10 essential facts about importing from Mexico.
Importation is the legal entry of goods into one country from another. Mexico has one of the highest importation rates around the world. In 2018, 451.3 billion dollars of goods were imported worldwide, showing an increase of 10.3% since 2013, and an increase of 9.6% from 2016 to 2018. In recent years, Mexico has become one of the markets with most potential and the changes it is experiencing are exponential. If you are already thinking about investing, please consider these 10 points that you need to know about importing from Mexico.
Why import from Mexico?
The commercial exchange between countries is a way to bring uniformity to businesses. In order for Mexico to be competitive with its products in the global market, one of its strategic advantages is that it has a high number of trade agreements in place, and it is also an active participant in the most important multinational trade organizations worldwide.
If you want to import from Mexico, take a look at these 10 points:
- Choosing a supplier
Identify the product that you want to import. One of the most effective ways to find suppliers is by attending specialized trade fairs and finding out about the programs on offer so that you can do in-depth research about the product and understand all its characteristics. Mexico specializes in many areas and uses special processes that do not exist in other parts of the world. Choosing a Mexican product will always be beneficial for your business.
Certain types of documentation are required. Mexico requires import and export documentation that includes a completed permit form or license (“pedimento”) for all import or export orders. This document must be accompanied by a commercial invoice, a bill of lading, documents that show the guarantee of additional tariff payments for undervalued goods and documents that show the safety and efficiency compliance of the Mexican product. Below we explain each document in more detail:
– Commercial invoice, issued by the supplier, with the company name, address, product description, price and sales terms and conditions.
– Packing list, specifying the shipping contents, number of items, the weight per unit and total weight, the dimensions of each item and references.
– Bill of lading, issued by the shipping agent. The supplier sends it when the payment has been completed so that the shipping agent can deliver the goods.
– Certificate of origin, issued as a form and more can be required depending on the type of product being imported, in this case footwear.
– Certificate of weight or volume, issued by the company authorized in the Ministry of Finance and Public Credit.
- Purchasing process
Once you know what you want to purchase and from whom, the negotiation process begins. This could be a long or short process, depending on factors such as the type of product and the country you are from or where you want to import. It is a good idea to request some samples first; take into account that you must make an advance payment for this. This will prevent issues at the end of the importation process.
- Establish the Incoterms (International Commercial Terms)
These are three-letter terms, that reflect the acceptance standards voluntarily stipulated by both parties, for example FOB (Free on Board) or CFR (Cost and Freight). It is important to always keep track of your inventory and to take into account that in FOB, it includes the price of the goods up to when they are loaded onto the ship, but it does not include the cost of transport, for which you must get a quote from a shipping agent if necessary. When calculating the final import, you must take into account the tax payable for the goods.
- Know your market
Once you have decided on the type of import business to carry out and you have calculated your startup costs, it is time to narrow down your market focus by thinking about:
- Clients that you want to deal with
- Areas of the world you want to send to
- Types of goods you will offer
Take your time to carry out in-depth research. The extra time you will spend finding profitable niches will benefit you in the long-term.
- Prevent risks
*Review the shipping logistics well; even if your supplier guarantees that everything will leave its port and arrive at your destination on time, keep track and monitor shipments yourself.
*Mexico is a country rich in tastes and culture, so you will not have any problems establishing it as a market; it will adapt to your requirements.
- Consult a professional
The processes take time; it is best to consult a trade professional. The textile sector, clothing and footwear are some of the fastest-growth industries. If you are interested in importing Mexican footwear, programs like Shoes from Mexico will accompany you through the process.
- Mexico’s ports facilitate importation
Ports are the main communication channels for importation. There are 330 ports in Mexico, from which shipping to United States takes 2 or 3 days, one week to Latin America and around 10 days to Europe.
- Know the principal importation partners of Mexico
According to Mexico’s importation statistics, the highest number of imported goods was to United States; Mexico’s 5 strategic partners are currently China, Japan, Germany, South Korea and the United States. This guarantees that the alliances with these countries comply with international requirements.
- Financing importation
You must have good financing in place. You may reach an agreement with a supplier for payments, with facilities or instalments; this is a way to encourage loyalty and trust in relation to business from both sides. Take into account that for each transaction, an advance payment of 20 to 40% of the total invoice should be requested.
These are the most important steps to consider. Each brand works differently. The difference is in the commercial advantages that a country like Mexico can offer to invest.