Indirect import – What it is, definition and concept

Indirect import is the purchase of merchandise from a foreign supplier through intermediaries.

Companies that sell goods find themselves in the situation that some of these goods are not produced in the country in which they operate and must import them. This import can be done both directly and indirectly. Likewise, in indirect importation, the client hires the service of an intermediary company to take care of customs processes.

Indirect import features

Indirect import, as well as export, is ideal for small businesses. In this sense, these organizations can acquire merchandise in international markets without the need to know in detail the customs processes.

Depending on the economic activity of the intermediary and the legislation, the import is carried out on behalf of the client or the intermediary. For example, if the shipment is owned by the customer in its entirety or if it is destined for several customers.

Stages of importation and intermediation

In principle, the stages of the import process are listed:

The first stage can be in charge of the buyer or intermediary. In the first case, it can be generated when you require a product with very specific characteristics. However, in the second case it is for less demanding customers or with more generic products.

The second stage is generally covered by the buyer. It is rare for intermediaries to provide financing as an addition to their services.

For its part, the commercial agreement may be on behalf of the client or, failing that, on behalf of the intermediary. In this case, it will largely depend on whether it is a specific import or has different recipients.

See also  Gregarious - What is, definition and concept | 2022

Fourth, the conditions of carriage are the sole responsibility of the intermediary. Likewise, stage five is managed purely by the intermediary and the client may be required to provide documentation.

Finally, the intermediary delivers the merchandise to his client in the best possible conditions.

Advantage

Some of the advantages of indirect import are the following:

  • It allows the importation of foreign merchandise for companies without specialized human capital in foreign trade. Therefore, the service of intermediaries can also include advice on better markets.
  • Likewise, the buyer does not need a fleet of vehicles for the transfer since the intermediary can deliver it where the importer requires it.
  • Given these advantages, the buyer does not need to invest in specialized human capital in this area.
  • The risks associated with damages due to the transfer of the merchandise to the buyer are eliminated.

Disadvantages

On the other hand, the disadvantages of this type of import are the following:

  • The intermediary service increases the cost of the merchandise. Therefore, these costs are displaced to the final price of the product.
  • The buyer tends to ignore the dynamics of the country of origin of the merchandise.

In conclusion, indirect import is the process of purchasing merchandise from a company located in a country other than that of the customer. In this type of import, an intermediary participates who facilitates the execution of the operation. It can offer transportation services, customs management, etc.

Leave a Comment