Importers license for reselling

Isis

I'm friends with a guy in the UK who just launched his own line of specialized sports equipment. We've been talking for quite a while now about importing his stuff to SA.

I'm having a hard time finding information on importing goods for distribution. I've phoned SARS but I've gotten two different replies from them. The first guy told me sporting goods are exempt from VAT and duties, which would seem a bit ridiculous. The second guy told me I'll have to pay both VAT and duties. I'm confused now ???

I know I'll have to apply for an importers license as I'll be reselling the goods here. What I don't know (and can't seem to find out) is what types of duties etc I'll have to pay. If I end up paying both VAT and 40% duty + the shipping, it might turn out to be a little less than economically feasible. Luckily I already own a CC, so that's one less thing to worry about.

Can anyone point me in the right direction please?

Forum members will get discounts of course ?

ratrap

Isis

My advise is to find yourself a good shipping agent. They will know and will also be invaluable once you start importing.

StephenG

as ratrap says - you need the services of a freight forwarder who will have all the codes and stuff to fill our your bill of entry documents and warfage etc..

there are A LOT of costs involved in shipping.. not just VAT and possible duties, but on the actual shipping side of things.. the invoice can easily include up to 20 different tariff items.

WantzChas

The best way to get things done with SARS is to make an appointment and go and see a counsultant. You'll likely get an appointment within a week.

When you import you start off with import duties, customs, clearance fees and the like and then on top of that, you add another 14% of VAT. Go on the SARS website and try to educate yourself as much as possible so you at least know exactly what to ask them.

Here's a good place to start,
http://www.sars.gov.za/home.asp?pid=2630

EDIT: It will help if you quickly go through Schedule 1/Part 1.

prince

Remember the Vat you pay on importing the stuff is claimed against the Vat you are going to charge your customers.

Eg, if your shipping, cost of goods, duties etc is R100 and you pay R14 to SARS (or the shipping agent who pays sars) this is your "input vat".

You then sell the stuff at a discount to forumites at R300 and charge R42 vat (your output Vat).

You pay SARS R28 (42 we paid you -14 you paid on import). So you only charge the next person 14% on your markup or value added.

Assuming you are going to be vat registered otherwise you pay 14% and end of story.

There will be different dutiable amounts on different items. Eg shoes are quite high, clothing too but other thing could be a much lower percentage. Talk to a reutable clearing agent and accountant. It could be expensive if you get the wrong advice.

Good luck.

Isis

I'm actually quite weary of making use of clearing agents as the items I will be importing will be of relatively low volume. The majority of these will be cricket bats; he manufactures high end cricket bats. I'll probably be importing about 20-30 bats a month max. I'm just scared that I'll be inflating the costs too much and it will become impossible to resell them here.

StephenG

Isis wrote: I'm actually quite weary of making use of clearing agents as the items I will be importing will be of relatively low volume. The majority of these will be cricket bats; he manufactures high end cricket bats. I'll probably be importing about 20-30 bats a month max. I'm just scared that I'll be inflating the costs too much and it will become impossible to resell them here.

i gotta say, in my mind - 20 - 30 month is a waste of your time and your mates energy..
where do you want to distribute these items from?? sports stores? if a store carried at least 5 bats - thats 4 - 7 sports stores only... I got moe than that many sports stores within walking distance of my house...

now if you bringing in 200 - 300 a month, which dramatically reduces the shipping price per bat, you will have a decent number of bats to supply and not have shipping inflate the price too much.

Isis

These aren't the types of bats you'll find in normal sports stores. Those sold by normal retail sport stores are pretty much rubbish for weekend cricketers. The one's I'll be importing are custom made bats that will set you back about R4000+ for the cheapest bat. I know how hard it is to find decent bats in South Africa if you are not an endorsed player. So I'll probably cater to professional to semi-professional cricketer players.

StephenG

Isis wrote: I know how hard it is to find decent bats in South Africa if you are not an endorsed player. So I'll probably cater to professional to semi-professional cricketer players.

pro and semi-pros are already being endorsed at that level, and if they are not, then they simply remove any branding from the bat they had to pay for. so i dont see that market being much of an outlet for you.

Bob-Dubery

Isis wrote: These aren't the types of bats you'll find in normal sports stores. Those sold by normal retail sport stores are pretty much rubbish for weekend cricketers. The one's I'll be importing are custom made bats that will set you back about R4000+ for the cheapest bat. I know how hard it is to find decent bats in South Africa if you are not an endorsed player. So I'll probably cater to professional to semi-professional cricketer players.

I take it that this is a brand of bat that is not distributed at all in this country. So you're going to have to put some effort into marketing. You'll also need to convince the retail outlets - if you're not going to try to bypass them completely - that you can provide support and that you can ship them the quantities they want when they want them. You'll also have to build brand awareness.

I think you're underestimating the amount of time and money you're going to have to sink into this. Getting the bats into the country is only the first hurdle.

It's not impossible, it's a similar challenge to bringing a new (to SA) boutique brand of guitar into the country. It can be done, but it requires time, energy and money.