Importing coconut charcoal briquettes comes with its fair share of challenges and problems. From dealing with complex import regulations to ensuring consistent product quality, importers often face hurdles that require careful planning and solutions. In this article, we’ll explore the common challenges in importing coconut charcoal briquettes and how to overcome them, so businesses can tap into the growing demand for eco-friendly fuel sources.
Finding a trusted supplier sometimes can be a challenging one, because there are still many small factories that produce with low productivity, and also below standard quality.
And some agents or traders usually scam you by selling you at a high price, but then ordering the product with the less quality grade so they can gain more profits. To avoid, there are several ways to do it:
1. Observe
What you have most seen and search on Google, are traders who claim that they are the factory. They claim that they are the supplier when you contact them, but many of the briquette charcoal websites are hiding their status. And don’t want you to even know about it.
You have to find a trustable trader because some of them can buy from different manufacturers and get lower prices by compromising the quality of charcoal. So you have to find a briquette trader that trustable.
How? By asking him more about the products, observing his attitude, his credibility, his record, his knowledge, his experience, and most importantly his honesty.
2. Visit the factory/trader.
By visiting, you can see clearly how the production and how the briquette quality is, maybe you can do a test on it, and you can chat with your seller further to know about him and to observe him more deeply.
Or other things you can do is call your seller directly, or do a meeting online, so you can see his face and his credibility.
3. Buying sample
Another thing you can do is by buying their samples and then you can test the briquette.
You can see how to get a coconut charcoal sample below.
When dealing with suppliers from different countries, language barriers can arise, making effective communication challenging. Misunderstandings and misinterpretations may occur, leading to delays, confusion, or incorrect product information. And google Translate is not enough and sometimes still leads to misunderstanding.
1. Hire a translator
To overcome language barriers when dealing with suppliers in different countries, you can hire a translator or ask your friends/partner that have good English, to translate it.
2. Simplify communication
When exporter and importer are communicating with each other, avoid using complex words and try to communicate with an easy English
Easy English is a word that is commonly used in conversation and is easy to understand.
Rather than say “Hello, how are things going?” You can just say “Hello, how are you?”
Or rather than say “I owe you one” you can just simplify to say “Thank you”
This is a small thing but give a big impact on understanding the conversation, because lots of people around the world understand English as an easy language, not by complex words.
Price high in the context of ‘problems’ can vary and can be both real and fake, depending on the specific circumstances.
Some importers still need price decreases to fit their business budget, but some importers negotiate and just want to get a lower price.
That is not the buyer’s fault, and in the end, the supplier must have to find a way to make the deals.
But one reason that importers need to consider is, the higher price has always had the better value. Whether the value is the best quality, consistent supply, trustworthy, etc.
logically, the better quality has a higher price. Imagine if I sell 1 bottle of mineral from a river, and then 1 bottle of mineral from the best mountain ever. And both mineral waters have the same price, so it does not make sense.
It doesn’t make sense if the 100% coconut shell price is equal to 100% wood charcoal.
So if you find a supplier who sells coconut charcoal on Alibaba or Amazon with a price of just USD 600/MT or USD 800/MT, then it is a scam.
You will get a product of wood, not coconut briquettes.
The higher the price, the better the supplier.
If you want to observe more about how good they are, You can simply ask your supplier “Why do we have to choose you?” Or ask them about their unique value than other suppliers.
But if you still need to lower the price, then you will have to negotiate the price.
Negotiating can sometimes present challenges because you want to reduce your cost, resell it, and get a higher margin. But on the other hand, the exporter also has a price floor and profit limit.
According to our experience and our studies, lots of buyers want to get a lower price because they fall into a price war. This price war does not just mean between charcoal briquette products, but it also means between types of charcoal briquettes.
If you have a problem with negotiating the price, you can solve this by:
1. Working with trader/agent
By working with traders, you can negotiate to decrease the price more flexibly. Because they also have product grades that can help you to choose the coconut charcoal that is fit for your cost and also still good quality.
You can know more about the pros and cons of suppliers and traders from the discussion before.
2. Consider long-term partnerships
If you envision a long-term relationship with the supplier, emphasize this during negotiations. Highlight the potential for future collaborations and the benefits of establishing a strong partnership. This can create additional incentives for the supplier to be more flexible in pricing and terms.
Some suppliers will decrease their price if you order more than 1 container, or have a long-term contract.
Logistic problems can significantly impact the import process when dealing with coconut charcoal, such as shipping delays or canceled shipment because there are 2 common factors to these logistic problems:
1. unprepared or miss plan exporters (including supplier, forwarder, and port)
Delays in shipping can occur due to various factors, such as port congestion, customs clearance issues, or transportation disruptions.
To mitigate this problem, work closely with your supplier to obtain accurate shipping schedules and track shipments in real time. Consider working with reliable freight forwarders who have experience in handling international shipments.
2. Shipping lines don’t want to carry coconut charcoal.
It all started in the earlier 2000s when MSC shipping lines get one of the containers on fire while shipping to Russia. Since then most of the shipping lines decline to carry coconut charcoal.
most of the shipping lines don’t want to deliver coconut charcoal in their cargo ship. Because the product is dangerous goods
So how to do shipping? Even though there are lots of shipping lines that decline to deliver coconut charcoal, there are still some shipping lines that accept it (with verbal conditions).
There are two methods for shipping coconut charcoal, and it’s important to understand the differences between them.
The first method is to declare or mention coconut charcoal in the shipping documents, such as the Bill of Lading (B/L). This means that in the B/L, we clearly state that we are shipping coconut charcoal briquettes.
The second method, which is strongly not recommended, is to misdeclare the cargo. This involves mentioning a different “safe” product in the Bill of Lading, such as parquet flooring, furniture, wooden handicrafts, or anything other than charcoal. By doing this, you may be able to secure cheaper freight costs, as shipping lines consider your shipment as general cargo. However, if the shipping line discovers that you have misdeclared the cargo, you will face significant fines. For example, ZIM shipping lines may charge you around USD 30,000, while CMA could charge USD 20,000, and so on. These fines are substantial compared to the value of the goods being shipped.
Moreover, misdeclaring the cargo carries additional risks. You, as the buyer, the shipping agent, and the factory involved, may be blacklisted by most shipping lines. Every year, numerous containers carrying coconut charcoal are intercepted, stopped, and prohibited by shipping lines. Therefore, it is crucial to accurately declare the contents of the shipment in the bill of lading documents to protect the interests of importers, forwarders, and exporters.
Managing payment terms is a critical aspect of conducting business with coconut charcoal suppliers. However, payment terms can sometimes present challenges that require careful consideration and negotiation. From cash flow constraints to trust concerns and currency exchange risks, the complexities of payment terms can impact the smoothness of business transactions.
Almost all suppliers of coconut charcoal used Telegraphic Transfer Cash in Advance as their payment terms, and also they use delivery terms of FOB or Free on Board.
Why is that? After you understand what supplier price is included, then the price is actually to close that liabilities.
Telegraphic Transfer (T/T) Cash in Advance means that the importer does a transaction with the exporter with a down payment (DP), and the final payment has to be completed before the products are shipped.
The DP terms can be negotiated between the buyer and the supplier, it can be 50% to 50%, 70 to 30%, or even 30% to 70%.
The important thing is, the first payment can be a fund for production, and the second payment has to be paid off before delivery for paying the forwarders, documentation, and so on.
These payment terms sometimes become a problem because the importer is not preparing their money well, and then has a late payment, this will make them get penalties and other sanctions according to what they agree with in the sales contract.
To solve this, by negotiating a sales contract and do an agreement, some suppliers have payment terms of 60% first payment, 30% before delivery, and 10% for B/L documents guarantee. And if you are late to finish the payment, then you will not get the B/L physics document from the exporter, and it causes a container holding penalty.
You can negotiate more with the supplier, but even if there is a percentage change, then the change is not too significant.
It is also impossible to use an L/C payment because coconut charcoal suppliers need payment upfront.
So the best way to solve this is to prepare your money, so the final payment will not be paid late and you don’t get any sanctions.
Read More: Can Coconut Charcoal Briquettes be Paid for by LC Payment Terms?
The reason why most suppliers choose FOB is because they cannot control the goods when it’s already in the cargo ship. They just can track it, but cannot handle and protect the goods.
FOB means that the exporter just takes care of all deliveries and all shipping documents until the charcoal is lifted to the ship. Once aboard, the transportation risk passes from the seller to the buyer.
If the container is already in a cargo ship and the charcoal began to be shipped, then it is not the responsibility of the supplier anymore. So if the cargo is delayed or has an accident, the supplier won’t get involved, and no need to take responsibility.
This allows them to focus on their role in delivering the charcoal to the cargo ship and provides clarity in terms of risk allocation between the supplier and the buyer.
This becomes a problem for importers because they take responsibility for the container in the cargo.
To solve this problem, it’s hard to negotiate for changing the delivery terms, so the best way to solve this is to prepare your cash flow before buying the goods, and consider the expenses because it will lower the risk.
Read more: Learn About the 2 Incoterms That Been Used for Coconut Charcoal Briquettes Shipment
The quality of coconut charcoal plays a vital role in its usability and effectiveness across various industries. However, there are instances when coconut charcoal fails to meet the required standards, posing challenges for buyers and end-users. Whether it’s inconsistency in performance, impurities, or inadequate manufacturing processes, substandard quality can have detrimental effects on businesses and their products.
There are 3 common things when it comes to quality that do not meet your standard:
1. Unprofessional supplier
3. Different countries, different quality of material
To avoid this problem, you can always get in touch with your supplier/agent, always get updates for the production and other activities, and choose the recommended countries that have good quality raw coconut material.
If you looking for a long-term partnership, inconsistent supply is one of the frustrations that comes with importing coconut briquettes. Because inconsistent supply can destroy your supply chain and it is still out of your control.
So to solve this problem, you can make a contract with your supplier, and then find a backup supplier if your first supplier has a lack of production.
Or you can work with traders/agents, because they also work with several suppliers, so it can help you to have a stable supply chain and better risk management.
