Direct imports are products shipped from a foreign country to a consumer without intermediaries, reducing costs. The internet has made direct importing accessible to anyone, but challenges include taxation and lack of local resources.
Direct imports are products manufactured in a foreign country that are shipped to another country and received by the consumer at the point of entry without going through an intermediary. Imports typically pass through two or three levels of the supply chain before reaching the consumer, including the import agent, wholesaler and retailer. Cutting out middlemen reduces the total cost of the product. With the popularization of the internet and the globalization of world economies, direct importing has become more viable for the average consumer.
Importing foreign products traditionally required specialists at each stage of the supply chain. Brokering the deal with the foreign manufacturer was the agent’s job. It was the distributor’s job to transport the product to customs. Possession of the product for marketing was the responsibility of the wholesaler. The resellers sold the product to the consumer.
Only the well traveled and politically connected had the ability to access direct imports without going through the supply chain. The average consumer paid the market price for the convenience of buying imported goods from a local retailer. That price, however, was filled with all costs incurred each time the product had to change hands.
Through the development of the internet, direct imports have become accessible to anyone with a computer and an internet connection. E-commerce facilitators provide direct access to manufacturers from other countries. Consumers can buy products made thousands of miles away on an online website, pay in their own currency, and have the item delivered directly to their homes.
Economists call the removal of intermediaries from supply chain disintermediation. While intermediaries have traditionally played an important role, today their role is largely outdated in many respects. The cost savings using an e-commerce facilitator for direct imports are significant enough to redefine the import market. This solution is an example of how globalization affects a country’s economy and how it benefits the buyer at the extreme end of the supply chain. The producer also enjoys an advantage by having direct access to consumers around the world.
Direct imports present some challenges. Jurisdictions are wondering how to properly tax goods that are skipping key taxable entry points into the market. Consumers who buy direct imports do so without the legal resources to purchase locally. Warranties mean little without a local distributor. Even the benefit of supporting the local business economy may be lost in the shift to Internet globalization in the direct sale of goods.
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