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Puerto Rico Guide for Importing
Basic Steps |
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The importing process involves constantly introducing new products into the marketplace at lower prices, helping customers to obtain a wide range of products, and thus keeping companies competitive in the face of increasing competition. Importing could be an excellent business opportunity if your product has better quality and lower price than local competitors. With this in mind, the Puerto Rico Trade Company has developed The Complete Guide for Puerto Rico Importers, where you will find all the general information required to import successfully.
Below you will find a brief summary of the steps that will guide you in understanding the requirements needed to import successfully:
- Knowledge of the local market
- Knowledge of the international business environment
- Making the decision to import
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Once you have analyzed the benefits and challenges of importing, you must ensure that your importing activities are compatible with the company’s overall market plan and that it is ready to undertake this program.
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The first recommended step for importing a product is to obtain general insight into the Puerto Rican market. Before making any business transactions, it is imperative to understand the culture, geography, history, government, and economy of the local market to determine the feasibility of importing a product. |
Key points to take into consideration:
- What benefits will importing bring to my company?
- Is there a commitment to develop a market for these products?
- Will the benefits of importing cover the associated costs, or are the company’s resources better served in other areas?
- Does my company have the personnel with the know-how to carry out the import process?
- Acquiring a competitive product
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In searching for a competitive product, the link between the product, its origin, and Puerto Rico’s market must be taken into consideration. For example, there could be an opportunity to import a specific product, but if there is no market in Puerto Rico, the effort will be unsuccessful, regardless of how thriving the product has been in its country of origin. On the other hand, a product with great market potential may be found, but there can be restrictions on the amount that can be imported, barriers on buying from the exporter’s country, or the supplier does not have the production capacity to meet demand.
| NOTE: |
The global economy is constantly changing, creating more opportunities and threats. In this ever changing arena, countries are constantly signing free tradeagreements that facilitate trade between two or more countries thus creating large regional blocks of free flow of goods and services. |
Identifying the Import Potential for a Product
Two quick ways of estimating the potential success of importing a product are:
if the product has been successful in a market similar to Puerto Rico, there is a good chance it can be successful in the local market,
if the product possesses unique qualities, which are difficult to replicate, it could be successful in the local market.
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You must understand the entire distribution channel that the product will undergo until it reaches the final consumer, in addition to all possible applications of the product.
In order to check specific requirements, as well as possible import restrictions, you may need the product classification. This number is found in the Harmonized System Code which is published by the US International Trade Commission (www.itc.gov) Importation restrictions are enforced mainly by US Customs and Border Protection and by the PR Treasury Department.
• Product Adaptation and Protection
All products must comply with certain country of origin regulations in order to be exported, as well as local regulations in order to be imported. Therefore, you should have a thorough knowledge of the product, as well as local requirements, to ascertain the degree of adaptation the product will require in order to be imported successfully. Furthermore, steps must be taken to ensure the product does not infringe any registered brand names, patents, or copyrights.
• Logistics and Formal Entry
When preparing to import, you must also consider the means of transportation to be used for moving the merchandise from the supplier to its final destination in Puerto Rico. Analyzing possible scenarios can help provide the most cost-efficient option for the company. You must discuss with the supplier all details regarding product handling, as well as payment for shippers. In order to set guidelines for these processes, a set of international trade terms have been created which assign responsibility and delivery terms. In order to obtain the entry of the merchandise, you will also have to provide several documents, including evidence of payment of corresponding tariffs and excise taxes.
• Negotiation
When negotiating with the exporter, it is recommended to keep in mind several factors which are key elements for a successful transaction. These include knowledge of the legal system of Puerto Rico, as well as the legal system of the country of origin, the merchandise transfer point, dispute resolution procedures, etc. It is extremely important that all information is discussed and delineated in a binding written agreement in order to avoid, whenever possible, problems with the exporter.
• Import Plan
Once you have taken the decision to import, researched the local market, structured the import logistics, and decided what needs to be modified, it is time to formalize the strategy and action plan for importing. Be it formally or informally, this plan is an essential tool for thoroughly evaluating all relevant aspects of the import process.
• Financing
Your business will likely need an infusion of capital in order to import. You should research the financing options available for meeting your company’s financial requirements. There are several options available for financing your transactions, including private and public institutions which can provide loans and guarantees for financing your operations and payment of merchandise.
For more information visit: http://www.comercioyexportacion.com
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