Chapter 4 - Importing Hacks 101

The two founders had their sample. To celebrate their first product shoot, they went to Mia Lounge; this place has shisha, fine Lebanese cuisine, and good ambiance. While the lads were in their paradise little did they know what was happening to the sample shirt in Abbas' car (complete plot twist). 

After a few hours of chatting, and drinking of mocktails, they walked out into a dimly lit London street. Abbas' car was fine, it was just missing a DSLR camera, and THE F***ING SAMPLE SHIRT! - baring in mind these items were in the boot. 

The whole incident is still a mystery: how did they open the boot without damaging the car?

The silver lining was that the thieves found it worthwhile to steal the shirt.

Till this day, Abbas is still complaining as to why they are not marketing the product for us (If you are reading this, please rep for us... it's the least you could do).

Next day the founders had to request for another sample shirt from Mr Faruk. This shirt was required for a product shoot, and as a memento (like how American pizzeria's frame their first dollar), though now its not quite the same. 

Satisfied with the original and second samples, the founders agreed to move on to the next phase: mass production.

Apparel Axis LLC and Rose Noir Clothing agreed on payment terms of 50% up front and 50% after receiving the goods; and were issued a commercial invoice.

Free On Board (FOB) - 'Free on board is a trade term that indicates whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping.'

In our case within the agreed price of the goods, the vendor (i.e. Apparel Axis LLC) carried the liability during transportation as well as being responsible for clearing customs and all charges related to transportation.

The founders commenced their launch campaign based on the provisional dates provided my Mr Faruk.

Now the founders were in new territory: transportation / logistics.

There are three methods of international shipment: air freight, sea freight or courier.

At the time Mr Faruk was acting as a consultant, and offered the founders air or sea freight option,

The international shipment will offer you a more information. Now to cut the long story short, it depends on weight and volume.

Schedule: 3 weeks of production, and rest for transportation (1 - 2 weeks).

Due to foreseen or unforeseen circumstances on Mr Faruk's end the delivery date of the shirts were slipping so the founders had to request for the goods to not go via EXW.

Ex Works - 'An international trade term that describes when a seller makes a product available at a designated location, and the buyer of the product must cover the transport costs.'

EXW would have been a location of Mr Faruk's choosing, but Mr Faruk was able to change the delivery address of the cartons (boxes) of shirts to be delivered to Adrish's house, risk mitigated (phew). Now to make things a tad more simple, we have provided an image below for reference: 

Image result for fob import

On the day of the delivery of cartons, Adrish received a call from a third party handler from Stanstead Airport:

"We have cartons of shipment for Rose Noir Clothing, your sum of import tax, handing fee, and VAT is £**** so please pay and we will deliver the products to you."

Confused Adrish rang Mr Faruk.

Adrish (slightly riled): Hello Alam, I just got a call from a third party handler. They said I have to pay substantial import tax, handling fee, and VAT. I thought we agreed on a piece price to cover for all necessary transportation costs.

Mr Faruk (in gentle voice): Don't worry, just pay the money, and I will reimburse you. The price agreed has all the fees included.

Adrish gave the third party handler Mr Faruk's Economic Operator Registration and Identification Number (EORI) number for tax reasons (at the time Rose Noir Clothing was turning over less than £85k per annum hence, RN was not VAT registered).

That is how Rose Noir Clothing received its first batch of shirts from a far way country called China.

I much prefer Ron Swanson's view on trade:

The mustachioed director of the Parks and Recreation department of Pawnee, Indiana, Swanson (portrayed by Nick Offerman) is a libertarian who wishes the government didn't exist—and even encourages his employees to slack off.

“Whatever happened to “Hey, I have some apples, would you like to buy them?” “Yes, thank you!” That’s as complicated as it should be to open a business in this country.”