Exporting US Liquidation Merchandise to Honduras

Building a brand and growing your market footprint as a liquidation company often includes searching for customers outside of the country’s borders. Nowadays, the online presence of many liquidation companies has also encouraged foreign buyers to order pallets of US liquidation merchandise more often than before. The market is becoming more efficient and global, but there are still things one has to pay attention to in order to comply with all the regulations in place, either in the United States or the country where you plan on exporting to.

Exporting pallets of US liquidation merchandise to Honduras, for example, will require some planning. You certainly will have to look into the market conditions, assess the market potential, the demand and the buying power of your potential customers. The positive thing in the process is the price range of liquidated merchandise, which can be found for pennies on the dollar and you could often cater for any type of market. Striking a deal with a partner in the destination country will certainly increase your chances of securing a market share over there, but only if you work with reputable partners.

It is essential to contact the relevant authorities if you plan on exporting pallets of US liquidation merchandise to Honduras to make sure you cover all the bases and take the steps required. This article will go over these steps, although it is by no means an official document, but rather a guide to what is necessary to export merchandise from the United States to Honduras.

Exporting to Honduras

Sending a letter to another country is a simple procedure: write the address on the envelope, put a stamp on it, get it in the mail. But exporting larger quantities of goods is not as simple. A lot more that goes into it. You might want to research the market yourself as part of an effort to expand your business, but you’re not really going to commit to it unless there is a healthy demand to support it. You might also consider exporting a pallet or two if you receive an order from an online buyer from Honduras. Whether you are catering to a single customer, or plan on running a larger export operation, you are required to follow procedures and fill out documents.

The commercial invoice is the first document you will have to complete. This is the bill a seller provides to the buyer and determines the value of the merchandise you are exporting. Often governments will use these commercial invoices to determine the value and the customs duties on the merchandise being exported/imported. Often the countries will provide instructions on the type and the information that should be included and provided in the document.

You could also come across a pro forma invoice, which is often used as an offering of sale or a price quotation, provided by the seller to the buyer even before the merchandise is shipped. A pro forma invoice includes similar information as the commercial invoice and informs the buyer about the value of the merchandise as well as other specifics.

Very often countries will require you to provide an export packing list. If you are familiar with how liquidation companies, especially reputable ones like Direct Liquidation, operate, you will recognize that this export packing list is an expanded version of a pallet or lot manifest. Besides the information about what is contained in the pallet, an export packing list will also include information about the seller, the buyer, and the shipping company, as well as the invoice number, mode of transportation and relevant dates. The product descriptions can also be a bit more extensive as they will include not only the type of product but also the package type, the quantity and the total net and gross weight of the pallet in kilograms. While the information in an export packing list is similar to that contained in a commercial invoice, there are differences and it certainly can’t be used as the substitute for a commercial invoice. It is often used by the authorities to verify the contents of the cargo.

But there are also transportation documents you will have to provide and fill out. These often start with an airway bill or a bill of lading. An airway bill is specific to an air carrier, but, in general, it is similar to a bill of lading, which is a contract signed between the owner of the merchandise and the courier company. There are two types of bill of lading if you are exporting your US liquidation merchandise by ship. There is a straight bill of lading, which is non-negotiable, and there is also a negotiable or a shipper’s order bill of lading. This bill can be traded with, meaning it can be sold or bought while the merchandise is in transit. Once at the final destination, whoever the customer may be, they have to provide the original bill of lading in order to take possession of the merchandise.

Besides the bill of lading, you will have to complete the electronic export information filing. Previously known as shipper’s export declarations, this document, considered the most common of all transportation documents, is required for all shipments above the $2,500 valuation mark, but also for merchandise that requires specific permits and licenses. The electronic export information filing is completed through AES Direct, an online platform set up and run by Customs and Census.

As for specific documents, such as permits and licenses, some countries will require you to provide specific export licenses issued by government bodies. These include export permits for items such as nuclear material. In addition to these export licenses, some countries may require you to provide a certificate of origin. The best advice we can give when it comes to the documentation is to contact either the local authorities or the authorities of the country into which you plan on exporting the merchandise to find out more about any specific requirements that could be in place for the items you plan on exporting.

Honduras is part of the CAFTA-DR, a free trade agreement signed by the United States with a group of countries that also include Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. I order to obtain all the advantages agreed under the FTA, US exporters are required to partner up with a Honduras importer. The importer is responsible for proving the merchandise being imported is in accordance with relevant rules of origin.

It is essential to provide accurate documentation since Honduras requires a specific certificate of origin for imports from the United States in order to certify that the products are eligible for preferential treatment under the CAFTA-DR. The documentation will be reviewed by the Honduran Customs Authority (Dirección Adjunta de Rentas Aduaneras – DARA). In general, you should provide the name of the certifying person together with their contact and ID information, tariff classification under the Harmonized System and the description of the goods, information demonstrating the origination of the goods, date of certification. In the case of a blanket certificate, you have to provide the period throughout which the certification is applicable, no longer than one year.

While Honduras is in the process of modernizing its customs procedures, it is essential to consult with relevant authorities to make sure you are complying with all the regulations and providing all the required documentation. This is especially the case if you plan on exporting/importing raw and processed agricultural products or pharmaceutical products.

Tariffs and Restrictions When Importing into Honduras

Being a member of the CAFTA-DR agreement, Honduras enables 100 percent of US industrial and commercial goods to be imported duty-free. Even the tariffs on agricultural products are set to be phased out by 2020.

Honduras is also a member of the Central American Economic Integration System (SIECA) comprised of Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama, meaning that tariffs on most imports outside the SIECA are within the 15 percent range.

A valuable piece of information is that seasonal goods such as clothing (textile and apparel goods) that are compliant with the CAFTA-DR’s rules of origin can be imported duty-free. Make sure you check whether such products are compliant with the rules since Honduran customs are very strict when reviewing certificates of origin and any errors can result in fines. The value-added tax (VAT) rate applied to most products is 15 percent. There are, however, some goods that are exempt from this tax, such as fuels, medicine, books, and computers, among others. Honduras applies a separate 18 percent sales tax is to beer, brandy, compound liquors, and other alcoholic beverages, as well as tobacco products.

As a CAFTA member, Honduras pledged to remove any import barriers, although reforms are still ongoing. The country still limits imports of rice and corn in order to protect domestic production, and besides special tariffs and permits required for such merchandise, investment in tourism and banking services also requires special permits. However, since the article focuses on exporting US liquidation merchandise into Honduras, this is not likely to pose a problem.

What is Liquidation Merchandise?

So, what is this liquidation merchandise and why is it appealing to other markets? In general, US produced goods are regarded as the best value for money and this reputation has created a strong customer base around the world.

Liquidation merchandise has other factors in its favor, the most significant being the reduced prices. This is due to the way and the reason products are liquidated. For example, when a customer orders clothing online, they are not able to try the item out and see whether it actually fits. Yes, there are measurements usually in the product description, but nothing beats trying the product personally. Upon delivery, the customer might not like the product, it might not fit well or simply it might not be what the customer expected. These are all reasons why these items could be returned to the seller.

But it is not only customer returned items that get liquidated. Often you’ll find retail stores clearing out shelf space for new merchandise at the turn of the season. This is the time when huge overstock or closeout sales are set up. Overstock products are usually a result of a mistake when a store manager misjudges the demand and orders excess amount of a product, and portions of the total volumes ordered never leave the storage. Those products that do get displayed but remain unsold are offered through closeout sales. In both cases the merchandise is new and these are the products that often have the highest resale value and have the highest market appeal.

What is the Best Liquidated Merchandise?

But what sort of products should you buy? What is the best type of merchandise for you? This is a question only you have the answer to. The products you should go for depending on the market you operate in, and the type of products your customers demand. The best part is that there is something for everyone, from refurbished merchandise to scrap products that can be obtained dirt cheap and used as spare parts in other projects.

How Does a Liquidation Resale Business Tackle Quality Issues?

We did mention that there are scrap products sold through liquidation companies and liquidation platforms, and the truth is the majority of products are liquidated without prior testing. But this does not have to mean that the quality of the products you are getting is low. Doing some research before making any purchases goes a long way towards securing quality items for your business. If you are dealing with reputable liquidators, this certainly increases your chances of securing higher quality products.

In addition, Direct Liquidation stocks merchandise from top retailers such as Walmart, Amazon and Target. This again is a sign that the quality of the products, as well as the services, are on a higher level. To stay completely on the safe side, you have the option of requesting a manifest. We have previously mentioned the export packing lists; a manifest provides similar information and enables you to know what you are buying. It provides information on the type, the number of products as well as the condition of the merchandise. All this is put in place in order to ensure you find the products you need and the quality you are looking for. If a liquidator is withholding information, it is better to look elsewhere.

In terms of services and quality assurance, top-tier liquidators will slap on a 90-day warranty on any refurbished products that are put up for liquidation after being checked and brought back to original condition by the liquidation company’s service department.

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Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

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