How to Start an Import/Export Business

The government is aggressively encouraging economic actors to be able to export their business products to foreign countries. In addition to continuing to improve regulations and services, the government also gives appreciation to entrepreneurs who have already exported.

For example, the Primaniyarta award, the highest award from the Indonesian government to outstanding exporters. Hopefully, this will be an example for other exporters to improve their export performance for the better.

For those of you who want to or are planning to export a product but don’t know the procedure, the 4 steps of this export procedure can be a reference. At a minimum, you will get to know the basics before you decide to consult directly at the trade office, for example. The four steps of the export procedure are as follows.

 
Make a Sales Contract Letter or Sales Contract Process
Issuance of Importer’s Payment Guarantee Letter to the Exporter or Letter of Credit (L / C) Opening Process
Issuance of Shipping / Shipment Documents or Cargo Shipment Process
Disbursement of Shipping Documents / Claims on Goods Paid by Importers or Shipping Documents Negotiations Process
For more details, regarding the understanding of the 4 steps of the export procedure, let us peel one by one.

Make a Sales Contract Letter
The Sales Contract Process is a document of agreement between the exporter and the importer to carry out the buying and selling process. This document contains payment terms, price, quality, quantity, method of transportation / shipping, insurance, and others.

Maybe you are wondering, why in the first step, suddenly have to make contract documents? It’s true if you question that. Because, before entering these four steps, there is indeed a process that is already underway.

What is the process like?

  1. Promotion
    The first is promotion. Easy like this. When we are going to sell, the first thing to do to market the goods is promotion. Because this context is export, what is sought is prospective overseas buyers or prospective importers.

 
There are many ways to do promotions. For example, using online media, electronics, newspapers, magazines or participating in trade shows. Can also communicate with the Chamber of Commerce and Industry, trade attaches, and others. These institutions function to help promote commodities / products ready for export by Indonesian entrepreneurs.

  1. Inquiry
    If from the promotion you get a prospective buyer who is interested, then the prospective importer will send a letter requesting a certain commodity (letter of inquiry). This letter usually contains a description of goods, quality, price, and delivery time
  2. Offer Sheet
    Next, we, who will export, must respond to the request of the prospective importer by sending an offer sheet. This offer sheet contains information according to the request of the importer regarding the description of goods, quality, price, and delivery time. The offer sheet is also informed of the terms of payment and delivery of samples / brochures.
  1. Order Sheet
    After prospective importers get offers from us, as potential exporters, and study the offer sheet, if they agree, then they will send an order letter in the form of an order sheet (purchase order) to us.
  2. Sale’s Contract
    In accordance with the data from the order sheet, then the exporter will prepare a sales contract (sales contract) which is added with information on the natural disaster clause and inspection clause. This sales contract is signed by the exporter and sent in duplicate to the importer.
  3. Sale’s Confirmation
    Prospective importers will study the documents / letters of sale and purchase. If the importer agrees, the sales contract will be signed by the importer and then returned to the exporter as sales confirmation. Meanwhile, 1 other copy of the sales contract will be kept by the importer.

L / C Opening Process
After there is a sales contract or sales letter, the next process is;

The importer will ask the foreign exchange bank to open a letter of credit, a guarantee letter for the money to be paid to prospective exporters according to the agreement stated in the sales contract.
Foreign exchange banks (opening banks) will open letters of credit in their existing bank networks in exporting countries. This bank we call as advising bank.
This Advising Bank will check the validity of the letter of credit from the foreign exchange bank of the prospective importer. If it is correct, the advising bank will send a letter of credit as collateral for the goods to be exported.
Cargo Shipment Process
Goods Exporting Vessels
After the exporter receives a letter of credit from the advising bank, what we, as prospective exporters, must do is:

Prospective exporters order vessels at export – import shipping companies. This process still refers to the provisions in the sales contract.
After that, prospective exporters must make Notification of Export of Goods (PEB

) at the Customs Office at the port. Prospective exporters must also pay export tax and additional export tax at the advising bank or bank that we use in the export-import service in accordance with what is stated in the sales contract.
After dealing with the prospective exporter, the shipping company will load the goods and submit several shipping documents. The shipping evidence is then submitted by the exporter to the advising bank to forward it to the foreign exchange bank where the importer is located.
The importer will receive shipping documents if he has made payment to the foreign exchange bank where he is. This document is very important for importers because it is a condition for taking imported goods. That’s not all. To be able to take the goods, the importer must also show proof of payment to the shipping agent of the imported goods.
Shipping Document Negotiation Process
This is the process of taking money that has been paid by the importer to the bank. Requirements for claiming money for goods that have been sent are documents from shipping companies that have sent goods to the importer.

After receiving documents from the shipping company, the exporter will prepare other documents required in the letter of credit, such as invoices, packing lists, certificates of origin, packing lists, and others. After all the requirements are complete, it is then submitted to the advising bank to obtain payment in accordance with the letter of credit.
To issue payment money, the advising bank will check the completeness and accuracy of the goods delivery document.
If complete, the shipping documents will be sent to the foreign exchange bank in the importing country to get payment money for the exporter.
Foreign exchange banks will check the completeness of the documents they receive. If it is appropriate, foreign exchange banks will pay off payments to advising banks in Jakarta.
Then, the foreign exchange bank hands over the documents to the importer which he will use to collect the imported goods.

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