Article: How to lower your import costs through transformation

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How to lower your import costs through transformation

JUNE 26, 2018
Author: Rob Garrison
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You've negotiated your product costs and placed you order. Great. But now, what additional steps can you take to reduce your import costs and make sure there aren't any unnecessary bills? Let's take a look at the opportunities you have to keep costs down, and how you could save nearly $350,000 annually across 100 shipments a year.

+ Opportunity 1

Ship Direct to Your Client or Distributor (DropShip)

The additional cost of shipping to your facility, handling the product, shipping to your customer can be a significant expense. By shipping direct, you can lower your logistics costs by at least $2000 per shipment

+ Opportunity 2

Lower your administrative costs

On average, importers spend 24 hours processing a single order. Using $50 per hour as a reasonable cost for processing, that's $1200 per order. Cutting that administrative time in half by deploying collaborative communication tools will save you an additional $600.

+ Opportunity 3

Eliminate your defect/damage rates

If .5% of your order is received with damages or defects, that's an additional $250 in cost of goods, not including lost sales. Eliminating defects through quality assurance programs will eliminate this cost.

+ Opportunity 4

Eliminate your rework costs

Similarly, if you have to rework even a small percentage of this order, you will spend a minimum of $500. Repackaging, relabeling, re-handling goods at destination is the highest cost method, and also adds time. Detailed packaging and loading guides can eliminate this issue.

+ Opportunity 5

Improve your time to market

A recent survey indicates that up to 50% of goods aren't manufactured on time, aren't shipped on time or both. The inventory and sales costs are at least $50 per day so a two day delay adds another $100 in expense. Milestones and alerts will keep your products on track.



What this means for you...
So conservatively, you could lower the cost of each shipment by 14% by transforming your processes to be as efficient as possible. Looked at another way, investing in transformation would save nearly $350,000 annually if your import volume is 100 shipments per year.

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