rejected because it was missing a zipcode on the address. She told me that resubmitting the correct document should be an easy task, not knowing how precarious the current job market is and how difficult some companies make it for their employees to do personal tasks while on the job. To make things easier for homeowners, Chase has established a centralized location for document collection and imaging, making it easier to review a customer’s file and reducing the need for borrowers to resend documents.

Problem Three. Loan modifications take too long. Most homeowners have been promised that their modification will be approved after making three monthly trial payments only to learn that after making seven or eight trial payments they are no closer to gaining approval than when they first started. To help speed things up, Chase has hired 8,000 new credit counselors to help complete the loan modification evaluation within 30 days of receiving borrower’s completed application package.

By expanding their team to assist customers, Chase can now weed through their applicants more effectively. They can communicate better and help those fortunate enough to qualify and discover the homeowners who are not eligible for a modification but who might want to pursue a short sale or other foreclosure prevention option. Still the statistics for loan modification approval from Chase are not encouraging. From Jan – July of 2010, only 27% of the modification applicants offered for the Chase HAMP program had gained approval, and 38% of applicants through Chase Bank’s own loan modification program had been approved. But at least it’s a start in the right direction!

The Effects Of The Global Trade Agreement

We live in a world that is increasingly getting connected. In such a world, trade agreements are bound to expand internationally, and to think and act otherwise would be downright stupid.

These global trade agreements, as such, are either bilateral or multilateral understanding between two or multiple countries and govern the trade policies between them. These agreements have a massive impact on worldwide trade and investments and are one of the major causes responsible for shaping business relationships across the globe. And while such agreements might not affect directly affect the place where you live or operate, being aware of the current trade agreements can definitely uncover numerous opportunities.

Forming up opinions is up to you; we do not intend to initiate an argument over how good or how bad these global trade agreements are. This article aims to get you familiarized with such agreements and tell if your supply chain could be affected or not.

While a few countries have settled upon free trade agreements and are in the process of widening them, a number of other nations have formed common markets and unions; this form of development can a have a thorough effect on small-scale businesses.

Two of the most common agreements are the Trans-Pacific Partnership (TPP) between Australia, New Zealand, Singapore, Canada, Brunei, Peru, Mexico, Chile, Malaysia and Japan, and the North American Free Trade Agreement (NAFTA) between Canada, United States and Mexico.

Now, how such agreements impact your local business’s supply chain depends on a simple fact; whether your business is an importer, exporter or neither.

Scenario 1: You neither import nor export

It’s fairly easy to decide whether you are an importer or not, right? I understand that you do not directly source products from a foreign supplier, and technically speaking, that doesn’t make you an importer. However, trade agreements can still impact you. Your suppliers are directly affected by such regulations, and this vulnerability can affect your supply chain.

Keep the distinction in mind.

Scenario 2: You identify yourself as an importer

Owing to the low cost manufacturing in some countries, many small scale suppliers are able to compete with global giants.

With a trade agreement between two countries, most of the times, the country with lower labour costs benefits when the trade tariffs are lowered or eliminated. With trade agreements, importers usually get to source low-cost goods and it allows for the unrestricted movement of such low-cost goods through higher cost partner nation.

In case, such an agreement is dissolved, an importer would inevitably face a higher cost of goods and thus look for cheaper sourcing options, decrease their operational costs, and ultimately increase the prices, which would be borne by the customers, of course.

Scenario 3: You are an exporter

This even counts if you sell products that another firm exports because at some point or other, taxes would be levied on your sold goods. So how does it affect you? Your customers end up paying higher amounts for your products.

With a trade agreement in place between the country where the product originates and the receiving country, the very same products would move through the receiving nation freely. In such cases, you’d definitely want to keep such an agreement intact and leverage this competitive advantage you have in this particular country bound by trade regulations.

As a small or a medium sized business, it is therefore important for you to identify where your business lies with respect to global trade agreements.