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Fundamentals of International Trade March 2014

Importing Korean BB-Creams into the USA


Audrey LANGEVIN Cihan AYDIN Ibtissem HADDAOUI Jeff LIAO

Export / Import and Reasoning


Product: Korean BB-Creams Selling points: Korea-China town in CA CVS

Target
Tariff code: 33049910 Company name: BB-VANA Employees: 4 partners (Jeff, Audrey, Cihan, Ibtissem)

Country of Focus
Primary destination place: USA: California Las Vegas/Nevada

Reasons:
Dense Asian population in CA Korean dominance on cosmetics products Fast growing market in Asia, we want to bring it into the USA. Deep absorption capacity in USA/CA.

Powerlink Logistic Inc.


a.) Ocean Freight Services

- Full Container Load (FCL)


- Less Container Load (LCL) - Documentation prep & Customs clearance b.) Air Freight Services - Air Freight Consolidation (indirect carrier) - Air Way Bill (AWB) Issuance - Documentation Preparation (Abroad/Domestic) c.) Inland transportation pick up / Overseas export

Powerlink Logistic Inc.(2)


d.) Assistance identifying Duty (Tariff), Taxation, import/export

requirements
e.) In-House Customs Broker f.) Warehouse capacity g.) Owner: Polly Yang (50years experience Trans-Pacific-North American trade)

www.powerlinklogistic.com

Projected Import Details


Manufacturing Location:

Korea
Port of Destination: Long Beach, CA. Method of Transportation: Via Ocean from South Korea into USA CY to Door (Forwarder handle) Delivered to customers from warehouse via designated methods (Trucking to customer warehouse/stores)

Projected Import Details (2)


Delivery terms/Incoterms:

FOB (Free on Board) / FOB BUSAN

The freight, insurance and inland charges handled by ourselves.

Projected Import Details (3)


Number of product to import:

28,500PCS
Projected Export Details / Container Dimensions Product Dimension: a.) Without packaging: 13L X 9W X 4H (cm) / 0.08KGS b.) Packed Dimension: 15L X 10W X 5H (cm) / 0.09KGS

Projected Import Details (4)


Packaging Dimension:

a.) 150 inner packs per master carton (150pcs)


b.) Master Carton Dimension: 75L X 30W X 50H / 13.5KGS c.) Master Carton Measurement: 0.13 CBM per master carton

Shipping Plan: a.) 28,500PCS / 150 = 190 Cartons b.) 190 Cartons X 0.13 CBM = Approx. Total 25 CBM c.) 190 Cartons X 13.5 KGS = Approx. Total 2,565 KGS d.) Container Dimension: Ship via 1 x 20FT Container

Projected Cost
Landed Cost: a.) Buying price US$ 1.85/PC (FOB Busan) x 28,500 = $52,725 b.) Freight (Korea/Busan USA/Longbeach) US$ 2,500.00

Projected Cost (2)


c.) Forwarder Brokerage Charges Total US$ 1,420.00

Customs entry/FDA/USDA Fee: $150.00


Customs Merchandise Processing: $ 300.00 Customs Harbor Maintenance Fee: $ 360.00

Single entry Bond: $ 250.00


Document Handling Fee: $50.00. Messenger Fee: $35.00

Importer Security Filing: $35.00


ISF BOND: $65.00 AMS Fee: $25.00 (automated manifest system) Full Service Charge by shipment: US$ 150.00

Projected Cost (3)


d.) Trucking Charges Port to Warehouse (20FT Ctnr) US$ 130.00

Port Pierpass: $ 66.50 Port Cleantruck: $ 35.00 Chassis Fee: $ 25.00 per day

Projected Cost (4)


Expenses:

e.) Warehouse Charge (Powerlink Warehouse)


-Warehouse Storage (Monthly): $ 500.00 Warehouse Handling Charge (By shipment): $ 1500.00

f.) Office Expenses -Rent: $ 1,800.00 -Utilities: $ 150.00 -Telecom: $ 150.00 - Furniture: $ 2,500 *RISK FACTOR NDC CODING (FDA Requirement)

Projected Cost (5)


Total Landed Cost: $ 56,775.00 Total Expenses: $ 6,600.00
Landed Unit Price: US$ 2.22/PC Profit Margin (45%): US$ 4.05/PC Profit for full sold quantity: $ 52,155.00

Sources of Capital Investment


Family & Personal Friends (Potential partnerships) Personal Savings Potential Investors (ie. Corporations looking to merge into cosmetic/drug industry) Bank Loan Factoring Agents (Strong customer source, however only a short term solution) Credit Insurance (For future development)

End Users
Korea-China Town beauty shops

CVS Pharmacy

Target

BE-VANA online shopping

The One Page Business Plan


VISION:

BB-Vana is a fresh and energetic Cosmetics distributor that provides high-quality Korean BB creams to women.

Within 2 years BB-Vana will become a locally recognized pioneer in the implantation of high-quality Korean BB Creams in California, providing to the women the unusual opportunity to take care of their skin by using their favorite Korean BB creams.

The One Page Business Plan


MISSION:

Enhancing, hydrating, sublimate the skin by exclusive and high-quality formulas.

The One Page Business Plan


OBJECTIVES:
- Achieve

2014 revenue of $1 million; profit before tax

$200.000 - Achieve profit margin of 50%

- Increase sales up to $1.5 million by selling products in


more Californian stores - Add 3 products more to the range

- Book $400.000 in orders on the online shopping website

The One Page Business Plan


STRATEGIES:
Develop professional team for logistic of goods at a warehouse in Long
Beach/San Pedro Attend 5 Cosmetics trade shows in 2014/2015 Cultivate relationships with the end users Maintain a long-term agreement with manufacturers Become the specialist in high quality Korean BB Creams See the link:http://www.amazon.com/s/ref=nb_sb_ss_i_0_9?url=searchalias%3Daps&fieldkeywords=bb+cream+korean&sprefix=BB+Cream+%2Caps%2C256

The One Page Business Plan


ACTION PLANS:
Develop an online after-sales service
Update daily the website Settle a lottery for winning products online Create a Facebook/Twitter/Linkedin/Instagram Pages Hire 20 interns for street marketing sessions in California where the product is sold Contact 5 beauty magazines; present products effects for publication Register on Salesforce.com CRM

Strengths
Korean High-quality formula BB Creams, unique on the Californian cosmetics market Products already well-known, which already are used by women in Asia Take advantage of the Korean know-how Presence of our BB Creams in strategic outlets of California: Korea Town & China Town shops, CVS Pharmacy, City/Target (all have a

cosmetics/hygiene department) for a good visibility

Strengths (2)
Online shopping website with easiness payments

Warehouse on the San Pedro port which facilitates reception of


goods and speed of delivery Easiness of carrying goods thanks to resisting packaging After-sales service in Los Angeles Presence on social medias : Facebook, Twitter, LinkedIn, Instagram

WEAKNESSES
New company on the Californian cosmetics market Find manufacturers as we are a new distributor on this market Make the manufacturers/retailers to trust us and be satisfied about our collaboration Make agreements with retailers : Korea Town & China Town shops, CVS Pharmacy, City/Target

Costs of import

Opportunities
No existence of the BB creams we are selling on the

Californian Market
Lots of Asian women living in California American women trust Korean cosmetics products

Lots of cosmetics tradeshows organized in California


Flexibility of cosmetics import process

Threats
Competition with other international cosmetics brands in Californian

outlets
Competition with other Asian cosmetics brands in Korea Town & China Town shops

Saturation of the US cosmetics market


Environment associations against cosmetics components

Thank you!
Questions?

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