Worried About Rising Export/Import Prices? Best Tips to Save Money on Your Next Transaction!
The Covid pandemic has affected the whole world and has turned out to be a disaster for all the economies around the globe. However, with the hardships and downturns that the countries are facing, new opportunities have also emerged. India’s exports for around all commodities have increased during this time, specifically the handicrafts sector is performing really well and is expected to rise even more in the years to come. This might be the right time if you are looking to enter into the arena of handicrafts export. If you have planned to start the handicrafts business or are already into it and are facing the issue of rising export or import prices, this is the perfect article for you. Follow this complete guide and learn some of the best tips to save money on your next transaction.
Table of Content
- Understanding Costs and Prices
- Best Exporting Tips to Save Money on Your Next Transaction
- Understand About Incoterms
- Research About the Market in Which You are Exporting
- Make Use of Facilities that Reduce Your Cost
- Do Proper Paperwork
- Best Importing Tips to Save Money on Your Next Transaction
- Comparison of Freight Charges
- Choose Insurance Policy Carefully
- Buy Large Quantities
- Export / Import From Craftezy and Expand Your Handicraft Business
- Benefits for Exporters
- Benefits for Importers
Understanding Costs and Prices
Operating an export business of handicrafts requires immense attention and undivided time. In this business, challenges from across all the spheres can come your way and hamper your business’ growth. Whether you are a retailer or an exporter, your business will be filled with challenges most of the time. Sometimes, it will be in the form of backward integration where you will have to look after the quality, packaging, safety and various other complications. While at other times, it will be in the form of forward linkages where you will have to find the right market to export your handicrafts along with finding the right prices for the crafts so that you can earn a decent profit and not lose your customers too. Before deciding to export handicrafts, it is imperative that exporters learn to scale up their production that matches with the global market. Fiscal discipline is very important in this type of business. An exporter should map out all the expenses before getting into this field and also should keep an emergency fund for overlooked charges and cost and unprecedented circumstances.
Best Exporting Tips to Save Money on Your Next Transaction
Understand About Incoterms
The International Chamber of Commerce has published a set of terms to facilitate commerce around the globe which is known as Incoterms ( International Commercial Terms). Incoterms are very important as they help carry out foreign trade contracts efficiently and prevent confusion by stating the obligations of sellers and buyers who are carrying on the trade at an international level. These can be very frustrating at times and difficult to understand. Many exporters agree on these terms without understanding it and end up paying more. As a prudent exporter, you should understand rights, responsibilities, costs and obligations that come with a specific Incoterm. You should keep in mind that a term of sale is included in every quotation or sale of handicrafts. Failing to identify the specific Incoterm to the client can lead to an underestimation or an overestimation of cost which are related to the handicrafts that the exporter is exporting.
Research About the Market in Which You are Exporting
It is very important that you have adequate knowledge about the market in which you are exporting. Research should be conducted and demand of the market should be studied properly. There may be certain categories of handicrafts that are more in demand in one area whereas the demand of that category is low in other areas. Knowing about the market in which you will be exporting your product can reduce a lot of stress. Understanding about their currency, local tax system, business culture and local culture can provide you an added benefit and save a lot of your money.
Calculate Export Cost Properly
All the costs that come along with the cost of the handicraft should be added to arrive at the proper rate. While calculating the cost of production, fixed and variable costs should be considered. Fixed cost basically includes cost of wages, machinery, rent, etc while variable cost includes cost of transportation, storage cost and so on. After calculating the approximate price of the production of the handicrafts, you can add costs that you will have to incur while you’re exporting. Additional costs include loading charges, freight charges, clearing charges, forwarding charges, insurance charges, dock charges, duties and taxes, factor in discounts and so on. After determining the markup and the margin rate, set the prices of handicrafts.
Make Use of Facilities that Reduce Your Cost
The total cost that comes after consideration of all the above factors that we have discussed above can be brought down significantly. We can avail various facilities like cashback, exemption of taxes and excise duties, export credit and much more. With the increase in the digitisation process, facilities like cashback and discounts have increased a lot.
Do Proper Paperwork
Every exporter must keep in mind that there are different sets of importing regulations for different countries for which you will require custom paperworks and licenses. Some countries are lenient on the paperworks while some are not. Exporters must ensure that they have proper documents and paperworks so they do not have to see the face of fines and penalties.
Best Importing Tips to Save Money on Your Next Transaction
Comparison of Freight Charges
It is generally considered that the freight charges by sea are lower than the air freight charges. However, it is not true in all cases. Freight charges are determined by factors like weight, the value of the consignment, volume, and so on. Let us take an example to understand how air freight charges can be economical as compared to the freight charges by sea. If the weight of your consignment is less than 500 kilograms but the volume of your consignment is negligible, then the air freight charges will be more economical as compared to the freight charges by sea. Apart from being economical, it has several other advantages like faster delivery, reduced chances of breakage or the loss of consignment and so on. Thus, importers should always compare both the prices of freight and then choose the option that suits them the most.
Choose Insurance Policy Carefully
When you are importing handicrafts, you should consider some factors before choosing the insurance policy. It is very important that your insurance premium should cover the value of the product that you have ordered including the customs duty. We should include customs duty also since it will help us recover the full amount that we have paid if any damage is noticed in the imported order after the clearance has been made. Insurance policy from a single insurance company is advisable since it offers you many advantages in the form of discounts.
Buy Large Quantities
Importing large quantities of handicrafts can help you bring down the transportation cost significantly. Suppliers usually agree to provide handicrafts at lower rates when the quantities that you order increases.
Export / Import From Craftezy and Expand Your Handicraft Business
Whether you are an importer or an exporter of handicrafts, Craftezy is the go-to place where you can register and grow your business of handicrafts. It is a trading platform that has been researched extensively during its formative years and has created a niche market for various categories of handicrafts coming from the length and the breadth of India. Here is the list of benefits that Craftezy offers to its exporters and importers:
Benefits for Exporters
- Exporters can register themselves free of cost. No hidden charges or registration charges are charged.
- Craftezy helps in providing exporters with global visibility. The team of Craftezy helps exporters in the efficient management of their catalog and saves their time.
- Various activities like managing your dashboard, modifying product details, setting your minimum order values and running sales promotion is carried out by the platform. The product support team of Craftezy is always available for your support.
- Logistical support along with convenient payment methods is provided by Craftezy to make your exporting process hassle-free.
Benefits for Importers
- Craftezy has one of the largest supplies of handicrafts covering more than 5000 different varieties coming from 1000+ authentic suppliers. Thus, you would not have to look after any other site to import handicrafts. All the suppliers who have their products listed on the platform are verified.
- The negotiation process is carried out by the team of Craftezy on your behalf which ensures that you get the most genuine rates. Multiple quotations are provided so that you can choose from the one that suits you the most.
- Proper logistical support and convenient payment options like escrow services, debit cards, credit card,s and payment gateways are provided to the importers.
Register on Craftezy and grow your handicraft business exponentially.
