Mexican artisan

Importing furnishings from Mexico : Do’s and Don’ts

Finding artisans who make beautiful things is the easiest part of importing.  You will soon find that certain regions (see my blog: Regions of Mexican Artisans)have specialized in different disciplines based on the natural resources, artisan concentration or marketplace. The following are steps to consider when importing furnishings from Mexico. Once you established a relationship and are comfortable buying from someone, the process begins:

Keep Good Records

It’s easy to loose track when converting from Mexican Currency (Mexican Peso MXN) to US Dollars (USD).  It’s best to work in the local currency rather than in USD. When purchasing, make sure the vendor gives you a “nota” or “pedido” to summarize everything.  If you give them cash, get a receipt and show the deposit on the pedido. Sidenote:  If you have a Mexican checking account, keep in mind that the banks do NOT send you the cancelled checks for your records.

50/50

A typical deposit is 50% of the amount of purchase.  Once a repeat relationship is established, the vendor will relax this rule. To me, it’s best to give the deposit, as it is a gesture that confirms your interest in the product and is a “go ahead” to produce.  There have been times that we felt honored by the vendor not requiring a deposit only to find out that they didn’t produce the product when we were ready to ship.

To me, it’s best to give the deposit, as it is a gesture that confirms your interest in the product and is a “go ahead” to produce

Caution

If your vendor was found selling their wares without a storefront, be cautious as your deposit may be taken and the vendor may not be there upon your return. This only happened to us once but it was still a lesson learned. A good test is to see if the vendor returns on a regular frequency to the same spot. Test his phone number to see if he answers.

Get a Good Consolidator

Mexican artistry warehouseThe Consolidator is your conduit to getting the product you ordered from numerous vendors together in one location.  Typically, they will section off their warehouse so that you have your space. They are responsible to receive, store, packing (optional), paying (optional) and shipping your items to you. They will coordinate with a shipping company to your desired destination and advise of a Freight Forwarder when your shipment gets to the border.  The Freight Forwarder will bring your shipment from the Mexico side thru US Customs (or whatever Country) to a yard in the US (or whatever Country).

What to ask your consolidator:

  • What services they provide
  • Can they get you access to the artisans or do they consider that proprietary? Some consolidators have a showroom. I see this as a conflict of interest as it is not their role to sell you product.
  • Do they make a commission on the sales from the artist to you? Especially beware of them introducing you to other people as there is often a kickback—which ends up costing you that much extra.
  • What is the menu of fees?
  • Do they charge to store your merchandise? If so, how much?

Full Container

The way a consolidator makes their living is by charging you a fee(s). There are many areas they can pad the bill to you. For example, the vendor may charge you 8%-15% for packing.  Make sure the consolidator doesn’t charge you the same. The other incentive is for them to ship your truck without putting much effort to pack it FULL.  If you are not over 40,000lbs (which you are not typically with furniture, pottery and accessories) then packing it FULL saves you money.  The consolidator has no incentive to make this happen as they just want the “wheels to roll” so they can get their money.

Methods of Paying Vendors

FM3 Visa Bank wire transfers are typically $40USD per transfer.  If you have to make a deposit and final payment, multiplied by numerous vendors, it can add up quickly.  If you can get a FM3 Visain Mexico, you are eligible to get a bank account in Mexico with Mexican Pesos.  This enables you to pay the vendor with a check when you are with them in person or designate a signer to your account. (more on this later).

With a Mexican bank account, you can make transfers to (most)vendors via interbancaria

With a Mexican bank account, you can make transfers to (most)vendors via interbancaria.  This is an 18 digit bank account that, when combined with a recipient name, money can be easily transferred.  The benefit is that you can track the value of the peso vs. dollar (or other) and fund the account when it is beneficial.  I personally track the Mexican Peso daily and deposit into this account when conditions are favorable.  This can easily make a 10%-20% annual fluctuation and have a large impact on your bottom line.

Cheaper isn’t (necessarily) Better

You will be tempted to buy from small vendors who have better prices.  This may be true but you need to weigh the difference in considering your time, travel to the smaller villages, hotel and meal expenses versus buying from someone who has more variety and has already done this for you.  Many times, they have better pricing also from relationships already established.

Negotiation

Should you negotiate with the vendor or artisan?  This is very subjective.  If I feel there is room to negotiate, I usually will.  On the other hand, you can see the living conditions of others and know that the artist is working to eat. One time, we went to a mask carver in Tocuaro, Mexico that was famous in the Master Artisans Book  (Grandes Maestros of Mexican Folk Art). The price quoted was high but the work was commensurate.  The way I look at it is that we are in business with the artist.  The better price they give me, the more we can sell. It is totally ok to ask their best price but stay away from a bordertown negotiation as it will most likely anger the artist.

Looks like a Duck

Just because something LOOKS like something else you saw with a higher price tag doesn’t mean it has the same quality.  The best example is that we see a typical chair in many places…all at different prices.  I would chose a vendor who specializes in chairs, uses proper joining methods, glue and a nice finish over someone who doesn’t—even though it looks the same.

Freight Forwarding

Once the truck/trailer leaves your consolidator, there is a trail of paperwork that is prepared so that it can cross the border. The freight forwarder is responsible to bring your load from the Mexican side to the US. This is the largest “variable” in the process.  You need to make sure the paperwork is ready from your consolidator and start calling once the load should be at the border.  Customs can be backed up forHoliday, Seasonal shipments or other reasons. Once the forwarder has your shipment, it is in the hands of US Customs.  Many times, we were charged additionally for “intense audit” and provided a receipt. If your Freight Forwarder is charging you for these audits on every shipment, get a different Freight Forwarder. It seems like this is a loophole to get them more money. An “intense audit” means Customs has a third party (designated by the Freight Forwarder) unload whatever portion of your shipment they require to satisfy their request. This can be one item or the entire container.

An “intense audit” means Customs has a third party (designated by the Freight Forwarder) unload whatever portion of your shipment they require to satisfy their request.

Customs

Only one notably bad experience with pottery. The agent must have seen something suspicious in the front of the truck that was filled 100% with pottery. They unloaded a fair portion of the container (imagine intricately stacked pottery with packaging material of used tortilla flour bags). Apparently, the damage escalated from the normal movement of the truck so that more and more of the pottery was damaged. When we opened the doors in Atlanta, it was like pottery potpourri that dumped out onto the parking lot.  It took hours just to throw away product just to get to the undamaged items.

Insurance

You can insure the contents for various reasons including “bandit insurance” in case someone hijacks the contents.  This is your call. Sometimes we do it, sometimes we don’t. If there is a higher frequency on the highways, your consolidator will know. It is expensive and usually not purchased.

Fumigation

I recommend this as a value to your customers. You can say that “every truck is fumigated” if there is a chance that some bug wants to set up shop in your wooden furniture.

Proper Labels/Marking

Do yourself a favor and mark each box with your Purchase Order number.  If your vendor will do it, have them put your item code label on the item.  Otherwise, the product gets to your warehouse and your staff will be asking a million questions because the items in the boxes don’t match the order. Just part of doing business.

Security

Definitely a concern—but isn’t it everywhere?

Maana

Don’t rely on a date a vendor says your order will be ready. Period.  We employ a staff to ensure that this does not happen (or is at least minimized)

Hire Someone

Mexican artisan If you are going to be importing more than 6 truckloads (53 foot containers, not pick up trucks) it may be worth considering an employee to look after your interests. Obviously, this would be someone that you trust.  Also, buy a truck so that they can do their job and potentially save you as much money to offset the insurance, gas, vehicle maintenance etc. Don’t have this employee pay the artisans. Keep that in your personal control to avoid temptation for fake receipts, etc. Keep honest people-honest. They can do your quality control, approve the vendor to be paid, find new artisans and be your eyes and ears. How can 300 items be more expensive than 10? We had secured a corporate gift order for copper caldrons made in Santa Clara de Cobre for 300 items. To gauge the price discount, I asked the artist how much one was, then ten, then 100 and then 300. The price went up each time. Why, I asked. He told me that it would require him to buy a lot of copper that he didn’t have the money to invest. The cost of the materials versus the labor was very substantial.  The risk of us not returning  was high to him. This led to us becoming a mequiladora.  In this case, we buy the copper and pay him a “sueldo” or salary based on time or per piece. This was a win-win because it kept the cost low for both parties. It did, however, impose extra leg work on our part to purchase the copper, and bring it to the artisan.

It’s not for everyone

It feels great to know that we have helped many who had great talents and needed some new inspiration.

Truthfully, this business has many positives. We enjoy spending about 40% of the year in Mexico. It has enabled us to travel and see new areas and meet great people. It feels great to know that we have helped many who had great talents and needed some new inspiration. There are areas we have traveled that we no longer go back to. Luckily, we still have relationships. If you are the type of person who requires everything to be perfect, this will be very difficult to do. Otherwise, it is the most fun and I couldn’t consider doing anything else.

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