In this new series, we break down the process of how to import goods into Australia from various countries. The third post in the series focuses on Italy, a major apparel goods exporter.
Below are some interesting background facts about Italy's current economical status:
- 9th largest economy in the world
- 4th largest consumer market in Europe
- 6th largest exporter of goods in the world
- Healthcare system ranked 2nd out of 180 economies (WHO)
- Over 50 million tourists a year - huge driver of the economy and large contributor to national income
- Family-owned SMEs account for 92% of all Italian companies, responsible for 70% of Italian GDP
In 2017-18, goods imports from France were valued at A$6.68 billion, and Australian goods exports to France at A$800 million.
Despite some of the challenges Italy faces, such as high public debt, low growth and regular political change, it also has some contrary elements such as low private debt and a sophisticated manufacturing base. Northern Italy is amongst the wealthiest regions in Europe.
As the third largest economy in the Eurozone, Italy is home to some major multinationals and has a large sophisticated consumer market. The industrial sector is characterised by small and medium enterprises (SMEs) and family businesses, often with a strong regional focus. While subject to EU regulations, there is often local regulations which must adhered to.
Australia and the European Union (EU) launched negotiations for a free trade agreement (FTA) on 18 June 2018. The first Negotiating Round was held in Brussels in July 2018, and the second in Canberra in November 2018.
How to import goods from France to Australia
1. Product sourcing & validation
Italy has some of the best apparel manufacturers in the world if you’re lucky enough to connect with one of them. Italian artisans have been taught how to make apparel and apparel accessories over decades by their grandparents and parents.
A majority of Italian manufacturers (92%) are SMEs. This makes it easier to negotiate, source, and develop products for startups due to the lower minimum order requirement. Italian goods are highly valued in Australia as being quality-backed by its craftsmen, and are often tagged with a higher price when 'Made in Italy'.
Connecting with a high quality Italian manufacturer can be difficult, especially if you don’t speak Italian and are new to the world of manufacturing.
- Australian requirements for importers: Australia has very strict biosecurity laws surrounding certain products. You must keep track of the product safety standards, labelling requirements, and laws surrounding import permits.
- Sourcing suppliers: As Italian suppliers are mostly SMEs, and there are no 'directory' like Alibaba for China, it is best to actually visit Italy to source your supplier. Otherwise, beware that there is a language barrier when searching for suppliers online, as most Italian suppliers may not speak English.
- Products sourced from Italy are generally higher priced. Use this calculator to see if the manufacturing costs are within your budget.
Product validation is always a necessary step before importing any goods into Australia. If you are a new business, make sure your product or business idea is well and truly marketable and sellable in Australia. Do not over-commit to a big order before doing this step.
2. Discuss terms of trading with your supplier
Your terms of trading could determine how much responsibility you may have with your cargo. Read about our Incoterms and why this is so important to establish from the get-go with your secured supplier. Once your product and contract is signed, it is much harder to renegotiate these terms. On the other hand, if your supplier are unable to extend logistical help, find an exporting agent or freight forwarder that can help you navigate the clearance procedures for each type of incoterm.
3. Understand the various regulations, tariffs, and licenses you need to export.
Italy is part of the EU and at this stage Australia and EU does not have a Free Trade Agreement. The process of establishing the FTA is currently in progress (as of Feb 2019) and the successful implementation of one will mean that tariffs will be reduced significantly.
Since July 1, 2009, all companies established outside of the EU are required to have an EORI number if they wish to lodge a customs declaration or an Entry/Exit Summary declaration. An EORI refers to an Economic Operator Registration and Identification, which allows all transit between the EU nations and to/from other nations outside of the EU.
A large majority of Italian imports into Australia are leather goods, as well as other apparel goods. Having a good customs broker that knows the regulations and transporting requirements with leather and other animal-based products will allow you to not only save money by getting it right the first time, but also protect your goods. You may also be required to obtain an import permit with certain categories of imports, such as batteries.
Duty refunds are available also to certain products. To determine whether or not your product is eligible for a duty refund, you will need to know your product's HS Code and do some research on the Department of Foreign Affairs and Trade website. Alternatively, you can also approach a freight forwarder or customs broker and consult with them to see what type of duty refunds and tax exemption programs you are eligible for.
Australia has strict product safety standards. For instance, any products deriving from wood must be fumigated and treated before being released at the border. More often than not this is done at origin as Australian customs will charge you far more. Make sure your product is compliant with Australian safety standards before importing. A list of regulated products is available on Productsafety.gov.au. However, this site does not include electronic product standards and regulations.
If you are importing milk products, animal-derived or food products, you will also require an import permit. This guide from the Department of Agriculture and Water Resources will help you determine whether you need an import permit and how to get one.
4. Arranging transport for your cargo ahead of time.
Transporting your goods from France can go much more smoothly if you deal with a courier or freight forwarder. Use the guide below as to who to go to when dealing with France-Australia logistics:
If you are importing in peak season (October - January), it is important that you arrange for your cargo transport well ahead of time. Read this blog post for more tips to prepare for peak season trading.
Depending on the nature of your goods, many options may be available for transporting your cargo. As a rule of thumb, if you are a beginner importer, it is best to go with a reliable courier such as DHL, TNT, etc. while you build your market volume. If you are a seasoned importer, freight forwarders and 3PL are a great way to improve your profitability and reduce freight costs by pooling the 3PL's resources and leveraging their economies of scale.
To determine what type of transport is best for your cargo, download our Beginners to Freight Forwarding guide.
While speaking to your freight forwarder, it is important to give them the right information so they can arrange the best route and transport options for you. For instance, seafood importers must be able to obtain an import permit and will undergo strict inspection procedures in Australia, therefore this information must be obtained before approaching a freight forwarder.
5. Distribute and market your product in Australia
In order to have a success import venture to Australia, your goods must reach the hands of the consumers in the right place, under the right circumstances. Finding retailers and stockists of your products to get your products in the hands of Australians will be crucial to your business plan. Do your research into the target market and where they are hanging out in order to effectively market your product.
Having a 3PL to deal with warehousing and distribution can save huge headaches when it comes to distributing your goods. As seasoned freight forwarders, we also find having the same 3PL as your customs clearance effectively streamlines your entire process and improve your bottom line, and also frees up your time to deal with important business stuff.
Final words for importers from France to Australia
Italians have a formal approach to business interactions and surnames and titles should be used in the early stages, though this may become more informal once stronger ties are established.
Personal relationships are important, face-to-face meetings and visits will generally assist with developing stronger business ties. It is important to make appointments in advance and to be punctual. Conservative attire is recommended for business meetings. Follow up should be undertaken, as responses may not always arrive quickly.
English may not be spoken by all company representatives, so it is advisable to confirm in advance. Local documents and information are generally presented in Italian and translations between languages may be required.
When writing figures, Italians invert commas and decimal points, e.g. 1,5 per cent and € 2.300.000.
As an award-winning freight forwarder and company, we are able to offer our clients a full freight service that includes import/export, customs clearance, 3PL, and warehousing and distribution. We are proud to be Australian-owned, service-focused, translating to highly satisfied clients. We have been named Excellence in Business, Business of the Year, Employer of the Year, to name a few.
Your import journey from France to Australia starts here. Contact one of our friendly Customer Success Managers to see how we can help to transform your business.