QUESTION ON Starting a Footwear Brand Distribution Agency in The Philippines
I recently saw a product (footwear) in the internet that I really liked. Since they don’t have a dealer here in the Philippines, I would like to be the one to sell them here on retail stores and also online. At first maybe I would just order a few pairs just to test the market and expand as the need arises. Would it be better to have it shipped here directly from the company, in terms of shipping fees, taxes and duties…or have it shipped somewhere in the US then forward it here via “balikbayan” boxes?….
– Alekhine, A, Philippines
Advice by Nach M Maravilla
Thank you for your email. The fast answers to your question are:
If the company ships to you directly, the shipment will pass through Customs (even if these are small shipments) and if they find that these are of commercial quantity, customs will impose duties and taxes on the goods. If you are lucky, you can claim the shipment by yourself otherwise you will also need a brokerage firm to withdraw the goods. That means an additional expense on your part.
If you are talking only of small quantities that you can fit in “Balikbayan Boxes” it would be much more advantageous or more profitable for you because you will not get involved with customs. The “Box” is delivered to your door without hassles. “Balikbayan boxes” are personal goods packages sent by Filipino overseas workers back to the Philippines, tax free. With the surge in Filipino overseas workers, the government enacted the law to allow for balikbayan boxes.
Talking about balikbayan boxes. How many pairs do you think you can fit in a jumbo box and how many balikbayan boxes do intend to fill. Every box will cost you a fix amount of say $100 each so you have to fill it up with as much pairs as you can so you can spread out the shipping costs. That would be a good start, however, how fast can you sell them and how do you plan to replenish the sizes that are sold and what do you intend to do with the sizes that remain unsold.
Footwear is a very lucrative business because as you know almost everyone wear them, however, the big problem is that you have to carry inventory of different sizes and styles and that means a big capital outlay. Are you financially sound to carry on with the project?
Another possibility is that you might start the promotions of the new product and then what happens if after a while that you sell some pairs in Manila, someone with funds come out to compete with you. How do you intend to protect yourself before that happens?
Hopefully, you have made the necessary study about the market and how you intend to make the business profitable.
If you need further assistance feel free to email. Good luck!
Nach M Maravilla
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