Direct import – What it is, definition and concept

Direct import is the acquisition of direct products from a foreign supplier, without the participation of intermediaries.

It also tends to refer to a type of import between foreign retailers and manufacturers. These imports tend to be common for large companies with their own distribution channels.

On the other hand, connectivity changed the dynamics from requiring many contacts to execute it to being within the reach of almost any organization.

Direct import features

Carrying out any foreign trade process requires knowledge of technical information. For example, classification of the merchandise, rates and tariffs, means of transport, storage, among others.

In this sense, the companies that carry out this type of import have a legal department specialized in foreign trade. Therefore, it is not the most recommended method for small companies, either because they are recently created or they are not scalable.

In these types of negotiations, there tends to be trust between the parties involved. That is, there is a prior relationship between importer and exporter or, failing that, the rapprochement occurs by recommendation. This is very important because the participation of specialized professionals is recommended to carry out the procedures required in these processes.

Direct import and ecommerce

The development of ecommerce has allowed the end consumer to have direct communication with manufacturers thousands of miles away.

Therefore, this is also classified as a direct import despite the need to hire a transfer company and the third-party platform. In this sense, the contract with the distributor depends on the buyer.

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Advantage

Some of the advantages of direct import are:

  • The importer is in control of the merchandise transportation process. Depending on the INCOTERM contract, this transfer includes national and international territory.
  • Likewise, logistics, licenses and insurance payment could be at your charge.
  • The costs associated with the work of intermediaries are reduced. For example, distributors or agents.
  • It is easier to monitor the product distribution process.
  • Direct communication with the exporter facilitates decision-making and the modification of the conditions of the agreement.
  • It opens the possibility of creating your own distribution channels for new products in the local market.

Disadvantages

For its part, some of the disadvantages of direct import can be listed as follows:

  • The risk of damage or deterioration of the merchandise is greater in case of inexperience in the transfer of merchandise. Meanwhile, the risk of loss is lower.
  • It requires investment in professionals specialized in foreign trade work.
  • Return costs tend to be higher. When there are intermediaries, they take care of the returns. Therefore, by having a larger network, travel costs decrease.

In conclusion, direct import is the process by which a customer acquires a merchandise from a supplier that is outside his country. In this type of import, customer and supplier close the operation without the participation of any intermediary.

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