Are your customs processes joined up with the rest of the business?
Outdoor Sport/Leisure retailer
Quadrel were contacted by the Financial Director of an SME to analyse why customs costs were affecting their profit margin on selling bicycles and parts in the UK.
When reviewing their supply chain, Quadrel identified that some imports were being purchased from countries where manufacturing operations were subsidised by the local government. Quadrel also reviewed the business processes and discovered that the purchasing team were incentivised to buy at the lowest cost in line with budget expectations for which they were rewarded with annual bonuses.
Quadrel brought to the client’s attention that the purchasing strategy was flawed as it did not take into account the anti-dumping measures imposed in the UK on imports of certain products and components, which then resulted in significant additional amounts of duty being imposed. The focus in the sourcing strategy was on purchase price from the supplier, rather than on landed cost in the UK. This had the dual result of increasing the cost of imports and adversely impacting profit margins.
Quote from client:
“Our staff have learned a lot about how customs issues permeate right through the business – we are all more knowledgeable now as well as solving our original problem.”
Businesses should ensure that commercial, legal and financial decisions taken on by departments and teams around the business take into account the potential customs implications and impact.
How we can help:
You can consult with our customs specialists when you need to know more information, take action or solve a customs problem. Our consultancy service is proven to make your business more customs savvy. Get in touch today by calling us on 02380 302 302 or email us at firstname.lastname@example.org.