Do You USFOB?

Two hundred mildew-coated Christmas balls. Or, more accurately, 350 Christmas balls — 200 of which were coated with mildew. Welcome to USFOB 101, or How Not To Learn About Direct Importing the Hard Way.

My first market trip was more than 12 years ago, to the National Stationery Show in New York, where I fell in love with pewter manufactured in and shipped from Austria. As I swooned over the line, a more seasoned storeowner carefully led me by the hand to the vendor's booth and asked about something I'd never heard of… a USFOB.

USFOB stands for U.S. Freight on Board. In simple terms, it means there's an agent here in the States who represents a foreign-produced line. That person is responsible for checking merchandise for accuracy of orders and damage, and dealing with U.S. buyers.

My storeowner friend asked questions about tariffs, freight, exchange rates and other mysterious things that had never crossed my mind. In the end, I walked away confident that she'd helped me dodge a bullet. (Thank you, Carol Chusid.)

Unfortunately, a few years later my memory lapsed, dooming me to learn these lessons the hard way. Thus, the mildew-coated Christmas balls.

I'd placed an order in an Atlanta showroom for three hundred and fifty gorgeous glass Christmas tree ornaments: clear, hand-painted balls with lace-like patterns, which would be shipped direct from a European manufacturer.

However, by the time I got home, it became clear that the order fell outside what we'd planned for our holiday window. Within 24 hours I swallowed my pride and called the showroom to cancel the order. Much to my surprise, there was no answer. So I faxed the cancellation not only to the showroom, but also to the overseas number on the paperwork.

Imagine my surprise when, months later, four gargantuan boxes arrived, direct from overseas, filled with — you guessed it — 350 Christmas balls in questionable condition.

This led to frantic phone calls to the showroom (the number had now been disconnected), additional calls to the overseas number (which no one answered) and one giant bill in one of the boxes. It was my first lesson on the risks of importing direct.

Lesson number two came a couple of years later in the form of beautiful, blown-glass paperweights that looked like river rocks. This time around, I asked pointed questions about telephone availability, quality control, freight and other mundane concerns. After being assured that all would be well, I placed the order, signed the form and entered the purchase into my open-to-buy budget.

Needless to say, I got quite a shock when my Visa statement showed that the agreed-upon dollar amount had ballooned about 150 percent due to a fluctuating exchange rate.

This is not to say that all direct importing is bad; I deal with a number of foreign vendors (based in Canada, which may or may not be significant) who are wonderful, reliable, conscientious and have never caused me consternation.

Any time I fall in love with product that ships from overseas, my first question is “Do you have a USFOB?” Why? Because those golden letters offer me someone who answers the phone within three hours of my time zone, speaks English, and can service my account, whether it's a change in ship date, quantity, items or any one of a number of difficulties that can occur with an order.

I know some are thinking: “Our orders never have 'difficulties' because they're thought out in advance.” But there can be damaged items, misshipments, substitutions, over-counts, under-counts and, well, mildew — any of which can happen to the best of plans. In addition, exchange rates that are not locked in can turn a good buy into an extravagant blunder. There are myriad possibilities that might plague even the most organized, well-thought order by the most experienced buyer.

When considering direct importing, keep these points in mind:

• Ask for a phone number, if there is someone at that number who speaks English, what hours they answer phones and how many hours ahead of your time zone they are — a 5 a.m. phone call is part of the deal.
• To avoid paying multiple overseas freight bills, spell out the terms in writing on the order form: “ship complete,” “no subs,” “no backorders.” Get a firm cancel date.
• When filling in dollar amounts, whether on a credit card authorization or a check, follow the numeric portion with “USD,” indicating the amount as U.S. dollars only.
• Do not give your credit card number to an importer verbally or jotted on an order form, since fluctuating exchange rates can turn an order total on its head in a heartbeat. Provide a credit card number in written form only — preferably via fax — specifying exactly what dollar amount is being authorized, the date of the authorization and the invoice number it applies to. If the credit card statement arrives showing an inflated amount, a paper trail will prove what was authorized and when in the event of a dispute.

Direct importing is all about the amount of risk we're each willing to live with. My preference is to know that if there's a problem on an order, there is a solution — or at least someone I can negotiate with to reach one. Others may feel comfortable asking questions and accepting the risks. I have friends who do a lot of direct importing, and have yet to experience a loss they couldn't absorb.

In addition, I expect that in the next couple of years my short term memory will wane yet again and plunk me in the center of an exotic overseas booth, crazy in love with some item. My hope is that when I utter the magic words “Do you have a USFOB?” the response will be affirmative, and the order will go forward.

Without that golden insurance policy? Well, I guess there's always room for more lesson.