Trying to impro Naturoney honey into America Naturoney (is the company name)

Honey
Name
Institution / Affiliation
1.0 Trade transaction
1.1 Supplier Naturoney
Naturoney is a Canadian company specializing in pure and natural honey derived from numerous floral sources. The company was established in 1990 when three Canadian beekeepers united their 4,500 beehives. Its headquarters are located in Chateau-Richer, Quebec. For the past 30 years, the company has evolved become the leader in the processing of honey in Canada. The company’s product is available in numerous formats and private labels such as classic honey, tasting honey, and apitherapy (Naturoney, 2020). Some of the popular company honey brands include Quebec, Canadian, organic, Blueberry, Amazonian Mint, and Canadian buckwheat, all derived from natural 100% beehives products. The company has a broad customer portfolio, including supermarkets, retails stores, and hotels, to name a few. The company's distribution network includes 1000 clients in China, Canada, Hong Kong, and Japan. Currently, the company employs 20 employees in its facilities in Quebec, London (Naturoney, 2020).
Source. Naturoney
1.2 Terms of sale
Due to the relatively small volume and weight of the product, and the nature of the contract, the terms of sale will be Cost and Freight. In this arrangement, the supplier (Naturoney) will clear the consignment for export, deliver the goods to the vessel at the port of Quebec and pay for the transportation fees for the goods to the port in, in this case, the port of New York. I will assume the risk of the goods immediately they are on board the vessel at the port of Quebec. The reason for choosing cost and freight incoterm is that the volumes of the goods are relatively low, and the arrangement is convenient as it minimizes the hustle of the importer arranging for the transportation of goods in the foreign country. With Naturoney being in operation for almost 30 years and shipping across different countries like Japan and China, the company has established cooperation with transportation and freight forwarders thus reducing the lead times.
1.3 Quantity
Naturoney has not provided me with the minimum quantity of the product their buyers can purchase for a single transaction. With this in mind, I have decided to use a logical quantity that will ensure that I can exploit on insurance charges as well as cover up demand while waiting for the next consignment. Although Naturoney sells in both large and small formats, I will prefer the use of the small formats for the start of the project. I will import the number of small formats that will be equivalent to the half-space of a 20ft size container.
The size of a 375g of any Naturoney has the dimension equal to 13.72 x 7.87 x 4.32 cm. I will pack the products in international-sized pallets of the dimensions 101.6 cm x 121.9 cm that are readily available in Quebec, Canada. The products will be placed in cases, with every case holding a dozen products –that is 3x2x2. In height, I will assume that it will be viable to stack up to 10 cases giving a height approximately to 90 cm, which will be equivalent to 180 cases in a pallet. It means that every pallet will have 2160 375 g, organic honey. I will import four pallets which can comfortably fit in the 20ft container translating to 720 cases or 8640 of 375g organic honey. If the project succeeds, I will increase the quantity to fill the 20ft container as well as start importing the 750g package.
1.4 Purchasing and selling price
Amazon Inc. sells a package of 375 grams of organic honey at CDN$ 8.89. This is a price equivalent to US$ 6.84 (with an exchange rate of CDN$1 = US$ 0.77). Assuming Amazon makes a profit margin of 30%, that means it buys the product at CDN$6.84 or $5.27 per ever package. It means a purchasing price of CDN$ 5 would be reasonable, especially after factoring in quantity discounts. Considering transportation costs to the port of New York will be incurred by Naturoney, I believe a purchasing price of CDN$5.5 or $4.235 excluding taxes will be reasonable and practical to allow Naturoney cover up these costs. An estimated carriage insurance cost of US$500, fuel charges $60 every day for 14 days, bill of landing $500 and $250 handling charges will be incurred. To allow retailers to make a profit and remain competitive in the marketplace, I will charge them a price of $10 (excluding tax) per 375g organic honey package. The retailers can add a markup of 20%, tax exclusive. This price will be competitive, given local competitors like Amazon Inc., charges a price over $20 in the United States markets.
1.5 Delivery
Naturoney will facilitate the transport of goods from its facilities in Chateau-Richer to the port of Quebec. The distance between the Chateau-Richer is approximately 27km via road (Google maps, nd). Due to the short distance between the port and processing plant as well as convenience, the company will use trucks to transport the consignment from the firm to the port of Quebec. Although there is a river adjacent to the company (River Lawrence), Naturoney should use road transport because it is faster and relatively cheaper.
1.6 Packing
Naturoney products are packaged in practical packages that make their products appealing and easy to use (Naturoney, 2020). Given the nature of honey is not easily perishable, no special packaging that will be required for this consignments. I will negotiate with the company to repack the natural honey into carton cases, each holding 12 packages of the product. The company will also ensure that products are well placed into the pallets to avoid any possible damages of the product.
Because Naturoney products are packaged into strong bottles, chances of damage will be relatively low. I will not repackage the product as the packages are appealing and can be sold in any market. This will minimize additional costs that would otherwise be transferred to retailers and ultimately to the final customers. Products delivered to the port of destination while damaged will be returned to the supplier or else be sold at relatively lower prices. When the project succeeds, I will request the Naturoney for customized packaging, a service the company offers to its customers.
1.7 Shipping
Under the Cost and Freight terms, Naturoney will be responsible for the transportation costs of the consignment up to the port of New York. I have preferred to use the port of New York because of its proximity and the availability of vessels that dock from Europe and Canada. It would take an average of 7 days for goods to be delivered to the port of New York as compared to 32 days the ship would take to dock to the port of Los Angeles (Freight Calculator, nd). Because I want to import biweekly, I believe New York port will shorten the lead-time.
To minimize the costs of transporting the products to other states, I will tap into the New York market for the start of the business. If the project succeeds, I will transport the products to other regions. Besides, I will negotiate with the supplier to use a reliable shipping company that will ensure the safety of the products. For this project, I will prefer to use Maersk Line due to its large fleet of vessels spread across the globe, relatively lower costs, and its reliable services. This means at any given time, I will be guaranteed delivery with shorter lead times. I have shipped some products with Maersk line, and without any doubt, it has exceptional services.
1.8 Insurance
Bad things happen to good cargo. It is not always possible to protect cargo from loss. In reality, the number of containers lost every year at sea is ever-growing. Insuring consignment helps in protecting the value of the goods against potential losses and damages that happen during transportation. That is, it helps reduce financial loss due to damage to cargo. For this project, the consignment will be insured while at sea and land. Although the probability losses and damages are very minimal, I would prefer to insure the products as a potential loss of the goods can be deplorable at this stage of the business. With this in mind, I shall insure the consignment with RLI Corp at the cost of $1,500 for a comprehensive cover (RLI Corp, 2020).
Part 2
2.1 Trade transaction two
Transacting abroad can be risky, mainly because the buyer and sellers may not necessarily know each other. In reality, many buyers have been scammed and ended up buying air. Similarly, sellers have lost their precious goods to buyers who end up not paying for goods supplied. Different payments terms, including cash in advance, letters of credit, documentary collections, open accounts, and consignment, to mention a few. Being in operations for nearly 30 years, Naturoney is a reputable corporation recognized by the Canadian government and large corporation such as Amazon Inc. For example, the company is certified by the FSSC 2200, Écocert Canada and Mk Pareve. With this in mind, I will use cash in advance in wire transfers to pay for the goods. This will allow Naturoney for quicker processing of fulfilment of orders placed.
2.2 Documentation in the United States
2.2.1 Commercial invoice
The commercial will be issued by Naturoney and will describe the products imported, the quantity of the products, country of origin, name of the company selling the products, address where the goods will be shipped to, and value of the products in dollars. The commercial invoice is used by Customs and Border Protection officers to determine whether products are admissible to the country. The invoice will give detailed information about FDA regulated products as well as tariffs.
2.2.2 Packing list
Naturoney will also provide a packing list to show the list of products shipped and matches the invoice. The Customs Border Protection will use the packing to verify the consignment.
2.2.3 Bill of Landing
Maersk will provide with a signed Bill of lading acknowledging receipt of the consignment. Besides, the document acts as a contract of carriage and commitment by the vessel owner to deliver goods to the port of destination along with the conditions in which chosen transportation is made (Customs, U. S. & Protection, 2013).
2.2.4 Arrival Notice
After the vessel docking the New York port, Maersk will give an arrival notice to show the products that have arrived. It will include the description of the commodities that have been accepted, charges that need to be paid for clearance of the products, and the cargo units that have been delivered. The arrival notice will allow me to take ownership of the products upon clearance of customs. To minimize the costs, I will clear the products myself without relying on clearing and forwarding agents.
2.2.5 Custom duty
Natural honey is listed in the HTS category under the HS Code 04090000. Natural honey imported into the United States from Canada, Africa and other E...