How to Select an Auckland Customs Broker – Avoid THESE Costs
11-minute read (23-minute watch)
Max: If you think about it, when you import two pallets or even a full container, you’re going to pay at least anywhere between NZD 1,000 to 5,000 of freight to ship the goods say from China to New Zealand.
Alex: So why we think that it’s so important not just to choose right freight forwarder but also to choose the right customs broker?
Because you will pay a lot of money to these guys. And you need to be 100% sure that you’re paying the right amount and to the right people
That’s why there are certain things that you can check when you’re selecting your customs broker.
Watch full YouTube episode below
Max: The reason I started to talk about money because people have to realise that customs clearance, it’s not just $100. It could be a lot more if you take into account taxes, freight, and other stuff.
So freight, you can pay anywhere– if you send two pallets could be $1,000; if it’s a full container, it could be 3 to 5 thousand dollars. And then your taxes, if it’s $10,000 of goods, 15% in GST; that’s at least another 1,500 bucks.
Alex: And if there’s a duty, there’s another 5 to 10 percent. And a good customs broker can find a way to legally not to pay the duty or will explain you exactly why you have to pay. You’re going to be sure that you’re not just a tick in their revenue.
Max: On their balance sheet.
Alex: You need to make sure that you matter, that customs brokers see and understand what kind of product you bring into the country, and what are the rules and what are the costs around it.
#1 CHECK GOVERNMENT WEBSITES
Max: The first way to check and select your customs broker is to go to the company’s office website. This is a government website.
Alex: So basically to make sure that they exist.
Max: You want to make sure that it’s not one-man band sitting at home, but it’s a registered company.
Alex: Why not? I mean, why is it so bad that it’s only one man band?
Max: Well, that’s my personal view. I think it’s important if you pay someone $5,000, and I’d like to be confident that they’ve got this person; that if he gets sick, or she gets away.
If something happens, an accident, they have a backup. So they have to have a team. And yeah, it gives me more confidence if it’s a registered company, they’re based locally, close to you, so you can visit their office if you want to.
And coming back to the company’s office. If they are registered on the company’s website, you can check if this company is bankrupt or not. Because this company’s office will display if the company is liquidated or is under the process of being liquidated.
Alex: And how long did it be in operations for? Right? It will have a date, they start it. So you don’t want to deal with a company which actually only in its first or second year of operation.
You want to choose someone who’s more experienced. I would probably go for five years and you would probably go in for 10 years of operations, right?
Max: Eight years is ideal for me.
Alex: Our company fits your requirements. So we’re good. What else can you check to see if the company is legit?
Max: By the way, if you’ve just joined us feel free to ask any questions in the comments on YouTube. If you’ve got any personal tips or stories how did you select your customs broker?
Or did you have any problems or issues, mistakes that you would like to share with us and maybe other people to avoid, please do that now.
Alex: So how else can you check that a company that you are about to select to clear your customs is a legit company? Is there any other way?
Max: What do you mean? Give me an example?
Alex: Apart from the companies office. How else can you check?
Max: Well, I can visit their office.
Alex: maybe Google them. See if there’s any negative publicity around them? Because chances are, they will be in some of the local papers. For example, we had good reasons for that one. We’ve been in the papers for what?
Maybe five or six times already. So if you Google us, you’ll find a lot of publicity about us and it will add confidence or in some companies, you will lose the confidence in those companies.
Max: Let’s not talk about a recent news article about the company called Online Logistics. And it’s not just one example, there were several examples where people were doing bad stuff and they went to New Zealand Herald, and they went public.
They told the story. Well, the company took the money to import a luxury car. A BMW and they paid to a customs broker, $5,000 in taxes and shipping fees and then they went bankrupt.
And it was all over the news, the guy, if he would do his proper due diligence, he wouldn’t be in that situation.
Alex: So the guys just lost their money?
Max: Unfortunately, he did. I mean, he can probably chase the directors. But I don’t think he will be successful.
Alex: Now he needs to clear his car again because he has not just lost his $5,000. He needs to clear the car again because it’s never been cleared. The company just pocketed the money and used it for something else, while being liquidated.
It could have been easily avoided by checking the company’s office website. Or checking the internet.
#2 SEARCH REVIEWS ON SOCIAL MEDIA
Max: Yeah. And the second point we have lightly touched that’s in the news on Google or social media, especially Facebook. You would be surprised how many people leave all sorts of feedback. It’s not just positive but obviously, it’s much easier for people to share their negative feedbacks.
And even in our case, one person left feedback saying that he was upset that it took us more than half an hour to come back to this person.
Alex: Google reviews is a great tool to check the feedback for the company. Not just for if they exist or not but there will be a good indication as well. So if the company has no reviews, whatsoever, it means that they’re probably not doing their job right.
Max: Or it’s a new company.
Alex: And if they have a lot of reviews and these are lots of negative reviews you can make your opinion about them and decide for yourself if you want to work with them or not. So it’s a great tool to assess the level of their service, as well.
Max: I would even take it to the next step. If I would engage a service provider and they want me to pay them 5 or 10 thousand dollars in taxes or freight services, I would copy their company website and then post it in some social groups.
For example, Facebook, there are plenty of groups where you have 10,000 members, and surely at least some of them would raise any possible concerns.
Alex: Do you have any examples of those groups?
Max: Well, there would be a lot of these migrant groups, business groups. Just type your country name, where you’re from and then you find a local group.
Alex: There’s a Facebook group of importers and exporters in New Zealand and Auckland Entrepreneurs. So chances are lots of those people will either be able to help you to choose the right customs broker or will give you some feedback about them.
#3 IN-HOUSE CUSTOMS BROKER
Max: Another very important and little-known fact; that a lot of freight forwarding companies and customs brokers in New Zealand they don’t employ their own customs broker. They outsource the service.
Some companies outsource customs clearance service to us, even big companies.
And the reason it’s important for you, as the exporter or importer, because if you work with a company that employs their own customs broker the chances are that you will get a faster reply and you can personally talk to this broker.
You can engage them if you’ve got any urgent shipments, after hours.
Alex: And also, remember if there’s a middleman involved then they will have to charge extra to get some money out of it, as well. So you will be paying a bit more.
Max: 100%. Any other benefits working with a company that employs a customs broker?
Alex: You can talk to a broker directly and one of the other big issues is that many customs brokers, they do not understand the product they’re actually clearing. I’ve been working with a lot of customs brokers in other companies and I could see that they do their work just as a conveyor.
It’s like they’re just doing the same thing again just not in going into the details, they’re just using the pre-registered, pre-entered– the easiest, the fastest — they can find to clear the goods, and it’s not always the right.
And a lot of customs brokers do that and when you meet your customs broker, and actually, you need to do it.
He will explain to you his concerns about the product and you can ask all the right questions: “Why do I have to pay the duty?” Or, “Why do I not have to pay the duty?” Or, “Why do I have to clear it through MPI?”
Is there a permit for the import? What kind of treatment requirements? They might help you with all this useful information and you will know what you’re getting yourself into.
Especially when you are new to the business and you bring some other new product, which you’ve never imported before. Because it could be lots and lots of expensive and nasty surprises you discover when the goods are here in New Zealand.
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So you don’t miss the next awesome video or interviews with interesting people.
If you’ve got any other tips feel free to post them in the YouTube comments.
If you get a quote from a customs broker or any freight forwarding company, the quote that you see in the email, in many cases is not going to be your final amount. Because, chances are that if you are a first-time importer, you are a high risk for the government.
Therefore, you will have a bigger chance to be inspected by the government. Whether it’s the customs or MPI biosecurity.
Alex: Even though MPI doesn’t really judge you on, usually, whether you’re first or not. Customs do. But MPI will assess the risk of the product.
Max: So what I’m saying is, you should allow, I would say, at least a couple of hundred dollars just to be on the safe side. And if it doesn’t happen then, hey, it’s just a bonus for you. I think it’s how you run your business and you should allow some budget extra for government inspections.
Alex: And that’s where again a good customs broker can help you. So you discuss it with him or her. “Look, I’m going to import that piece of wood. What’s going to be the cost for me to bring it?
And a customs broker will explain it to you and will tell you that, “Okay, there’s a chance of MPI clearance, but it has to be treated; and preferably it has to be treated overseas because of the cost, because of the requirements.
And if you bring it here and it’s not treated; then you’ll have to pay New Zealand price for the treatment and often 2 times more than in the country of export.
Max: I’ve got an interesting question from Peter Baker. Peter’s asking what languages does your team talk, aside from English of course?
Alex: We talk Russian, and one of our team members can speak Fijian as well.
Max: So that’s a bonus?
Max: If you trade with China or trade with any other country, and it’s important for you, and it’s easier for you to communicate in your native language; you might want to ask this company if they’ve got a customs broker who speaks your language.
Doesn’t have to be customs broker, could be any team member that speaks your native language. Like when you go to a bank, right? So when you go to a bank, sometimes it’s so confusing to understand all this different paperwork.
And if it’s important to you to communicate in your own language, and if it’s not English; then definitely go for it. And I think there’s plenty of customs brokers here in New Zealand who employ a diverse range of brokers and they all speak any sort of language you can imagine.
#4 DO THEY HAVE RELEVANT EXPERIENCE
Alex: I can’t stress enough how important is to talk to a customs broker because sometimes there are certain types of product that require a more deep, a special knowledge, for example, firearms.
What firearms are you allowed to bring in country? What firearms are you not? What kind of documents do you need to have to clear the goods?
So my other, next advice would be to check if a customs broker is experienced in importing and also in clearing your type of product, exactly your type of product.
And a good thing would be to ask him or her then if they also have other clients who are in similar industries.
We’ll be honest, for example, we don’t deal with live pets. And I will be very happy to pass you onto a person who is in a different company, but who’s good at importing live pets into New Zealand.
And I wouldn’t be taking live pets myself because I just lack experience in that. So our other next advice would be, check that your customs broker is experienced with clearing exactly your type of product.
Max: If you’re a regular importer, and you want to upgrade, you want to find another customs broker, or you want to see what’s out there, maybe you want to shop around, see what kind of prices you can get out there. You can go to this freight forwarding company and say, “Hey, I import on a regular basis, and what can you do?”
If you’re a new client, and in our case, we offer new clients that have been importing say for a year or more on a regular basis– we offer them the first customs clearance for free because obviously, we’re so confident in our service that we know you will come back to us.
So we’re happy to do the first customs clearance for free. If you mention this talk in the email, I’ll make sure you get the first customs clearance for free. How about that?
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