Section 2.

4- Cost Reduction:
Advantages to the Importer

1) Bulk buying
2) Getting discounts from the exporter
3) Demanding
promotional
materials
from the supplier or vendor
4) Deferred shipment discount
5) Choosing product leader
6) Using free trade zone
7) Examining the CBSA rules
8) Checking
various
free
trade
agreements
9) Checking the freight quotes from the
exporter
a) Demurrage

Section 2.4- Cost Reduction:

Advantages to the Importer (Continued)
10)Asking the exporter to break costs
properly
11)Trying to use exporters assistance
12)Asking the exporter to share the
exporters
countries
drawback
incentives
13)Choosing a proper sales and payment
terms
14)Providing the entire shipment file for
the customs broker
15)Choosing the proper insurance clause
16)Checking the advanced ruling from
the customs

Section 2.4- Cost Reduction:

Advantages to the Importer (Continued)
19)Using Countertrade if possible
20)Proper packing and packaging
21)Checking the current and future
currency rates
22)Checking gray markets
23)Making sure the information is
updated
24)Inspecting the shipment
25)Having a back-up source of supply
(next slide)

Section 2.4- Cost Reduction:

Advantages to the Importer (Continued)
Always have a back-up source of supply:
a) For up to date information by
comparing prices within suppliers.
b) Having access to two lines of credit
instead of one
c) Purchasing split shipments from
both
d) If something happens between the
importer and the supplier, business
can still continue with the alternate
supplier.
e) The importer may play one supplier
against the other and reduce the

Section 2.5 Topics/Issues of

Importance
1)
2)
3)
4)
5)

Packaging Guidelines
Letter of Intent
Check your trade finance issues
Choose your strategic Planning
Choose between consumer or industrial
goods
6) Check rules and regulations regarding
marketing
7) Study the import process in detail
8) Examine the Performa invoice and the
purchase order
Department of Finance Canada

Section 2.5 Topics/Issues of

Importance (continued)

9) Checking AMPS, the Administrative

Monetary Penalty System
10)Checking all commercial, financial and
transport documents
11)Paying attention to the market
12)The mode of distribution, level of
patterns of domestic distributors
13)Issues
of
translation
between
Importer and Exporter
14)Understanding the difference between
the Acts of God and Force Majeure
15)Understanding Non-Customs law

Section 2.6 Modes of

Transportation

1)Railroad: dependability is average, costaverage, speed-moderate, accessibility and

capability-high, suitability-heavy bulk goods
2)Ocean vessel: dependability is low, costlow, speed-slow, accessibility-low, capabilitiesmoderate, suitability-bulk goods and nonperishable products
3)Trucks: dependability-high, cost-high for
long distances and low for short distances,
speed-fast, accessibility-high, capabilitieshigh, suitability-for wide range of products
4)Air: dependability-high, cost-high, speed-very
fast, accessibility-low, capability-moderate
suitability-for
valuable
and
perishable
products
5)Internet: dependability-high, cost-very low,
speed-very
fast,
accessibility-very
high,

Section 2.7 Importers and

Intermediaries
1) Independent Intermediaries:
a)
b)
c)
d)

Transact business with many importers

Do not have inventory
Buy and Sell directly
Sell the product as is

2) Merchant Wholesalers:
e) Take ownership of the shipment from the
importer, and distribute the product
f) Work on volume
g) Minimize costs
h) Work on low prices
i) Do not finance All Cash
j) Carry Inventory

Section 2.7 Importers and

Intermediaries (continued)
3) Rack Jobbers:

a) Work with and provide services to retailers

directly
b) Have the Highest Margins
c) Take Inventory but small amount
d) Keep almost one week credit

4) Cash and Carry Wholesalers:

Their interest is in turnover and high volume

5) Truck Jobbers:
a) Deliver items from importer to market
b) Known for prompt delivery

6) Mail Order Importers:

Send customers catalogues, they choose items
and purchase them.

Section 2.7 Importers and

Intermediaries (continued)
7) Sales Brokers:

a) Maintain
low
inventory
in
different
geographic regions
b) Get brokerage from the seller and buyer

8) Import Sale Offices:

a) Maintain no inventory
b) The purpose is to reduce selling costs
c) Usually book orders on behalf of clients in
their import market

9) Importer/Manufacturer
a) Known
for
displaying
products
for
customers in show rooms.
b) The advantage here is that customers can
examine the product directly before
confirming the purchase.

Section 2.7 Importers and

Intermediaries (continued)
10)Manufacturers Representatives:
a) Mostly for Industry and pharmacy samples
b) Sell products made by manufacturers
without conflict

Section 2.8 Non-Customs

Laws: Influence on Importers

1) Animal Disease and Protection Act:

Covers animal products meat, meat products
and import of animals

2) Canada Agricultural products and

Standards Act:
Legislates dairy products, process poultry,
wool, fresh fruits and vegetables, honey and
maple products etc.

3) Consumer packaging and labelling

Act:
Prints on all packages should be in English and
French, no requirements for printing origin of
products, but the importers name should be
clearly mentioned

4) Copyright Act:

Section 2.8 Non-Customs Laws:

Influence on Importers (continued)
5) Explosives Act:
Importers and exporters of explosives need
explosive importation permit, issued by the
department of Energy, Mines and Resources.

6) Fishing Inspections Act:

Covers seafood products, shellfish, marine
animal; importers must have the department
of fisheries and ocean license.

7) Food and Drugs Act:

Covers import and sales of all food products or
ingredients, drink, drugs, cosmetics and
medical devices.

8) Precious metals markings Act:

Articles containing gold, silver and platinum,
these metals must be marked in order to indicate

Section 2.8 Non-Customs Laws:

Influence on Importers (continued)
9) Textile labelling Act:
All consumer textiles sold in Canada must have
approved labels in English or French, and
describe fiber contents and also identify the
label in shirt (tags). This Act is using for labels
on books, toys, pictures, lamps, sports
equipment and belts, etc.

10)Canadian Food Inspection Agency:

For food and all wooden furniture

Section 2.9 Importers and the

Customs Checklist

1) Know the accurate description of the goods

2) Chose a proper HS code
3) Check the D-Memo regularly for certain rules,
HS codes changes, quotas requirements, and
trade barriers
4) Have all documentations with you
5) Check all shipping documents
6) Always check with commodity specialist,
trade consultants, customs brokers and
customs specialists; customs specialists deal
with advance rulings, and proper HS codes
7) Make sure you have all certifications and
specs analysis
8) Make
sure
you
have
proper
Transaction Value Method

Section 2.10 Final Act of WTO

Short History:
GATT, General Agreement Tariff and Trade,
was established in 1948 after World War II.
GATT was replaced by WTO , the World
Trade Organization, because GATT did not
have enough power. WTO is located in
Geneva, Switzerland, and established on
Jan 1, 1995.
The purpose of WTO is to reduce tariffs
and non-tariff barriers. The number of
members as of June 2014 is 160, and 24
observer governments.
World Trade Organization

Section 2.10 Final Act of WTO

(continued)

WTO
Agreements
and
Responsibilities:
1) Agreement on Agriculture
2) Agreement on
Sanitary and Phytosanitary
3) Textile and Clothing Agreement
4) Agreement on Technical Barriers to
Trade
5) Trade Related Investment Measures
(TRIMs)
6) Trade Related Intellectual Property Right
s
(TRIPs)

Section 2.10 Final Act of WTO

(continued)

WTO
Agreements
and
Responsibilities: (continued)
10)Issues Policies and Formats on Rules of
Origins
11)Agreement on Subsidies and Counterva
iling Measure
12)Child Labour Issues
13)Supports Trade and Environment
14)Safeguard Measures/ Escape Clause:
a) Balance of payment accounts is weaken
b) Cause of massive unemployment
c) Cause of business to shutdown