I was wondering if it’s possible to start a business in South Africa importing used vehicles from the UK?
South Africans are not permitted to import second hand cars for commercial resale purposes in the Prohibited and Restricted Goods Index.
Only SA citizens who have lived abroad and owned a car(s) while outside the country may import it/them on their return to South Africa. They are then required by law to keep the vehicle(s) for a period of time before they may sell it/them.
South African companies that are currently involved in the import of second hand cars are selling them directly into other African countries which do not have local industry protection regulations such as we have. The cars are delivered directly to the destination country from their source, i.e. they do not enter South Africa at all.
A list of prohibited/restricted goods can be accessed on the website of the International Trade Administration Commission (ITAC), a division of the Department of Trade & Industry.
Want To Start An Import Business – Here Are The Importing Terms And Documents Involved
An informative guide to understanding the terms, tariffs and documents involved with importing.
The following sections will be able to assist you in setting up your importing business:
How do I know whether my product is export-ready?
Your product has to tick several boxes before you can consider exporting it.
I want to start exporting my product into Africa. I’ve made contact with some buyers in Nigeria and they’re interested in signing a contract. How do I make sure that my product is ready for export?
Whether or not your product is export ready depends on the buyer’s needs, your product’s ability to meet those needs, and how your product will shape up against international competition.
In order to determine export readiness, you need to research the following:
- Your target market
- Any potential competitors
- The buyers themselves.
Common factors that would affect the exportability of a product include:
Unless there is a market for it, your product won’t sell. Look at your domestic market for an indication. If you are meeting a need locally, you should be able to meet the same need internationally.
This, however, is not the only consideration. International markets are usually further away, meaning that you will have to add transport costs, and will most probably have to include the cost of import duties and taxes in the final delivery price.
2. Product adaptability
A key quality of an export product is its ability to adapt to suit an international market. Cultural differences between countries could affect the use or acceptability of a product in each country. A product name could have a totally different and possibly derogatory meaning in another language and might have to be changed for that market.
3. Cost structure
The cost structure of the product will obviously impact on its competitiveness. For example, depending on the cost of materials, and whether or not those materials can be locally sourced, international transport costs and customs duties in the importing country will collectively determine the final delivery price.
The more you know about your competitor’s product, the better your position when determining your own chances of succeeding. Price is an important factor in determining success, but not the only way to compete. You can also differentiate your product by highlighting some of its unique selling points.
5. Product complexity
The greater the complexity of your product, the more important the strength of your business. Products that need a high level of support or installation assistance will need a strong local network with trained staff to support them. The investment in setting up a sales and support structure in the importing country could be prohibitive, making it unviable to export the product.
For more information, read more here.
How do I verify foreign suppliers?
Do your homework to reduce the likelihood that you’ll end up out of pocket.
I run a small import business and want to find some new suppliers in the Far East. How do I establish their credibility from South Africa?
It’s essential to establish that any new suppliers that you intend to do business with are credible and reliable. Here are some ways that you can check up on their credentials:
- Use internet trading forums such as that on eBay to establish whether the supplier has a history of being trustworthy and dependable
- Do online research to find out more about the company, including how long it’s been in business for and how long it’s had the product line that you’re interested in.
- What does their website look like? Has it been professionally designed and kept up to date? Does it have proper contact details including a physical address and telephone number?
- If you can’t afford to visit the supplier, contact them by phone or email and discuss your requirements. Find out about delivery times, payment methods and ability to deliver what you need, when you need it. These discussions should give you a feeling for how professional the supplier is in conducting its business.
- Ask for references and check them.
- You can consider using the services of a reputable inspection agency to make absolutely certain that the supplier is trustworthy.
- Obviously a site visit is the number one way of establishing a supplier’s credibility.
See the full article here.