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Chris Malta is the Founder and CEO of Worldwide Brands, the Internet's leading Product Sourcing Experts. He is the Product Sourcing Editor for The eBay Radio Show, author of several EBooks, and co-Author of "What To Sell on eBay and Where To Get It", published by McGraw-Hill. Chris has a 30 year background in wholesale, retail and Entrepreneurial business.

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 Show Date: 2/25/2008
 Segment 2 – Current Issues in Importing – Kelby Woodard

Colette: Today we’re taking a closer look at how to ensure you’re complying with customs and safety regulations when you source products from overseas with Kelby Woodard, Principal of

Colette: Kelby, is it best to use one country predominantly when you’re importing so that you can get a handle on all these regulations and even the culture of the country? Me being from another country I know how different cultures can be.

Kelby: I would say that it depends upon how large you are and what volume you’re bringing into the U.S. And I would also say that it depends upon your commodity. If you look at toys, for example, one of the reasons why the toy manufacturers are in trouble is because there are only about forty manufacturers that manufacturer most of the toys and they’re all located in China. So they have all their eggs in that basket and when there’s a problem in China, when they get a cough, the toy sellers here in the U.S. get a cold, because they’re so focused on China that anytime there’s an issue it’s going to be a pretty massive issue. So typically, if we have a client of any size we suggest that you diversify your sourcing opportunities because there are lots of opportunities for most products to be manufactured in other places in the world. I would also say that primarily you need to be focused on regulations here in the U.S. because if you’re the importer of record for that product into the U.S., then really all you have to do is make sure that all U.S. laws regarding that import are followed and you’re compliant with those regulations, which means you only have to know one set of regulations. Usually your supplier is the one that needs to make sure it meets all the regulations of the country in which it’s manufactured, both from a governmental standpoint, but also from a customs standpoint. For instance, if you’re importing from Haiti, that supplier in Haiti needs to make sure that they’re compliant with Haitian customs and that’s not really your concern. If they’re not it could mean a delay in your supply chain, so the more you know the better off you are, but for the most part it’s the U.S. side that you need to be concerned about for your knowledge base. So you can import from anywhere.

Colette: Now to clarify, if you’re selling products in the United States, but what if you’re selling to another country, you’re importing in to yourself, but you’re selling that product into the U.K. or Australia? Maybe you’re getting the product from Mexico and then having it imported and then you’re shipping it? You should be aware of the regulations in those countries as well?

Kelby: That’s correct. And again, it’s important to know the volume of the company we’re talking about. Because if you’re shipping a few hundred entries a year into the United Kingdom, let’s say, from the U.S. usually what you would do is use a company like FedEx or DHL Express, those kinds of companies who have this pretty intensive knowledge of both U.K. as well as U.S. regulations and customs. So if you’re doing that primarily those regulations and concerns can be met by a FedEx or a small partial shipment company like that. But it’s when your volume increases and obviously your exposure increases as your volume increases, that does become more difficult if you’re selling to other countries to understand: 1) their culture from a marketing standpoint, but also; 2) their regulations from an importing standpoint. It can get fairly complex the larger you get because, of course, buying terms change regarding trade. So most companies who are importing into the U.S. that have any size to them usually buy what’s called FOB, or free on board, a foreign port, meaning that your supplier is responsible to get that container through the export customs process, through all the logistics in that country, and that you take possession of that once it is on board the vessel bound for the U.S. And that’s when your responsibility for the regulations and everything else take over.

Colette: So the supplier’s main responsibility is getting it onto that ship and then you take it over, right?

Kelby: That’s correct. Now, there are occasions where companies find it beneficial to buy what’s called X works. If you buy X works, then you’re basically buying it at the shipping door of the manufacturer wherever they are in the world. That’s much more complex for smaller companies because you have to know the export regulations, because you’re now responsible for it. So watch the buying terms.

Colette: Well, you know, it’s one of those things you’ve just got to work out what’s best for your company and how you want to handle it.

Kelby: That’s right.

Colette: It is time for another short break. We have a lot more to talk about with Kelby Woodard when we return. Go to to listen to any of our past shows, read written transcripts, link to our podcasts, and more. I’m Colette Marshall.

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