Importing is exciting for all businesses—it allows you to tap into new markets and opens up a wealth of new business opportunities. However, it’s important to do your due diligence. Certain products are far more suited to being shipped internationally than others, and understanding importing and exporting laws and regulations is vital to ensure you meet your legal obligations. There can also be a number of hidden costs associated with importing that you haven't considered.
With so many requirements, custom duty tax, trade regulations and other things to consider, many small businesses choose to hire a licensed customs broker to do the heavy lifting. Our goal is to help you understand the various services offered by customs brokers and how they can assist you.
When do I need a customs broker?
Below are some common scenarios that may require you to hire a customs broker:
- You don’t have an importing license
- You’re new to the nuanced world of importing and are feeling overwhelmed
- You are unsure of how to classify your shipments under the right codes
- There are additional requirements or stricter laws tied to the country you’re importing from
- You can’t afford to make mistakes or have your goods seized by authorities
What is a customs broker?
A customs broker is an expert in arranging the customs clearance processes for your freight and postal shipments. They are licensed to complete all of the necessary paperwork to comply with country-specific government laws and regulations. In exchange for a fee, customs brokers can:
- Determine the relevant duties that apply to your goods
- Decide the classification and value of goods
- Ensure your goods are cleared through customs efficiently and with minimal issues
- Manage all refunds of duty tax and other fees on your behalf
- Manage all of the necessary paperwork
What services does a customs broker offer?
Below are the main services offered by customs brokers:
- Customs valuation
- Customs clearance (for sea freight, air freight and postal shipments)
- Tariff and duties calculations
- Brokerage services
- Quarantine and customs inspections
- Logistics management
- Trade compliance services
- Trade consultancy services
Why use a customs broker?
The key benefits of hiring a customs broker versus importing goods yourself are:
- The complexity of the importing process
- Mitigate risk
- Streamline the process
- Minimise delays
- Focus on other core business objectives
In most places, only the owner of the imported goods or a licensed customs broker can submit an import declaration. However, most importers choose to hire a customs broker anyway due to the complexity of the importing process. It’s also a safer option in terms of mitigating risk. For example, if you don’t complete your paperwork correctly you could risk a fine or your goods could be detained. If your goods are detained, they can speed up the release time so your customers aren’t kept waiting for products.
A customs broker streamlines the entire process and shaves off a considerable amount of time you’d need to complete paperwork. They also make sure all documentation is completed correctly to save you from dealing with local authorities. If your documentation or goods are flagged up for whatever reason, they’ll deal with any issues on your behalf. All in all, hiring a customs broker frees up your time to focus on other core business objectives.
How much does it cost to hire a customs broker?
Most customs brokers charge a brokerage fee that is calculated as a percentage of the total value of a shipment. You may also be able to negotiate a fixed rate depending on the number and complexity of customs entries and the total value of goods you are importing.
Some customs brokers also offer fixed-fees for specific services.
How do I hire a customs broker?
Here are some key considerations to help you choose a customs broker:
- Check their licenses/permits
- Experience in your industry
- Your business size
- Customer service and support
Always make sure a customs broker holds the required licenses/permits to import your particular goods within your country or jurisdiction. Although it’s not essential, a broker that has experience providing services for businesses in your industry would be advantageous as they’ll know the ins, outs of importing particular products.
You should also aim to hire a broker that specialises in services for small to medium-sized businesses and has an excellent customer support team. Ask them as many questions as you need in your initial conversations to determine if they’re a good fit, and check out online reviews and testimonials.
If you’re looking to start importing, we can connect you with customs brokers here on SavvySME. Simply answer a few questions about your business and we’ll introduce you to the right professionals.