Importing goods from country with no Free Trade Agrmt

Hi all

I’m considering importing some products from overseas and sell them in Australia and would like to bounce a few things off everyone.

The products would cost between $800 - $3,500 per unit. They are currently manufactured from Europe and shipped from a country with no Free Trade Agreement with Australia.

The products are being sold via websites in US, Europe & Asia at the moment.

The import taxes & duties that apply are as follows:
- 5% duty
- 10% GST
- Customs Clearance fee $88 for total value between $1k - $10k [total value is value of goods plus insurance plus freight] (I assume it’s per transaction not per unit eg: if I import 8 units at $1,000 each, that’s $8,000, and I pay $88 once rather than 8 times)

My thinking is to purchase them at wholesale from the manufacturer and hold the units in Australia, and then sell them via an Australian website.

My first question to myself is - why would anyone buy from my Australian website IF they can buy it from overseas website say Singapore. I guess it happens with other products too, and for convenience:
- people may prefer to buy “local” so there’s no “surprise” import taxes bill to be settled before receiving the product, and
- potentially slightly faster delivery (a couple of days faster max).

If the manufacturer is already shipping to another country eg: US, which has FTA with Australia, would it be possible to negotiate with the manufacturer for me to receive my wholesale order from the US distribution centre. Would this circumvent the import taxes & duties? [Thinking out loud, may need to account for the shipping cost from Europe to US so it will erode some of the savings in import duties].

For those who have started an online business selling things, did you do a lot of ground work before you set up the site and started taking orders eg: did you go see a lawyer to understand import law, supplier obligations, consumer law, set up company and speak to a broker about insurances etc. Or did you just go for it and worked it out along the way.

Thanks in advance.

 

Be aware that "free trade" doesn't necessarily mean that all goods imported have zero import duty - it is short hand for "preferential treatment". It is common that country of manufacture (or certain %) is required for any reduced tariff or other concessions.

 

Thank you Mark, is there an easy place to check what goods fall into which category (if you know)? Ta!

 

The schedules are on line but need wading through. Just to clarify - importing goods not made in say the US from the US will not be covered by the Aus-US FTA.

 

Thanks Mark
You’re spot on
I assumed the unit came from Europe and that’s why I paid for import tax
Bur the manufacturer confirmed it was in fact shipped to Aus from US distribution centre

 

Curious what kind of margins would make it worthwhile for you to consider starting a company/ business?