Manage the risks of importing
Manage country risk for imports
Conducting business overseas always carries risks. The business culture may be different, or there may be different regulations that you aren't aware of. The risk of confusion can be particularly high if your suppliers speak a different language.
Different countries can also present other potential problems. For example, a country could suddenly introduce new export controls, be subject to new UK import controls for some types of goods, or suffer a natural disaster.
Market research is an important way of reducing these risks to your business. The more you find out about a country and its politics, economy, culture and business environment, the less likely you are to get caught out by unexpected problems. Read more about researching and entering overseas markets. It's important to remember to keep up to date so that you know when things change.
A clear agreement, using internationally accepted Incoterms to set out exactly what delivery terms you have agreed, also helps to reduce the risk of confusion. Read more about the basics of international trade paperwork.
Levels of risk when importing
The risks vary, depending on which country you are dealing with. In general, countries within the EU are the safest, while some developing countries can be much riskier.
Investment promotion and protection agreements (IPPAs) can help to reduce the risks. A country that has signed an IPPA with the UK agrees not to treat UK businesses unfairly.
Whatever country you are dealing with, you should try to have a contingency plan in case things go wrong. If the risks are high, it's sensible not to commit yourself long-term to sales or prices that rely on these imports. Unless you have local expertise, you may decide that some countries are simply too risky to deal with at all.