6 ways to reduce costs while importing from Mexico

6 ways to reduce costs while importing from Mexico

Many businesses have made fortunes importing from Mexico and the trend still continues on! This has inspired many individuals and SMEs to take interest in importing good from Mexico to sell in the US. When we look back the years, it is easy to see why many prefer Mexico for starting their trade business. In 2018 alone, imports from Mexico amounted to $371.9 billion.

The numbers kept on adding up and this made Mexico the top trade partner of the US as of August 2019, crossing Canada and China in the process. Just two years ago, in 2017, Mexico was ranked third in the list, and the rise to the current top position shows how strong the trade ties are between these two countries.

Trade is certainly expensive, but the effort is well worth it when you start selling your imported goods in the market. However, as any successful businessperson would tell you, one of the key ways to maximizing profit is by lowering expenditure at every point in the whole process right from imports to transportation to distribution. In this article, we will list out 6 ways you can reduce costs while importing from Mexico.



1.   Pick the right exporter from Mexico

When you are looking into importing from Mexico, you would be in talks with many manufactories in the country. The first step is to find a reliable manufacturer or exporter who makes reasonable proposals. We wouldn’t advise you to pick the cheapest option available as it can lead to the products being of the same caliber.

What you should do is spend time researching the different exporters in Mexico and picking the right one that offers you quality products on which you can make a profit here in the US. There are also many standards that you can use to gauge the quality of the exporters and if they comply with ISO standards, it is a great start.



2.   Leverage the geographical advantage that the US has with Mexico

One of the key advantages of trading with Mexico is that Mexico and US share the same border. This has a profound impact on lowering transportation costs.

This also means that you can visit Mexico in person and meet your trade partners. You can validate the quality of the products and see whether it fits your requirement. Flight hours between US and Mexico is around 4 hours.

If you were to conduct the same business with someplace like China, or anywhere in Asia, the transportation costs and time would be significantly higher. So when making sure that you visit the place and pick the right trade partner to get the best products at low prices.



3.   Order in bulk: Get more for less

Another way to make the most out of transportation costs is to order your products in bulk. The advantage of ordering in bulk is twofold.

First of all, you are getting more products for the same or slightly higher transportation costs. This lowers the overall price per piece.

Secondly, it lowers the overall freight cost that will incur to reach a particular stock limit. Once you order large quantities of products, you also lower the risk of selling out. Add that to the fact that you will be paying less in upfront fees, it is an overall great deal.



4.   Enable Faster speed to marker times

Goods do not bring cash flow when they are sitting still. The process of money-making starts when the goods are in the hands of the end-user. So when you import goods from Mexico, keep the idle time for the goods as low as possible.

Make sure that you have a robust and reliable supply chain ready to distribute the products as soon as it arrives.



5.   Use FTZs or Bonded warehouses

The recent tariff hikes have not been good for many who import goods from Mexico. Hence, importers have to look for new and safe ways to cut corners. And one of the best ways is making use of Bonded Warehouse and FTZs (Foreign Trade Zones)

There has been a huge demand for bonded warehouses and FTZs near the border. You should also look into these establishments as they allow the importers to delay paying the duties to a later date or avoid them completely if they are re-exporting the goods.

Bonded warehouses are private owned storage spaces approved by the government. FTZs are also privately owned storage spaces but goods that are stored in the FTZs are not considered to be in the US, hence there is no required to file customs entry until the goods are used in the US.

When you are importing from Mexico, such facilities benefit you greatly in reducing the need for upfront costs until your goods are moved for consumption.



6.   Finding a reliable customhouse broker

When you are entering into the world of trade, it can get quite confusing because of all the alien terms and regulations that are going to hit you all at once. At these times, it is critical to have a helping hand.

Customhouse brokers make the arduous task of trade easy. Since they are vested in the business, the team will be familiar with all the procedures and specifics of importing from Mexico. When you select a customhouse broker be sure to look for:

Experience: They must have adequate experience in facilitating trade between the US and its trade partners.

Warehouse services: They must be able to provide you with storage services like FTZ, Bonded Warehouses, and general warehouses.

International connectivity: The customhouse broker must be able to connect you to different regions around the world if need be.

Transportation services: Helps you in the movement of goods from Mexico to the US.

All-round support: They must be ready to help you through every part of the process.





Knowing the specifics of the trade is the key to reducing your costs when importing from Mexico. If you are new to the business or someone who is struggling to manage business and trade together, we can help! Pedraza Customhouse Brokers have more than 10 years of experience in facilitating trade between the US and its trade partners.

We provide comprehensive care for our clients, helping them through every step of the process. Contact us today and we can discuss methods to structure your trade business for more profit whilst upholding the best quality standards.

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Pedraza Content Team

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