Sampling is the first step ahead on the journey of Exporting!
As a professional working in the Foreign Trade Industry, I have witnessed a lot of fresh exporters bogged down with a lot of doubts, worries, and concerns about sending out samples to another Country before the buyer finalizes it. As soon as they find a product and a few prospective buyers across the border, the worry starts. How to send it? Who shall pay? Which Courier should I Choose? The Courier agency I know refused to carry it. Now what? How about GST? Will I get a refund of GST? How to send and what bill do I generate?
The new Exporters run helter-skelter for just getting themselves to send the product samples across the border. The process is very simple. All goes smoothly if we follow the process.
We presume here that the buyer across the border has virtually seen your product – at least on the website, you have procured all your registrations and quality certifications for the product already and very importantly, you and the buyer both are clear on the pricing in case the order gets through. If all this is in place, let us move ahead.
There is a checklist, one needs to understand and move step by step:
- You as a businessman, first & foremost need to have an IEC – registration for Export-Import under DGFT
- You can also send / export freely “exportable” items on free of cost basis for export promotion subject to an annual limit set to a license ( IEC ). Well for a first-timer, there should not be a problem. Later on, you may consult your Chartered Accountant for this financial clause.
- You and your buyer are clear on the exact H.S. Code and specifications of the product.
- It is very important that you have detailed product knowledge. For example, lemons – now there are several different types of lemons growing in India and also very different types of them growing in Mexico, USA or Spain – you must have the product information to the extent which one the lemon that you are going to send to this buyer. For example, It should not be that you are talking of “Sour Lime” and the buyer in Dubai understands it as ‘Eureka Lemon”
- Now is the packing time.
- Your product must be clean, without any dust, without any patches, and should be brand new,
- Ensure that whatever product you are packing, should remain fresh when it reaches the buyer too. Especially the agro products like fruits, vegetables, herbs, etc.
- If you are getting the product from a supplier, supervise & inspect the sample that you send. Hands pick the items for the sample.
- Packing should be such that the product itself does not touch and spoil each other.
- Properly pack in boxes or bags
- Label your product properly with Product name, quality, ingredients, quantity, etc.
- Send in exact quantity and specification as per the buyer.
- Normally samples range from 1kg to 250kg.
6.Finally before your seal, the pack prepares an Invoice.
- Take a format from iiiEM Documents
- The invoice should mention the Value of this material/product in USD
- Invoice must have clear mention “SAMPLE – NOT FOR SALE”
- Invoice must be printed & not handwritten
7. GST Tax from India
- For the samples, there is no GST
- However, if you have bought your free sample from a manufacturer than GST is paid to the supplier/manufacturer.
8. Finally we come to the HOW to dispatch
You can send the samples through the postal channel, Courier, or airmail. They further divided into the following 3 categories which are as follows:
- For the samples which have a value up to Rs. 10,000/-, you have to file a simple declaration that it is not engaged in foreign exchange and its value is less than 10,000/-.
- For the samples which have a value less than Rs. 25,000/-, you have to acquire a value certificate from your bank and submit a commercial invoice certifying that it is not engaged in foreign exchange and its value is up to 25,000/-.
- For the samples which have value more than Rs. 25,000/-, then you have to acquire a waiver from the Reserve Bank of India.
Send your samples as a GIFT Package, like giving a ‘Gift’ to someone on his birthday/marriage/anniversary, etc. This will create a lasting impression on your buyer. As you know the first impression is the last impression which is very important.
9. Choose the right Courier or IATA agency
- Courier companies can be DHL, TNT, FedEx, Blue Dart, Aramex, SpeedPost, etc.
- You can also send a sample of 250kg via courier but it would be more costly, so better you do the export procedure and send via IATA agent via air to save costing, for the big sample you need to follow the same export procedure as big cargoes.
- Take a proper receipt for the payment of the courier, speed post, or whichever channel you chose.
- Airway Bill no. should be sent to the Buyer on the other side that he confirms when the parcel is received by him.
- Even you must track the parcel with the Courier channel.
10. Customs, may open your parcel, the tracking link will inform you. Not to worry, it happens and it is their duty to check if they want to or find something “different”, thus you are requested to enclose the Invoice with SAMPLE – NOT FOR SALE, and mention the product properly with a description in the Invoice.
11. Once the sample parcel is received by the buyer,
- Give a courtesy call to the recipient / prospective buyer
- Ask him how the product is, does it match his expectations
- Talk about final pricing and
- Close the order
After the sample is received and approved they may ask for a larger quantity of samples.
The cost of sending out Samples across the Border to another country is only your business investment.
Please take it as a step forward towards closing a deal for Exporting your product.
Wishing you the very best!
Exporting is Good!