Introduction to exporting: part one
This article provides information on:
- Product suitability;
- Regulations and taxes.
We have a second article, entitled, ‘Exporting: part two’,which provides information on:
- Terms of delivery;
- How the products will be sold.
Whether you want to increase your sales abroad or export a new product to sell overseas, exporting can provide you with a whole new range of products and customers.
Despite the obvious benefits, exporting can be problematical and expensive; there are many laws, regulations, and situations that need to be taken into account. Of course it’s not only the country you export from but the country you export to, for which you must abide by their laws. We explain the most common here.
It is essential to master the administration of exporting and to make sure it is concise and logical. Paperwork must be in a format that will satisfy and function in both countries, some of which may be less advanced than Australia.
Is it lawful for the product you want to sell to be exported? A number of products are restricted in Australia; including:
- Some foods;
- Some flowers;
- Plants or seeds;
- Some types of electronic equipment and;
- Certain types of art and antiques.
Each country will have a different list of restricted products. You should always find out as soon as possible if the product you wish to move is restricted.
A number of items will require a licence.
Some products are more suitable to exporting than others. You must consider whether:
- Your product is suitable technically;
- You can market your product overseas and beat the competition;
- There is demand for your product;
- The competition can be beaten;
- If your product will need servicing - by whom will this be done?
- The target country is stable (conflict affects countries overnight);
- You need to conduct specific market research (is your product unchallenged or will you have to gain a share of the market from an existing exporter or local manufacturer).
Additionally, you will need to consider:
- Shipping and transport: cost and delivery preferences;
- Packaging and labelling: get it wrong = delays, even lost goods;
- New invoice and payment skills: totally unique skills;
- Good knowledge of import country: you are blindfolded otherwise.
An export manager can help you with all these concerns. Of course, they too, will cost money!
Will Your Products Work?
A crucial element of exporting is knowing that the product will sell. If you export an electrical item, will it need a new plug or adaptor to run? Is it compatible with other Chinese / Japanese accessories and products? Are the instructions and product details in the right language? Some countries and products require readable instructions by law.
Regulations and Taxes
Duties and GST
In the majority of cases, you do not need to charge duty or GST on exports. The rules are different depending on the product and whether it is being exported in or out of Australia. Before you start exporting, you must make sure that you are fully aware of any duty or GST you need to pay when exporting.
As small businesses may not be GST registered, the rules will vary depending on the product, you should be certain to clarify the duty or GSTT you will need to pay, and how this will change if you register for GST in the near future.
Depending on the amount you export, some business will be entitled to claim back some of the duty or GST payments that you make.
The vast majority of exports outside of Australia need to be declared to Customs and Excise as they leave the country.
The exact details of export regulations are long and complicated. One way to help improve your businesses ability is to undertake export training. This will help you to understand in more detail the rules and regulations regarding the products you move.
This will help to ensure that you pay all necessary duty, and are able to claim back all the money you may be entitled to. The cost of training can be quite high, but if your business is looking at exporting in the long term, then the cost will usually be more than worth it.
The government offers some basic training and education in exporting.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
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