Tuesday, June 10, 2003

Air Freight Costs and Sales Tax

I am starting an import business of Brazilian handcrafts and I have two
questions:



1) In the Jonh Spiers course and handout it is said that the landed cost
(freight) is about 25% of the first cost for most consumer items. However, I
have been looking for air freight from Brazil to San Francisco and this cost
represents more than 25% of the original product cost. As I am just starting and
testing the products I don't want to ship a whole container by sea. I showed
some pictures of my products to the retail stores and they liked it, but I want
to get some orders before bringing large quantities to US. My idea is to get a
small order and ship it by air to see how the market respond to my products and
how well-prepared my suppliers are to attend the US market. Only after some
orders and deliveries I would be comfortable to ship a large container. Does
anyone have an idea of transportation costs by air from Brazil to US? Does
anyone recommend a specific air freight company?



2) Should I consider the sales tax when pricing my products? I know that sales
taxes are added to the retail price when the customer pays for the item. Does it
work the same way for a wholesale company? Should I mention anything about sales
tax in my price listing?



Thanks a lot,



Carol


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