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KenH
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PostPosted: Tue Nov 20, 2007 1:28 pm 
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Brazilian Rosewood
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This has actually come up on another post, but I didnt want to sidetrack that post. For those of you who sell Internationally, what problems or pitfalls should I look for? Are there any tax issues or other import/export pitfalls that I should be aware of?

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Rick Turner
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PostPosted: Tue Nov 20, 2007 1:58 pm 
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DO NOT take credit cards from anyone you don't know well. Talk to your banker and then work ONLY via direct bank transfer unless you really trust the folks, and set up a secondary bank account just for dropping the money into.   As soon as the money hits the account, transfer it to your regular account. Keep a virtually zero balance in that international transfer account so that nobody dips in via computer and wipes you out. Cash is good, so is gold bullion.

Get paid and get payment confirmed as valid and solid before you ship. Legitimate international customers expect this. Make sure that it's shipped either freight COD or that you got enough dough to cover shipping. You are not responsible for duties or transfer taxes.     

If your client wants you to prepare a "special export invoice" that lists the price at a "wholesale" amount that may be taxed at a lower rate by customs, make sure that you don't insure the instrument for more than that amount in shipping, and let your client know that he or she is bearing damage risk above and beyond the stated value.   

US Mail is excellent for a lot of international shipping. So is UPS.   

Do not ship anything made of Brazilian rosewood unless you itemize it and identify it as Cambodian, Madagascar, or whatever on your invoice. Yes, it's better to outright lie than to say nothing; if it kinda looks like Bz, it may be confiscated. If it's identified as something else, it's probably something else. Identify (or mis-identify) by Latin names where you can.

There is a lot of paper work...there are things called "Harmonized Codes"...an incredibly bureaucratic nightmare of minutia that describes the products you send.

Be prepared to send along up to five copies of your invoice. Sometimes "they" want it; sometimes "they" don't, but like having a 9 mm Glock, better to have it and not need it than need it and not have it.

Just suck it up and learn the stuff from the UPS website.

These should be banner years for us to export. The US dollar sucks in the rest of the world, isn't going to get any better for at least a decade, and our stuff is cheap... Welcome to the New Millenium in which the US is known as a 3rd World country, supplier of cheap high-end guitars to the world.   
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KenH
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PostPosted: Tue Nov 20, 2007 2:21 pm 
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Thanks for the insight Rick!


At last glance, my web site is being hit by over 39 countries. The #2 country is Indonesia. I know why this is, and I look for a comission soon from there. Malaysia is chiming in at #3 and Canada at #4. Of course the USA is #1.


Thanks for the advice on the International bank account. I have a love/hate relationship with banks, but I am learning to play their games. Having this tidbit of information will help considerably.


 


If anyone else has advice, I would appreciate you sharing what you know!


 


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Ken H
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Howard Klepper
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PostPosted: Tue Nov 20, 2007 2:23 pm 
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Do not take cashiers checks or money orders, even if you are told that you can wait while they clear (there are a lot of forgeries that will clear initially, but get charged back to tyou when they are discovered weeks later). Don't take any kind of paper supposedly worth more than your price; it's a scam. Beware of anyone (foreign or domestic) who says they have a shipper who will pick up the goods--another sure sign of a scam.

The US of A has long been the world's biggest debtor country. We lived high on borrowed money. Now we will make the classic move of the debtor nation--deflate the currency and pay them back with cheap money. Besides, we'll be passing the debt on to our kids, anyway (that'll teach those ingrates). As Rick said, the good times will roll on if you have something to export.

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TonyFrancis
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PostPosted: Tue Nov 20, 2007 3:37 pm 
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What Rick said. Most international buyers expect and know all the fuss of paperwork, customs duties and higher shipping rates. Most all of them try to escape this so its important to stand firm...otherwise you will end up paying for their taxes ext. I learnt the hard way.
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Rick Turner
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PostPosted: Tue Nov 20, 2007 3:39 pm 
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Koa
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Location: United States
Indonesia is the #1 scam location; don't ask me how I know... Malaysia is right up there, too. Then there's Africa...   I'd be willing to bet that 98% of any inquiries you're going to get from those places will be scams. They really do their homework, too. There are probably some of those folks quite aware of the OLF.

You're dealing with people who have nothing to do other than scam you, cheat you, steal from you, convince you that they're legit and then do it again. They're brilliant at it, and they're nothing if not hard working. If someone from one of those nations is serious about buying from you, let them come here and you can go to the bank with them, watch them convert whatever they want into $100.00 bills, and hand them to you in the presence of a bank manager.   

Yes, we got burned to the tune of $5,00.00 on a credit card scam. Indonesia. The card amounts cleared...for almost two weeks...and then it was all over...for us.    The guy knew our product line, knew the catch phrases to use...all that, and it was a total rip.

Now with our credit card charge throughs, we have to get billing address, zip code, V-code on the back or front of the card all in addition to the card number and expiration date. If the card runs through as "exact match", the credit card company will honor the sale for us. If we don't get "exact match", it's on us to take the risk. If the ship-to doesn't match the bill-to, we get paranoid. We're very careful now.

Most of our credit card sales are either to dealers whom we trust or people with whom we have history...it may be a deposit on an instrument which will go through long before we ship or a final payment where we have history.

If it's too good to be true, it's probably a scam. If it's from some place that seems kind of obscure to want your instruments, it's probably a scam.   If it's legit, but from some place known for scams...Nigeria, Indonesia, Maylaysia, then the legit buyer knows darned well that he has to bend over backwards to make it right for you as he's well aware that his fellow countrymen (yeah, it's usually a guy thing...) are known for scams.

Oh, if it's from some place known for off-shore, out-sourced call centers, it's probably a scam, too. There's a tremendous amount of stolen credit card and banking info in the above mentioned countries as well as India. Our North American financial info is not secure or private or safe.

"Caveat Venditor"...seller beware...

And now you don't have to ask me how I know...I've given up the Paul Harvey moment...


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KenH
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PostPosted: Tue Nov 20, 2007 4:25 pm 
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Thanks again for sharing your insight. I have policies in place to insure my recieving the money due to me and to limit my vulnerabilities financially.


I demand $750 up front to get on my waiting list, and then 1/2 of the remainder when work begins, and the remaining money before shipment. So far this has worked as far as keeping me from doing builds that the people have no intention of paying for or are trying to scam me. Right now the waiting list is 4 to 6 months, so this allows plenty of time for the deposits to clear.


I have not sold any guitars internationally....yet. The source in Indonesia and Malaysia for selling guitars is legit and trusted....as far as I can trust them with the above payment plan. I was just curious about shipping guitars across borders and the paperwork to get them to their destination in tact.


Thanks again for your advice! I'm sure I am not the only international virgin who needs to know this information.


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Ken H
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TonyFrancis
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PostPosted: Wed Nov 21, 2007 9:29 am 
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Koa
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Joined: Mon Jul 02, 2007 1:22 pm
Posts: 766

Having said all that and taking all the nessesary precautions... There is alot to be said for helping international buyers get the instrument they want. Ive missed out on quite a few vintage guitars over the years because people would sell internationally (im in New Zealand)...anyway the point is, whenever I find someone who will go the extra mile, im more than happy to pay top dollar so I feel confident in the seller, the guitar, and a comeback should anything go wrong.



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stan thomison
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PostPosted: Wed Nov 21, 2007 10:12 am 
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What Rick and others have said and particular countries is right on. I was an investigator of alot of this a few years ago and did UC work in it. This was not for guitars and included things not legal anyway. But where one thing is with crooks, you find others. After more than 25 years and maybe more than 1/2 UC , you learn alot. If there is a way to get ripped it is in this are they will find it, and they keep one step ahead of the investigators, believe me. I was part of task forces and it just got better and better as the net evolved for them. Bitter you bet
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Kevin Gallagher
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PostPosted: Wed Nov 21, 2007 5:19 pm 
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Koa
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Posts: 1041
Location: United States
   I've shipped almost 200 guitars overseas to the east and west. I've
never had a single problem with any of the buyers, but I had
nonnegotiable policies that i've never strayed from.

   First, the only payment method that I ever accept for overseas
purchases and that is a direct funds transfer to account set up and
maintained for that purpose only.

   Once funds have been received and confirmed, they are transferred to
another account.

   I don't charge shipping for international purchases, but have the
customer set up a pickup with either UPS or DHL on their own account.
This eliminates any possibility of my misquoting shipping and either
overcharging them or leaving myself short on it.

   This policy also allows them to secure their own insurance and to
decided on the amount for the insurance.

   The receiver is responsible for duties ad transfer fees so you don't have
to worry about those. Be glad because that's a whole bureaucratic and
political mess of its own and it;s best left out of your lap.

   It is important that you provide a detailed description of the guitar
including materials and value so that there is no question as to the fact
that it isn't protected or endangered material that will inevitably be
confiscated. Things have changed a bit for obvious reasons in recent
years and many more items are stopped now than ever before.

   I don't ship Brazilian Rosewood over seas simply because of the
possibility that a customs worker may actually know what they're looking
at and if it is misrepresented on the invoice, I'm in trouble along with my
customer. I have had a pair of dealers of my guitars ship more than a
dozen Brazilian Rosewood guitar to Japan and how they handle it is their
business and I've never asked.

   We are cheap worldwide now so guitars that were out of reach to much
of the world's custom guitar buyer base a decade ago are well within their
reach now and they're taking full advantage of the dollar's loss of clout.

   The harmonized tarriff scheduls and codes are almost as big a joke as
NAFTA itself, but are pretty strictly enforced and observed so get ready
for alot of tedious paperwork.

    Check it and double check to be sure it's all filled out correctly because
they don't care at all if your product ever reaches its destination. It can
add months to the shipment of a guitar if things aren't classified correctly
so study the UPS site and get familiar with all of the treminology and
purposes for specific classifications before you ship.

    Once you've done it a couple of times, the forms can almost be copied
for one guitar to another with the exception of a few specifics, but it
never turns into less paperwork.

Have fun,
Kevin Gallagher/Omega Guitars
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pakhan
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PostPosted: Thu Nov 22, 2007 1:13 am 
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Kein and Rick have outline most of the pitfalls. If you need the inside on anyone, give me a shout, I'm now based in Singapore and Jakarta so I know most of the punters around! Be glad to help an OLFer.

Warmest regards,
Terence
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douglas ingram
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PostPosted: Thu Nov 22, 2007 2:30 am 
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What Kevin and Rick said.

Establish a bank account specifically for international bank transfers.  Clear the money, then transfer the money out.

It's a big headache to do all the paperwork the first few times, but gets a little easier with practice.  I'd suggest that you make up a sample set of documents to keep on file, which you can refer to whenever you need to.  Its so easy to forget all the details that you've worked so hard to figure out.

There are a lot of helpful and honest people in the world (most), too bad there's enough who are not to foul our trust in people.


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Brock Poling
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PostPosted: Thu Nov 22, 2007 2:39 am 
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[QUOTE=douglas ingram] What Kevin and Rick said.Establish a bank account specifically for international bank transfers.  Clear the money, then transfer the money out.[/QUOTE]

If you tell the bank what you are doing most are already set up to handle these type of transactions. You will not have to set up a separate account.

There may be a service fee but I would just factor that into the final delivery/shipping charge.


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http://www.polingguitars.com
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douglas ingram
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PostPosted: Thu Nov 22, 2007 3:18 am 
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It depends upon the bank and what services that offer.  If there is no special service for what you need to do, the simplest option is the account just for international deposits.

When I had to take an international order from Germany, the client was sending payment as a money transfer.  The money was actually moving, but the sending bank needed the codes for my bank and the account number.  I was not in contact with his bank directly, so the client was an in between, and I had to provide access codes.  I was not about to provide a code for an account with anything in it.

If a bank can offer a simple, safe, and affordable method, of course use it!  Mine didn't have any option better than what I described above.


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Ricardo
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PostPosted: Thu Nov 22, 2007 3:25 am 
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Isn't Paypal of any use here?

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Hank Mauel
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PostPosted: Thu Nov 22, 2007 5:16 am 
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[QUOTE=Hodges_Guitars] This has actually come up on another post, but I didnt want to sidetrack that post. For those of you who sell Internationally, what problems or pitfalls should I look for? Are there any tax issues or other import/export pitfalls that I should be aware of?[/QUOTE]

Ken....
I have a detailed write-up of a scammer I played with a few years ago. It was a Nigerian inquiry wanting 4 guitars, using quotes lifted from my web site. Since I was feeling particularly "nasty" that day, I figured I'd have some fun. I documented the entire play, which ran for several months. It's kind of lengthy, but if you'd like a copy to chuckle over, I'd be happy to PM it to you.

All that has been said elsewhere in this thread is spot on! These folk have nothing better to do than sit around some internet cafe all day, with fictitious email addresses from Hotmail, Yahoo, etc. and ply their scams. And surprising enough, the latest one I received two weeks ago came from Australia...not a country known for questionable practices. But I guess hope springs eternal in the minds of crooks.

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KenH
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PostPosted: Thu Nov 22, 2007 11:49 am 
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Hank, I would love to read what you have, if for no other reason than to be aware of the scam methods. In the indonesia/singapore/malaysia market I am hoping to get into, there are at least one other OLF'r and possibly 2 that are already there. I was hoping to hear from them on their experiences. They may be going through a middle man, broker, or dealer, which would eliminate any problems.


Thanks one more time for all of the good advice!


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Ken H
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Brock Poling
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PostPosted: Thu Nov 22, 2007 12:16 pm 
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[QUOTE=douglas ingram] It depends upon the bank and what services that offer.  If there is no special service for what you need to do, the simplest option is the account just for international deposits.When I had to take an international order from Germany, the client was sending payment as a money transfer.  The money was actually moving, but the sending bank needed the codes for my bank and the account number.  I was not in contact with his bank directly, so the client was an in between, and I had to provide access codes.  I was not about to provide a code for an account with anything in it.If a bank can offer a simple, safe, and affordable method, of course use it!  Mine didn't have any option better than what I described above.
[/QUOTE]

Yeah, I agree, never give them your routing number and account number.

If you are banking though with a big firm (I work with Chase) they will give you a temporary account & routing number to post the cash to. I think this is easier for them than carrying the overhead of an entirely new account.


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PaulB
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PostPosted: Thu Nov 22, 2007 1:26 pm 
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Last Name: Burns
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Status: Amateur
[QUOTE=Hank Mauel]the latest one I received two weeks ago came from Australia...not a country known for questionable practices. But I guess hope springs eternal in the minds of crooks.[/QUOTE]

Oh we've got plenty of questionable practices here, Hank mate. Mostly in our houses of parliament.

They don't normally include internet scams tho.


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douglas ingram
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PostPosted: Thu Nov 22, 2007 3:48 pm 
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Forgot to mention that all goods must also be labeled with country of origin.  Its a big deal to those who check on these things.

My bank is a credit union.  Nice, local, friendly, but not with the access to big bank services, like Chase.


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Richard Wilson
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PostPosted: Thu Nov 22, 2007 5:10 pm 
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[QUOTE=Ricardo]Isn't Paypal of any use here? [/QUOTE]


I'm surprised at the level of complexity that is going on here when there's PayPal as an option. They take a few per cent for themselves, but the level of safety they offer is definitely worth it and unmatched by wire transfers or your own merchant account.


I've only once bought from an international tonewood supplier who didn't accept PayPal or another safe online means (i.e. credit card through a secure website etc.); it's the only time I've ever done an international wire transfer. It was needlessly complicated, expensive for me (the buyer) and according to the supplier (who has a pretty bad wrap on this site and others) it came through about 10% short so I don't know, it really turned me off the whole idea.


Not worth the fuss and I'd never buy or sell via that method again. PayPal hasn't once failed me and I've had many guitars purchased abroad using it.


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JohnAbercrombie
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PostPosted: Thu Nov 22, 2007 5:51 pm 
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[QUOTE=richo]

[QUOTE=Ricardo]Isn't Paypal of any use here? [/QUOTE]


I'm surprised at the level of complexity that is going on here when there's PayPal as an option. They take a few per cent for themselves, but the level of safety they offer is definitely worth it and unmatched by wire transfers or your own merchant account.


[/QUOTE]

PayPal is actually quite poorly set up for international transactions. They have quite short 'deadlines' for initiating a dispute process; with the 'usual delays' in shipping and Customs it's possible to 'run out of time' with PayPal. This is especially pertinent if one of the people involved is deliberately making excuses and playing for time.
This is probably more of a risk for the buyer than seller, but something to keep in mind nevertheless.
Although PayPal may be a good option, it not only charges substantial fees, but takes a good slice on currency exchanges as well.

On eBay, I've noticed many sellers who will not accept PayPal for international transactions - often they specifically state problems with PayPal policies.

John
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Kevin Gallagher
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PostPosted: Fri Nov 23, 2007 3:49 am 
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Koa
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Location: United States
    I've received notices from PayPal that my account has been revised or
limited several times over the few years that I used it. They even limited
my account once...and for no reason apparent to me...so that I could have
any amount of money deposited INTO my account in one transaction, but
could only WITHDRAW $500.00 once a day.

   I took a deposit of $12k and it took me a week to get $3k out before
they adjusted the account and allowed me to transfer it all to my bank
account.

   I dropped it and haven't use my account since.....and it has been
modified and limited in different ways a few time in the meantime.

Regards,
Kevin Gallagher/Omega Guitars
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JohnAbercrombie
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PostPosted: Fri Nov 23, 2007 4:14 am 
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Kevin-
PayPal doesn't miss a trick-
Send money via PayPal and your bank account is instantly debited; transfer money from PayPal to your bank account and it takes 5-10 days. Just multiply that by 100 million users or so- the corporate bean counters have figured out it means a fair chunk of change, even with low interest rates.

That said, I do use PayPal (few other options, and never for large amounts of money) but I haven't given up on complaining about it!

John


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