How to import goods from EU countries

In this article, Marcel and Chantal van Dam of Wicotex B.V. delve into how their wholesale business imports products from other EU countries.

• Market research and product requirement
• Working with suppliers 
• Laying down agreements
• Arranging transport
• Paying your supplier
• Import VAT
• Import documents

Market research and product requirements

The first step is conducting market research (in Dutch) to figure out whether there is demand for the product you are looking to import. For your market research, you could use figures and statistics from Statistics Netherlands (in Dutch) and Retail Insiders (in Dutch).

Wicotex B.V. is an importer of table linen, door curtains, and window films, among other things. The company sources all its products from abroad, with Marcel and Chantal buying them within the EU directly from producers in six member states. “All products meet European product requirements, which our suppliers prove with certificates like the OEKO-TEX certificate. That way we know the products do not contain harmful chemicals and are safe for consumers.” 

Working with suppliers

There are various ways to go about finding suppliers. The couple got to know many of their suppliers at international trade fairs such as Heimtextil and Ambiente in Frankfurt, Germany. “Because of the coronavirus, more and more suppliers are reaching out to us digitally,” Chantal notes. “And we occasionally contact them ourselves when we come across a new product.” Every year, they pay a visit to their biggest suppliers, with Marcel highlighting the main benefits: “You will notice that they go the extra mile for you and seeing the production processes and production capacity in person gives you a good idea of the company.”

Samples and quotations

The entrepreneurial duo always asks suppliers for samples and quotations before they place an order. “A sample tells us exactly what level of quality to expect. We supply products to all market segments, so samples are a good way to figure out which supplier is right for which segment. Quotations, on the other hand, help us compare suppliers in terms of price, delivery time, and payment terms.”

Communication

Chantal prefers communicating with her suppliers via email. “Because of the language barrier, it can be difficult to understand each other over the phone at times. We always email our suppliers in English in order to prevent misunderstandings wherever possible. If you run into any issues, you always have your email correspondence to fall back on.”

Laying down agreements

You can lay down agreements with your supplier in a contract. Contracts are usually written documents, either on paper or by email, but verbal agreements are also legally valid. However, it can be very difficult to prove what you agreed on verbally, which makes written contracts a safer option. Accepting a quotation also constitutes an agreement.

Exclusivity

Suppliers may offer importers exclusivity, which means that they will only sell products intended for a particular market to you. A particular market could be the Dutch market, for instance, or a specific group of customers. If your supplier offers exclusivity and you accept, lay down a distribution agreement with an exclusivity clause.

Marcel and Chantal opted against accepting exclusivity. Marcel explains: “We want to have the freedom to sell similar products from other suppliers, and exclusivity puts restrictions on that freedom. What’s more, producers prefer not to offer exclusivity in our trade, because they also want the freedom to sell products to other customers in the same market.”

Arranging transport

The EU is a single market without any internal borders, which means your goods do not have to be cleared by customs in most cases. There are, however, some exceptions, such as if you import goods from another EU member state and ship them through a non-EU country like Switzerland, or if you import goods from a special territory of the EU like the Canary Islands. Marcel and Chantal mainly transport  their goods by road. j“Our orders can range anywhere from two pallets to a full truckload of goods,” Marcel explains. “We prefer having our suppliers arrange transportation and deliver the shipment to our warehouse. We often arranged transportation ourselves at first, but we kept running into issues. This one time, the driver was ready to pick up the goods at 3 o’clock on Friday afternoon, but he had to wait until the following Monday because the supplier needed more time to produce the order.” 

Agree on an Incoterms® rule with your supplier to know exactly who has to arrange transportation and who will pay for transport damage.

Paying your supplier

For importers, purchasing goods on credit is a risk-free approach, whereas you will always run the risk that your supplier may not deliver your goods if you pay in advance. Consult your bank on which form of payment is the best fit for the transaction in question. Marcel and Chantal pay their European suppliers in euros to avoid foreign exchange risk.

Payment term

Marcel and Chantal usually have their suppliers deliver their goods on credit. “Some suppliers want us to pay within 14 days, while others have 30 or 60-day payment terms. To limit their own risk, they will then take out trade credit insurance. Some suppliers give us a 2 to 3% discount if we pay the invoice within ten days, which is especially useful for products that we know will sell quickly. The advantage of purchasing goods on credit is that you can withhold payment if certain products are missing from your order. Fortunately, our suppliers always resolve any issues right away, either by sending a credit note or by including the missing products in the next shipment.”

Import VAT

Suppliers always send invoices to Marcel and Chantal with 0% VAT. Chantal enters the invoices into their systems, and their accountant takes care of their VAT returns.

When you import goods from another member state, you usually do not need any documents other than a waybill from the carrier and a packing slip. For some products, you do need additional documents, such as an EU certificate for endangered animals and plants or a wholesale permit for medicines. “Usually, the goods we get by lorry only come with a CMR note and a packing slip,” Marcel explains. “Invoices are always sent by email. We do always double check the shipments by combing through the packing slip, as it is pretty common for goods to be missing.”

If you pick up goods from your supplier with your own vehicle, make sure that you have an invoice and a contract to prove that you are transporting your own goods (evofenedex, in Dutch). Otherwise, you run the risk that the police or an inspection authority may mistake you for a shipping company, which you would need special permits for.

Import documents

You do not usually need documents when you import goods from another member state. You do need a bill of transport and a bill of goods. Some products require extra documents. For example, an EU certificate for endangered plants and animal species. Or a wholesaler's permit for medicines. 

“The goods we receive by lorry only come with a CMR waybill and a packing slip”, Marcel explains. "We receive invoices by email. We always check the incoming shipment against the packing slip that comes with it. Goods are missing more often than you would think.”

Own transport

Do you use your own means of transport to get goods from your supplier? Make sure you can prove that you are using own transport. For example, by putting it in a contract or on an invoice. If you do not, you risk being pulled over by police or an inspectorate who regard you as a transport business. Transport businesses need all kinds of special licences. 

Do you want to discuss your import plans with an adviser? Call the KVK Advice Team: 088 585 22 22.