Q: I run a small clothing and accessory retailer – as you can imagine, the past few years have been a struggle. I still manage to visit some friends and family who now live in Eastern Europe, though – and every time I go, I’m amazed at how cheap retail prices are.
On my last visit to Poland, I checked out a wholesaler to see what kind of value I could get – I wasn’t disappointed. I found I could save a huge amount if I bought through them, cutting my prices significantly and still enjoy a higher margin. It might be the shot in the arm that my business needs.
I checked out a couple of delivery companies and, in all honesty, I think I’m better off using my van. The one complication is that I’ve never done anything related to importing goods before. Will I have to pay duty on the goods I bring in? What kind of procedure do I follow? And am I missing some important issue, because it looks like a no-brainer from my perspective?
A: First, the good news – importing within the EU is remarkably simple. Traders enjoy free movement of goods without taxes or import clearance between EU member companies – so, unless you’re branching into alcohol or tobacco, you won’t need to worry about duty. You will still have to account for the transaction if you are a VAT registered trader.
That said, you should be extremely sure about the wholesaler you are dealing with. While tax isn’t a headache within the EU, Revenue still comes down like a tonne of bricks on peddlers of counterfeit or pirated goods. If you’re selling brand name products, make sure they’re legitimate – or, to be safer still, consider sticking to generic items, at least until you’ve worked with the supplier for a while.
More generally, while you’re understandably excited about the savings you can make by this method, ensure that you really account for the cost of sourcing and importing the goods. It’s all very well to say that you visit Eastern Europe anyway, but your trips will likely become more frequent if this pans out. So, factor in the cost of travel – and the cost of paying someone to mind the shop while you’re sourcing goods abroad – when you’re making your final decision.