IMPORTING PORTFOLIO
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<strong>IMPORTING</strong> <strong>PORTFOLIO</strong> <br />
<br />
ASHLEY DOUGLAS<br />
Applications of International Importing<br />
using procurement and supply chain<br />
methods.
Table of Contents <br />
COMPETITIVE STORE SURVEY <br />
COUNTRY PROFILE <br />
COUNTRY ANALYSIS <br />
BUSINESS PROTOCOL <br />
<strong>IMPORTING</strong> TRADE AGREEMENTS <br />
CLASSIFYING THE PRODUCT - HARMONIZED TARIFF SCHEDULE <br />
THE COST SHEET <br />
PRO FORMA INVOICE <br />
SHIPPING ROUTES <br />
PACKING LIST <br />
COMMERCIAL INVOICE <br />
PG 4. <br />
PG. 7 <br />
PG. 10 <br />
PG. 13 <br />
PG. 16 <br />
PG. 19 <br />
PG. 20 <br />
PG. 21 <br />
PG. 22 <br />
PG. 23 <br />
PG. 24 <br />
<br />
2
Competitive Store Survey<br />
Brick and Mortar Store: JC Penney-Briarwood Mall<br />
1. Evaluate the exterior of the store:<br />
The parking lot is maintained. It could use a fresh coat of paint on the lines.<br />
Lighting is the parking lot is sufficient for customers to see at night. All that’s<br />
displayed on the exterior of the building is the name of the department store<br />
and a few signs in the glass doors with their new logo and sales promotions.<br />
There are no windows for displays. The exterior is very bland and basic.<br />
2. Evaluate the interior of store:<br />
Upon entering the store there is a cash wrap and mannequins and displays to<br />
the left and right. Departments and brand labels are separated with distinct<br />
signage. From my previous experience in the store I can noticeably see the<br />
changes and renovations the store has made. The store is better organized and<br />
has various amounts of new updated displays and fixtures. They are a mixture<br />
of all different types of materials and textures to accommodate the brand and<br />
style that it is displaying. The new look gives the store a more modern and<br />
upscale feel but their price range has not changed. The floor is still tiled<br />
although in certain designer brands they have rugs and carpeting. They have<br />
moved their signage to hang from the ceiling over the deserved racks instead of<br />
toppers on the racks. The store is very well maintained and the merchandise<br />
looks of great quality. The store has a more inviting feel with a lot more seating<br />
areas and bright colors. Soft music was playing although no smell of any sort.<br />
The location of the customer service and other amenities is still the same.<br />
3. Pricing<br />
The pricing of the brick and mortar is within the same price range as the online<br />
store. JC Penney’s price scale is $17- $30 regular price while the online store is<br />
$19.50 or $27.95 regular price. There is a slight difference in the number of<br />
choices of the price within the range. My plan for Perry’s is to sell at the lower<br />
end of this price scale between $15 and $20. JC Penney offers a variety of<br />
brands including our top seller of Oshkosh while the on-line store sells private<br />
label only.<br />
4. Classifications
JC Penney offers boy’s size 4-7x in slim, boot cut, skinny, super skinny, relaxed,<br />
straight-leg, and husky. For the boys department they cover just about every<br />
style of denim except for utility.<br />
5. Vendors<br />
1) Arizona<br />
2) Levi<br />
3) Okie Dokie<br />
4) Oshkosh<br />
5) Vans<br />
There are no unique vendors or private label for this department.<br />
6. Explain what you like about these stores and how you can improve your<br />
denim classification.<br />
I like that the store offers different brand for the customer to choose from<br />
because not all brands fit the same. Also they price range is very nice, they give<br />
the customer more options to choose from depending on their budget. They<br />
could improve their denim selection by adding even more different brands and<br />
a utility style.<br />
7. Explain what you do not like about these stores and how you can improve<br />
your department.<br />
The only thing I would improve upon is displaying the product more so that<br />
the customer can see the look of the jeans on a human form.<br />
Online Store – Children’s Place<br />
1. Evaluate the home page & Departments Access<br />
The home page for children’s place displays their recent sale they have going<br />
on. Also the text is in bright bold print. All the departments are labeled across<br />
the top, placing the mouse over the department you can easily see the subclassifications<br />
of each department to click on. It is divided into girl (4-14), baby<br />
girl (6m-5T), boy (4-14), baby boy (6m-5T), newborns (0-24m), shoes, accessories<br />
and clearance.<br />
2. Evaluate the department, graphics, and merchandise.<br />
Under the departments on the home page, it is then split into categories of type<br />
of clothing (i.e. Outfits, graphic tees, short sleeve tops, long sleeve tops,<br />
<br />
4
sweaters, active wear, denim, pants, shorts, outerwear, jackets & vests, school<br />
uniforms, special sizes, sleep & underwear, accessories, shoes, clearance) The<br />
home page for the departments displays all the classifications along the side<br />
and outfit selections and top sellers from top classification are displayed with a<br />
picture of the clothes. The pictures of the clothes are flats although they have a<br />
beige background to contrast against the white main background. All denim is<br />
displayed on a human figure to see the way the pants fit. They are also<br />
displayed with shoes. If you choose a pair a very detailed description displayed<br />
with multiple angles of the pants to look at as well as washes.<br />
3. Pricing<br />
The pricing of the on-line store is within the same price range as the brick and<br />
mortar store. Children’s Place price scale is $19.50 or $27.95 regular price<br />
while the brick and mortar store is $17- $30 regular price. There are not very<br />
many options when it comes to pricing. My plan for Perry’s is to sell at the<br />
lower end of this price scale between $15 and $20. Children’s Place does not<br />
offer a variety of brands it is private label only.<br />
3. Classifications<br />
The different classifications for the denim department are skinny, straight, boot<br />
cut, utility, slim denim fit, and husky denim fit. They have every type of style<br />
denim available for the boys department.<br />
5. Vendors<br />
Children’s Place only carries their own private label. This can be a limitation on<br />
their offerings and fit.<br />
6. Explain what you like about these stores and how you can improve your<br />
denim classification.<br />
I really like their price range. It is very affordable and the way they display their<br />
clothes make them appeal of very high quality.<br />
7. Explain what you do not like about these stores and how you can improve<br />
your department.<br />
The only disadvantage is that they can improve their denim classification by<br />
offering at least one or more national brands.<br />
<br />
5
Country Profile Sheet<br />
After analyzing and profiling several countries (China, India, Canada) with a<br />
NAFTA agreement with the United States, I concluded that is was best to trade<br />
through Mexico because they are a free market economy that is close in<br />
proximity for transportation for both land and sea.<br />
Mexico:<br />
o Traits of the country<br />
- Social<br />
• Nationality: Mexican<br />
• Language: Spanish only 92.7%, Spanish and<br />
indigenous languages 5.7%, indigenous only<br />
0.8%, unspecified 0.8%<br />
• Religions: Roman Catholic 76.5%, Protestant<br />
5.2% (Pentecostal 1.4%, other 3.8%),<br />
Jehovah's Witnesses 1.1%, other 0.3%,<br />
unspecified 13.8%, none 3.1% (2000 census)<br />
• Education: Literacy age 15+ can read and write<br />
86.1%; school life expectancy 14yrs<br />
- Political<br />
• Federal Republic<br />
• 31 states<br />
• International Organization Participation: APEC,<br />
BCIE, BIS, CAN (observer), Caricom<br />
(observer), CD, CDB, CE (observer), CELAC,<br />
CSN (observer), EBRD, FAO, FATF, G-20, G-<br />
3, G-15, G-24, IADB, IAEA, IBRD, ICAO,<br />
ICC (national committees), ICRM, IDA,<br />
IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO,<br />
IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO,<br />
ITU, ITUC (NGOs), LAES, LAIA, MIGA,<br />
NAFTA, NAM (observer), NEA, OAS, OECD,<br />
OPANAL, OPCW, Paris Club (associate),<br />
PCA, SICA (observer), UN, UNASUR<br />
(observer), UNCTAD, UNESCO, UNHCR,<br />
UNIDO, Union Latina (observer), UNWTO,<br />
UPU, WCO, WFTU (NGOs), WHO, WIPO,<br />
WMO, WTO<br />
• Time Difference: UTC-6 (1 hour behind<br />
Washington, DC during Standard Time)<br />
Mexico is divided into three time zones<br />
<br />
6
- Cultural<br />
• Family is the center of the social structure.<br />
• Traditional Hierarchical society: Father is head of<br />
household<br />
• Business is highly stratified and vertically structured<br />
• Rank is important and those above you must be<br />
respected<br />
• It is disrespectful to break the chain of hierarchy<br />
• Remarks to women is a sign of Machismo<br />
(masculinity) and is not considered harassment<br />
• Etiquette & Customs:<br />
o When greeting in social situations, women pat<br />
each other on the right forearm or shoulder,<br />
rather than shake hands<br />
o Men shake hands until they know someone<br />
well, at which time they progress to the more<br />
traditional hug and back slapping.<br />
o Wait until invited before using a Mexican's<br />
first name<br />
• Business Meeting Etiquette:<br />
o Initial meetings are formal.<br />
o Have all written material available in both<br />
English and Spanish.<br />
o Agendas are not common. If they are given,<br />
they are not always followed.<br />
o Business cards are exchanged during<br />
introductions with everyone at a meeting.<br />
o It is advisable to have one side of your<br />
business card in Spanish.<br />
o Business cards should contain both your<br />
professional and educational qualifications.<br />
o Present your business card with the Spanish<br />
side facing the recipient.<br />
- Economic<br />
• Free Market economy in the trillion dollar class<br />
• Dominated by the private sector<br />
• GDP: 1.667 Trillion<br />
- Geographic<br />
• Location: North America, bordering the<br />
Caribbean Sea and the Gulf of Mexico,<br />
between Belize and the United States and<br />
<br />
7
ordering the North Pacific Ocean, between<br />
Guatemala and the United States<br />
• Natural Resources: petroleum, silver, copper,<br />
gold, lead, zinc, natural gas, timber (the<br />
government considers the lack of clean water<br />
and deforestation national security issues)<br />
o Contributing Factors<br />
- Labor<br />
• Labor Force: 49.17 million<br />
- Inputs<br />
• Imports: metalworking machines, steel mill<br />
products, agricultural machinery, electrical<br />
equipment, car parts for assembly, repair<br />
parts for motor vehicles, aircraft, and<br />
aircraft parts<br />
- Products<br />
• Exports: corn, wheat, soybeans, rice, beans,<br />
cotton, coffee, fruit, tomatoes; beef, poultry,<br />
dairy products; wood products<br />
- Transportation<br />
• Airports: 1,724<br />
• Heliports: 1<br />
• Railways: 17,166km<br />
• Waterways: 2,900 (navigable rivers and coastal<br />
canals mostly connected with ports on the<br />
country's east coast)<br />
• Ports: Altamira, Coatzacoalcos, Lazaro<br />
Cardenas, Manzanillo, Salina Cruz, Veracruz<br />
• Merchant Marine: bulk carrier 5, cargo 3<br />
- Business Climate<br />
• The top 3 obstacles to running a business in Mexico<br />
include the Practices of the Informal Sector, Tax<br />
Rates, and Access to Finance.<br />
• 70.3% of firms compete against unregistered or<br />
informal firms<br />
• Declines in six of the 10 economic freedoms<br />
including trade freedom, business freedom, and<br />
investment freedom<br />
<br />
8
Country Analysis<br />
Country selected to import denim jeans<br />
MEXICO<br />
1. Stability of the country: Discuss the status of the government,<br />
relationships with other countries, social unrest, and so on.<br />
• Mexico is the most populated Spanish speaking country in the world and<br />
has 112 million people with 78% living in urban areas. 10% of the<br />
population is considered wealthy class and about 45% in poverty earning<br />
less than USD $10 per day. The remaining 45% of the population is<br />
considered middle class. Mexico has a very young population with a<br />
median age of 27. It offers a large market with a GDP of approximately<br />
USD $1.1 trillion. Per capita income is USD $15,100.<br />
• Mexico is a stable democracy<br />
• The banking system in Mexico has shown signs of growth after years of<br />
stagnation, but interest rates remain relatively high. In particular, small<br />
and medium-sized enterprises (SMEs) find it difficult to obtain financing<br />
at reasonable rates despite Mexican Government efforts to increase<br />
capital for SMEs. U.S. companies need to conduct thorough due<br />
diligence before entering into business with a Mexican firm, and should<br />
be conservative in extending credit and alert to payment delays. As one<br />
element in a prudent due diligence process, the U.S.<br />
• Commercial Service offices in Mexico can conduct background checks<br />
on potential Mexican partners. U.S. companies should assist Mexican<br />
buyers explore financing options, including Export-Import Bank<br />
programs.<br />
2. Conditions that may affect lead-time of production: List any natural<br />
disasters, cultural situations, and so on.<br />
• Violence among transnational criminal organizations has created<br />
insecurity in parts of Mexico, particularly in some border areas. Crime in<br />
Mexico continues to occur at a high rate and can often be violent. Street<br />
crime, ranging from pick pocketing to armed robbery, is a serious<br />
problem in most major cities. Carjacking are also common, particularly<br />
in certain areas Resort areas and tourist destinations in Mexico generally<br />
do not see the levels of violence and crime reported in the border region<br />
and in areas along major trafficking routes.<br />
<br />
9
• It can be difficult to find a single distributor or agent to cover this vast<br />
market.<br />
• Pirated Merchandise: Counterfeit and pirated goods are widely available<br />
in Mexico. Their sale is largely controlled by organized crime. Purchase<br />
for personal use is not criminalized in Mexico; however, bringing these<br />
goods back to the United States may result in forfeitures and/or fines.<br />
• While in a foreign country, U.S. citizens may encounter road conditions<br />
that differ significantly from those in the United States.<br />
• The United States and Mexico have a long history of cooperation on<br />
environmental and natural resource issues, particularly in the border<br />
area, where there are serious environmental problems caused by rapid<br />
population growth, urbanization, and industrialization<br />
3. Trade organizations the country is a member of<br />
NAFTA, UN, OAS, APEC, OECD, IMF, WB, WTO<br />
4. Laws, quotas, or duties that apply to the product of import<br />
Due to NAFTA there are no specified laws, quotas or duties<br />
5. Type of foreign currency and current exchange rate<br />
Mexican Peso (MXN)<br />
Exchange rate: 1USD=12.68637 MXN<br />
6. Ports within the country and shipping companies<br />
Ports:<br />
1) Veracruz<br />
a. http://www.searates.com/port/veracruz_mx.htm<br />
2) Altamira<br />
3) Coatzacoalcos<br />
4) Lazaro Cardenas<br />
5) Salina Cruz<br />
6) Ampico<br />
7) Guayas<br />
8) Mazatlan<br />
Shipping Companies:<br />
<br />
10
1) MSC – Mediterranean Shipping Company<br />
http://www.mscgva.ch/about_us/about_us.html<br />
2) Next Ocean Shipping http://www.shipnex.com/International-Ocean-<br />
Shipping/Mexico<br />
3) Amerijet https://www.amerijet.com/shipping-mexico.html<br />
4) Universal Cargo Mgmt.<br />
http://www.universalcargo.com/international_shipping_company/?gclid=<br />
CLfU5-aJr7UCFcc-MgodR30ADQ<br />
http://www.handyshippingguide.com/shipping-schedules/sea-freightservices-fcl-conventional-carriers/mexico/veracruz<br />
7. Suppliers within your selected country that manufacture denim jeans.<br />
Discuss the pros and cons of each supplier, and select the supplier that<br />
best suits your needs.<br />
Company Pros Cons<br />
CMT Denim<br />
http://www.cmtdenim.com/cmt.h<br />
tml<br />
Tavex<br />
http://www.santist<br />
atextil.com.br/16/<br />
home.html<br />
Out of Mexico<br />
http://www.outof<br />
mexico.com/<br />
Indigo Trade<br />
Mexico<br />
http://indigotrade<br />
mexico.com/abou<br />
tus.html<br />
• Fabric and Trim Warehouse near<br />
manufacturing<br />
• 18 hours to reach landing point<br />
in Texas<br />
• 48 hours to reach most<br />
distribution centers<br />
• Washes done in LA<br />
• 2.5 AQL quality audit system<br />
• Re-Uses 70% of water<br />
• Land<br />
Locked<br />
• Can only<br />
travel by<br />
truck<br />
• 10 factories in 3continents • Not really<br />
a lot of<br />
info about<br />
• Denim is their specialty<br />
• 2.5 AQL<br />
• Retails to JC Penney, Sears, Gap<br />
• 20min from TRC airport<br />
• Washed in LA<br />
• Short Production lead times<br />
• Produce and ship 3-4 weeks<br />
• No minimum<br />
• Land<br />
locked<br />
<br />
11
Business Protocol<br />
I. Type of culture (polychronic or monochronic)<br />
a. Mexico Is Polychronic<br />
II. Masculine or feminine (basis of culture) and gender<br />
Issues<br />
a. Masculine<br />
i. Women are discriminated against in the workplace, earning<br />
less<br />
ii. Rising number of murder of women and domestic violence<br />
III. Negotiation style and strategies<br />
a. They are comfortable with<br />
i. Hierarchical structures<br />
ii. Clear authority figures<br />
iii. The right to use power with discretion<br />
b. North tend to be more business-focus and often have a high sense<br />
of urgency<br />
c. South have a stereotypical manna attitude of conducting business<br />
at a leisurely pace<br />
d. Group oriented<br />
e. Tell you what they think you want to hear rather than what they<br />
really think<br />
f. Silence is rare and a sign of a serious problem<br />
g. Being overly direct is perceived as rude and pushy<br />
h. A senior executive should attend first meeting and negotiating<br />
team includes senior leaders<br />
i. Long-term commitment for business<br />
j. Competitive style<br />
k. Non-confrontational<br />
l. Win-win approach<br />
m. Slow and protracted<br />
n. May take several trips to achieve objectives<br />
o. Holistic approach<br />
p. Requesting a compromise may become an issue of pride<br />
IV. Type of communication (high-context or low-context)<br />
a. High Context<br />
i. Close Connections<br />
ii. Less verbally explicit (more non-verbal cues)<br />
iii. Less written/formal communication (trust)<br />
iv. Strong boundaries (Defined roles of authority and<br />
differences in status)<br />
<br />
12
v. Relationship focused (More personal and face-to-face<br />
relationships)<br />
b. Many business people speak and prefer American English<br />
c. Dislike loud and boisterous behavior<br />
V. Social and cultural elements<br />
a. Appropriate business dress<br />
b. Introductions<br />
i. Include a local intermediary/ interpreter<br />
ii. Greet senior person first<br />
iii. Handshake<br />
iv. Men should wait for women to imitate handshake<br />
v. If she doesn’t want to shake hands, best to bow slightly<br />
c. Presentation of business cards<br />
i. Use cards with English on one side and Spanish on the<br />
other<br />
ii. Show doctorate degrees on card<br />
iii. Spanish side facing recipient<br />
iv. Smile and keep eye contact when accepting someone else’s<br />
card, and examine it<br />
d. First name or title<br />
i. Names are usually given in order of first name, family<br />
names<br />
ii. Most have two family names<br />
iii. Use Mr., /Mrs./Miss or Senor/ Senora/ Senorita plus father’s<br />
family name<br />
iv. Academic title: Doctor/ professor or Ingeniero, Licenciado,<br />
Arquitecto plus fathers family name<br />
e. Gestures<br />
i. A slight movement of eyes may indicate embarrassment,<br />
showing respect, or disagreement<br />
ii. Hugging may communicate the development of a trusting<br />
relationship<br />
iii. American sign OK, with thumb and index finger is a<br />
obscene gesture<br />
f. Colors, numbers, and their meanings<br />
i. Red and yellow together = fiesta<br />
ii. Red and white = religious symbolism<br />
iii. White = magical<br />
iv. Green = independence or hope<br />
v. Red = unity or the blood of the country’s heroes<br />
g. Space<br />
i. More tactile and allow touching<br />
<br />
13
VI.<br />
ii. Stand only two feet or less apart<br />
iii. Don’t’ back away, a sign you are uncomfortable<br />
h. Gift giving<br />
i. Time<br />
i. Flexible in start and end times<br />
ii. Breaks when appropriate<br />
iii. Present and past Orientated<br />
iv. Schedule appointment 1-2 weeks in advance<br />
v. Always inform them on who they will be meeting<br />
j. Joke telling<br />
i. Appreciated, light and friendly<br />
Business entertaining<br />
a. Proper use of utensils<br />
i. Mexicans do not switch knives and forks. The knife remains<br />
in the right hand, and the fork remains in the left.<br />
ii. When not holding utensils, your hands are expected to be<br />
visible above the table: this means you do not keep them in<br />
your lap; instead, rest your wrists on top of the table (never<br />
your elbows).<br />
iii.<br />
b. Table manners<br />
i. Do not begin eating until the host says, "Buena provecho!"<br />
ii. Pass all dishes to your left<br />
iii. Any salad will usually be served after the main course.<br />
iv. The most honored position is at the head of the table, with<br />
the most important guest seated immediately to the right of<br />
the host (women to the right of the host, and men to the<br />
right of the hostess)<br />
v. Usually the one who does the inviting pays the bill<br />
c. Alcoholic beverages<br />
i. Tequila<br />
d. Appropriate conversation subjects<br />
<br />
14
Importing Trade Agreements<br />
Mexico has several importing trade agreements. The most important is<br />
the North American Trade Agreement (NAFTA). In the NAFTA agreement<br />
established in 1994 between the United States, Canada, And Mexico, these<br />
countries are able to trade and invest with each other free of duties and<br />
quantitative restrictions. There are a number of institutions that work to ensure<br />
that agreement and it’s implementation are performed correctly, for example,<br />
the free trade commission that is made of ministerial representatives that<br />
supervise the implementation and elaboration of the agreement.<br />
There are several other free trade agreements that Mexico has which<br />
include a bilateral free-trade agreement with Chile in 1998; it states that each<br />
country would gradually reduce tariffs on (three categories). Mexico also has a<br />
trilateral free-trade association called the Group of Three (G-3) with Colombia<br />
and Venezuela. This agreement took place in 1994 where tariffs on most<br />
products were to be gradually eliminated over ten years. Then in March 1994,<br />
Mexico entered a bilateral free-trade agreement with Costa Rico; it eventually<br />
expanded into an agreement with Central America including El Salvador,<br />
Guatemala, Honduras, and Nicaragua. Other agreements include Peru, Bolivia,<br />
Japan, Uruguay, EFTA member states (Iceland, Liechtenstein, Norway, and<br />
Switzerland), Israel, and the European Union (EU).<br />
There are numerous policies and procedures that are enforced for<br />
clearance into the U.S. by the Customs and Border Protection (CBP). The<br />
following is all United States Requirements for Importing:<br />
1. An individual may make his own customs clearance<br />
of goods imported for personal use or business.<br />
2. The U.S. Customs Service does not require an<br />
importer to have a license or permit. Other agencies<br />
may require a permit, license, or other certification,<br />
depending on the commodity.<br />
3. All merchandise coming into the United States must<br />
clear customs and is subject to a customs duty unless<br />
specifically exempted from this duty by law.<br />
Clearance involves a number of steps--entry,<br />
inspection, appraisal, classification, and liquidation.<br />
4. Customs duties are, generally, an ad valorem rate (a<br />
percentage), which is applied to the dutiable value of<br />
the imported goods. Some articles, however, are<br />
dutiable at a specific rate of duty (so much per piece,<br />
<br />
15
liter, kilo, etc.) others at a compound rate of duty<br />
(combination of both ad valorem and specific rates).<br />
5. The dutiable value of merchandise is determined by<br />
Customs. Several appraisal methods are used to<br />
arrive at this value. Generally, the transaction value<br />
of the merchandise serves as the basis of<br />
appraisement. Transaction value is the price the<br />
buyer actually pays the seller for the goods being<br />
imported.<br />
6. The Harmonized Tariff Schedule of the United<br />
States (HTSUS), issued by the International Trade<br />
Commission, prescribes the rates of duty and<br />
classification of merchandise by type of product; e.g.,<br />
animal and vegetable products, textile fibers and<br />
textile products.<br />
7. The tariff schedule provides several rates of duty for<br />
each item: "general" rates for most-favored nations;<br />
"special" rates for special trade programs (free, or<br />
lower than the rates currently accorded most-favored<br />
nations);<br />
Processing fees may also apply.<br />
Once goods have arrived they must file the appropriate documents by the agent<br />
or importer. The carrier chosen gives notification of arrival to the importer. If<br />
you are unable to be there to prepare and file your entry, commercial brokers,<br />
known as customs brokers and licensed by the Customs Service, may act as<br />
your agent. In order to avoid delays all papers are to be filed immediately from<br />
the first port of entry. Below is the list of the documentation needed:<br />
1. A bill of lading, airway bill, or carrier's certificate<br />
(naming the consignee for customs purposes) as<br />
evidence of the consignee's right to make entry.<br />
2. A commercial invoice, obtained from the seller,<br />
which shows the value and description of the<br />
merchandise.<br />
3. Entry manifest (Customs Form 7533) or<br />
Entry/Immediate Delivery (Customs Form 3461).<br />
4. Packing lists, if appropriate, and other documents<br />
necessary to determine whether the merchandise<br />
may be admitted.<br />
5. When the entry is filed, the importer indicates the<br />
tariff classification and pays any estimated duty and<br />
processing fee. A surety bond containing various<br />
conditions, including a provision for paying any<br />
<br />
16
increased duty that may be later found to be due,<br />
may also be required.<br />
There are speedier ways to clear customs; this includes electronically entering<br />
documentation to the Customs Automated Commercial System (ACS). This<br />
process can reduce clearance from days to even minutes. Also the dollar value<br />
of your import is determined if the entry is Informal or formal. This is<br />
determined by the goods value, if $2,000 or less the goods re informal and if<br />
more they are formal and require a surety bond in case the goods don’t meet<br />
federal standards. This bond allows the importer to take the goods prior to<br />
paying the duty. When importing textiles all apparel must have labels<br />
specifying content, instructions for care, and country of origin. This helps with<br />
the examination of goods at customs. The reason for the examination is as<br />
follows:<br />
1. The value of the goods for customs purposes<br />
and their dutiable status.<br />
2. Whether the goods must be marked with the country<br />
of their origin or with special marking or labeling. If<br />
so, whether they are marked in the manner required.<br />
Generally, imported merchandise must be legibly<br />
marked in a conspicuous place and in a manner to<br />
indicate the English name of the country of origin to<br />
the ultimate purchaser in the United States. Certain<br />
specific articles are exempt from this requirement.<br />
3. Whether the goods have been correctly invoiced.<br />
4. Whether the shipment contains prohibited articles.<br />
5. Whether requirements of other federal agencies<br />
have been met.<br />
6. Whether goods in excess of the invoiced quantities<br />
are present or a shortage of goods exists.<br />
If any discrepancy occurs there could be and increase in duty if there is one. In<br />
essence, to import from another country one must fully understand all the laws,<br />
agreements, policies and procedures needed to bring that product into the<br />
country. If any mistakes are made it could mean delays, which effects lead times<br />
and even sells.<br />
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Classifying the Product<br />
The product that is being imported is a denim jean, boy’s size 4-7. Following are <br />
instructions on how to locate the products classification number according to the <br />
Harmonized Tariff Schedule: <br />
1. Section XI: textile and textile articles <br />
2. Chapter 62 Articles of apparel and clothing accessories, not knitted or <br />
crocheted <br />
3. Number 3 (a) -‐ my product is classified as “one garment designed to cover <br />
the lower part of the body and consisting of trousers, breeches or shorts… <br />
etc.” <br />
o Under heading/ subheading 6203 and 6204 <br />
4. My product number is 6203.19.10 <br />
5. Unit of Quantity is 347 doz. kg <br />
6. Duty is Free due to being shipped from Mexico <br />
<br />
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The Cost Sheet<br />
Style #: B00412___________________________________ Date: March 12, 2013 <br />
Description: Boot Cut 5 pocket childrenʼs jean<br />
Season: __F13<br />
Fabric: __8oz Rain Wash Indigo Denim______________________________________________<br />
Size 4 5 6 7<br />
Size Scale 1 2 3 3<br />
Sketch<br />
Material Yardage Price Cost<br />
Stretch Denim 1 $5.75 $5.75<br />
58”<br />
Total Material $5.75<br />
Trim/Findings Quantity Price Cost<br />
Snap 1 .43 $.43<br />
Zipper 4” 1 .50 $.50<br />
Thread 1 .15 $.15<br />
Rivets 3 .01 $.03<br />
Main Label 1 .03 $.03<br />
Care Label 1 .03 $.03<br />
Price Ticket 1 .04 $.04<br />
Packaging 1 .15 $.15<br />
Total Trim $1.33<br />
Labor<br />
Cost<br />
Cutting/ Sewing $1.50<br />
Enzyme Wash $1.45<br />
Total Labor $2.95<br />
Description<br />
Cost<br />
Shipping $8.00 per dozen $.67<br />
Duty Free- NAFTA $0.00<br />
Overhead 18% of cost $1.81<br />
Total Manufacturing Cost: _________$12.51 <br />
Markup: ____59.9%_______<br />
Retail Price: _____$20.00___<br />
<br />
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Pro Forma Invoice<br />
BANKERS<br />
ROOM 1033 STAR HOUSE<br />
SALISBURY ROAD<br />
KOWLOON, HONG KONG<br />
BUYER: Pro Forma No.: 650 Date: 3/13/13<br />
PERRY'S DEPARTMENT STORE Order No.: PDS01-06 Date: 3/13/13<br />
15203 KING STREET Payment Mode: LC<br />
FREDERICKSBURG, VA 22401<br />
USA Terms: FOB Port: Manzanillo<br />
Ref. No. Description Packing Quantity Port Ship Date Rate US $ Amount<br />
Boot cut 5-<br />
pkt Jean 12/24 2,200 Ea. Manzanillo 12.51 27,522.00<br />
Total<br />
CBM: Total FOB US $: 27,522.00<br />
<br />
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Shipping Routes<br />
Part I. Shipping Jean by Land<br />
A. Type of box used for packing<br />
a. Average weight of a pair of children’s jeans is 1.2lbs<br />
b. 7” x 4” x 2” box fits about 40 pairs of jeans<br />
B. Number of boxes needed<br />
a. Need about 55 boxes to pack a full order of 2200 pairs of jeans<br />
C. Type of container to be used<br />
a. Semi- truck trailer<br />
D. Space needed in the container<br />
a. I need about 2 rows of four boxes stacked six boxes high.<br />
E. Cost to ship jeans<br />
a. According to a Quote from UPS $5800 by freight truck<br />
F. Create a timeline from manufacturer to distribution center showing the<br />
means of transportation<br />
a. Pickup in the Manzanillo factory and it will take about 5 days to<br />
travel to the California Factory.<br />
Part 2. Shipping Jeans by airfreight.<br />
A. Type of garment carrier to be used for packing<br />
a. Each individual pair of jeans will wrapping in plastic and placed<br />
inside of a wood package box<br />
B. Number of garment carriers needed<br />
a. Need 2 wood package boxes to ship my total shipment together<br />
C. Space needed in air freight<br />
a. 116 X 92 X 68<br />
D. Cost to ship jeans.<br />
a. According to a Quote from UPS $2800 to ship by air<br />
E. Create a timeline from manufacturer to distribution center showing the<br />
means of transportation<br />
a. Picked up and delivered to airport for shipment by air to<br />
California LAX then transported by semi-truck to the warehouse.<br />
Based on the cost of both shipping methods, I would recommend traveling by<br />
air. It is about $3,000 cheaper and that money can be applied to the pick-up<br />
and delivery of the shipment. This method could also save money on packaging<br />
cost and the cost to gas to transport.<br />
<br />
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Packing List<br />
<br />
22
Commercial Invoices<br />
<br />
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