IMPORTING INTO THE UK IN 2021 – What to look for when choosing a supplier?
This article will cover the key steps you need to consider when choosing a supplier from where to find suppliers to shipping and delivery of quality standard products to your business premises.
As briefly discussed in our previous article on essential tips for businesses importing in the UK, assessing your supplier’s creditworthiness, reputation, and that they have met all legal obligations before exporting will help you to avoid unnecessary future costs, delays, and legal complications associated with illegal transactions.
· Finding Suppliers
· Quality Assessment
· Reputation and Creditworthiness
· Shipping and Delivery
1. Finding Suppliers
For most people, the search for suppliers commences online. Websites such as Alibaba or your local Chambers of Commerce are a good start. They contain a multitude of manufacturers and suppliers to choose from. Alternatively, consider recommendations from friends and people within the same industry, trade associations especially if you are interested in a particular industry, directories, business advisers, trade press, and exhibitions.
Once you have identified your potential suppliers, draw up a list of what you require of your suppliers and seek to contact them to assess whether they meet your specifications and are credible.
2. Quality Assessment
Now that you have identified your potential suppliers, it is important to ensure that they can supply quality products that meet your required standards within a specified time scale. Consider whether there are any specific safety regulations for the product you intend to import and that the supplier can meet them. Depending on the product you intend to import (for example medicines), you may need to assess your supplier to ensure that their production processes meet the minimum standard referred to as Good Manufacturing Process. If you are or intend to be a wholesale dealer of medicines, you are also required to acquire medicines from a licensed supply chain, consistently store, handle, and transport them under suitable conditions, as required by the market authorisation or product specification. Find further guidance on the importation of medicines here.
To ensure that a supplier’s products meet your quality expectations, request for samples. Whilst some suppliers may offer free samples, some suppliers offer free samples if you agree to pay for their shipping cost. Be prepared to pay for samples if asked to as some suppliers may not offer free samples. Additionally, seek to acquire information on how the supplier sources their raw materials to assess the sustainability of their sources to ensure that the supplier has a reliable supply chain to prevent avoidable future product shortages.
Consider product pricing and ensure that you buy products at a reasonable price that will not considerably lower your profit margin. Negotiate with the supplier by giving them a lower counter offer to the product starting price. Usually, the supplier may be able to offer a lower price depending on the quantity of products you intend to buy. Request for a breakdown of what features the product price covers and eliminate features that you do not need. This may lower the overall product price. If the product price is too good to be true, pay extra attention to the quality of the product, the production process, and how the raw materials are sourced.
3. Reputation and Creditworthiness
Carrying out credit checks and interacting with other importers who have used the same supplier previously will assist you to evaluate your supplier’s creditworthiness and reputation. Assessing your supplier’s creditworthiness enables you to determine whether your supplier has sufficient cash flow to deliver your order when you need it. It also offers you reassurance that your supplier will not be going out of business soon. Companies such as Dun & Bradstreet, Experian, and the IoD Business Information Service offer international credit reports.
If you are using online directories such as Alibaba to find suppliers, ensure that the traders have traded for a long time on Alibaba, have a good industry rating, and do not have any reported issues. Pay attention to the supplier’s profile and ensure that they have either an Alibaba ‘gold supplier’, ‘verified seller’, and/or ‘trade assurance’ badge. A gold supplier badge represents suppliers who have been verified as having commercial and industry capabilities. Suppliers with a ‘verified seller’ badge are those whose companies’ profile, management, production capabilities, product, and process have been assessed, certified, and/or inspected by third-party institutions. Lastly, the ‘trade assurance’ badge represents gold suppliers who accept payment through Alibaba.com, enabling Alibaba.com payment and order protection.
Find out what legal obligations your supplier must meet before exporting and that these are met to avoid any unnecessary future costs, delays, and legal complications associated with illegal transactions. Your supplier may require licenses and certificates to export goods to the UK. They may also be required to conduct export declarations in their country. Carry out your due diligence to ensure that your supplier has not made any facilitation payments to speed up administrative tasks or to obtain the required licenses or obtain customs clearance as this is an offence under the Bribery Act 2010.
4. Shipping and Delivery
Agree on the delivery terms with your supplier. Negotiate each other’s responsibilities for every stage of delivery, insurance, and customs clearance. Use internationally recognised international laws such as ‘Incoterms 2020’ which provide guidance on each party’s responsibilities. Delivery time is important as it will often directly impact your ability to fulfil 3rd party contracts.
Consider what shipping option is suitable for your business. In our previous article which can be accessed here, we discussed the different transportation options available in detail and what to take into consideration when choosing the right shipping means for your business.
If your shipment is smaller than 100kgs, use a well-known air freight carrier. If your shipment is larger than 100kgs but smaller than 800kgs, we recommend that you contact a freight forwarding company for the best rates. Air shipments usually take 3 – 7 days to arrive to the UK from China. For shipments larger than 800kgs, consider sea transport because it is cheaper. Sea shipments usually take longer and are often characterised by delays, so it is important to ensure that goods transported by sea have a longer shelf life.
When selecting your supplier, carry out your due diligence to ensure that you choose reputable and creditworthy suppliers that will supply your business with quality products in a timely manner.
There are various ways to find suppliers from recommendations to online directories such as Alibaba, Chambers of Commerce and trade press. Once you have narrowed down a small list of potential suppliers, contact them for price quotations and seek to establish whether they can provide you with products that meet your quality specifications within the period of time you require them.
There are several companies such as Experian which can provide you with credit checks for your suppliers. Assessing suppliers’ credibility at this stage will assist you in choosing the right supplier with sufficient cash flow to meet your product demands now and in the near future.
Considering your delivery terms and shipping options early is very important and will help you to avoid unnecessary costs and delays.
How we can help
Serenity Law LLP has a dedicated team of commercial specialists who are ready to help with supply chain issues. If you would like to obtain any advice on how to find and/or deal with suppliers, please do not hesitate to contact our commercial team specialists on 0800 019 7773.