What is importing?
For a business, importing is not simply about purchasing goods from abroad. In modern international trade, import is a business process that encompasses a series of interdependent decisions — from developing a procurement strategy, through supplier selection and contracting, to logistics and customs processes, all the way to evaluating supplier performance.
Successful importing does not begin with the customs procedure, nor does it end when the shipment arrives. The business outcome is determined far more by the decisions made before the order is even placed: where to source from, which supplier is the best fit, under what contractual and delivery terms the deal is made, and how financial, logistical and compliance risks are managed.
For Hungarian businesses, international procurement today is no longer solely about achieving a more favorable purchase price. Due to the fragility of supply chains, geopolitical risks, changing shipping capacities, exchange rate fluctuations and a constantly evolving regulatory environment, import has become a defining element of a company's strategic operations.
This knowledge base page presents the complete import process — from developing a procurement strategy to the continuous improvement of supplier performance — and provides an overview of the decision points that determine a company's international procurement effectiveness in the long run.
Why has international procurement become a strategic issue?
Many businesses still view import as a relatively simple process: select a foreign supplier, order the goods, arrange shipping, and then take delivery of the products after customs clearance.
In reality, however, this is only the visible part of the process. The success of procurement is typically determined by the strategic decisions made before the order is placed.
The global supply disruptions of recent years — including the COVID-19 pandemic, disruptions affecting sea freight routes, and geopolitical tensions — have shown that supply chain stability can be just as much a competitive advantage as a favorable purchase price.
As a result, supply security has gained importance worldwide. More and more companies are using multiple suppliers for the same product, geographically diversifying their sourcing, building safety stock, and relocating production either closer to end markets (nearshoring) or to politically and economically reliable partner countries (friend-shoring).
The goal of modern international procurement is therefore no longer solely to achieve a more favorable purchase price. Real competitive advantage lies in building a procurement system that simultaneously ensures continuity of supply, regulatory compliance, predictable operations and long-term competitiveness.
What counts as import?
In everyday language, import generally refers to bringing goods into the country from outside the European Union. From a customs law perspective, however, import most often means the release of goods for free circulation, which — depending on the product in question — may require the payment of customs duties, import VAT or other charges.
In a business sense, however, import is a much broader concept.
From a business standpoint, for a Hungarian company, regular purchasing from a German or Italian supplier can just as much be part of international procurement, even if the movement of goods within the European Union does not involve a customs procedure. From the perspective of procurement strategy, supplier evaluation, logistics organization, contracting and quality assurance, these processes share many common elements.
In this knowledge base, we examine import not solely as a customs law concept, but in the context of corporate procurement, supply chain management and international business operations.
Concept
Import (in a business sense): The procurement of products, raw materials or components from a foreign supplier, including the related strategic, financial, legal, logistical and quality assurance processes.
Import (in a customs law sense): Placing goods arriving from outside the European Union under a customs procedure — typically release for free circulation — as a result of which the goods become Union goods.
Import is not the same as freight forwarding
One of the most common misconceptions is that import is equivalent to arranging shipping. In reality, international freight forwarding is just one element of a far more complex procurement process.
Once procurement decisions have been made, the freight forwarder's primary task is to organize the logistics process. At the same time, in preparing certain import transactions, the forwarder can also provide valuable professional support already at the planning stage — particularly when it comes to the mode of transport, the applicable Incoterms® 2020 rule, packaging requirements, the customs procedure, or planning expected logistics costs.
If even one of these decisions is wrong or poorly prepared, in most cases the logistics service provider can only correct it to a limited extent.
The foundation of successful importing is therefore not freight organization, but a series of conscious procurement decisions. Freight forwarding is an indispensable element in implementing these decisions, but on its own it cannot correct strategic mistakes made earlier.
The strategic importance of import in a company's operations
Procurement is one of the defining processes in the operation of most manufacturing and trading companies. In many industries, procurement costs make up a significant share of the total cost structure, which means that even a few percentage points of improvement can have a noticeable effect on a company's profitability.
The significance of international procurement, however, extends far beyond cost. A delayed shipment can halt production, a raw material of inadequate quality can cause scrap or warranty problems, while a poorly drafted contract or an incorrectly chosen Incoterms® 2020 rule can result in significant additional costs and business risk. Procurement decisions therefore directly affect the security of a company's operations, customer service and long-term competitiveness.
This is precisely why, in modern procurement practice, decisions are no longer based solely on the lowest purchase price. The concept of Total Cost of Ownership (TCO) is playing an increasingly important role — one that takes into account, beyond the purchase price, the costs of shipping, inventory holding, quality assurance, complaints, financing and supply risks.
A successful importer therefore does not necessarily choose the supplier offering the lowest price, but the partner who creates the greatest business value over the long term. Reliable quality, predictable delivery, a stable partnership and proper risk management often represent a greater competitive advantage than a lower purchase price alone.
Related knowledge base article: Total Cost of Ownership (TCO)
Why does conscious international procurement create a competitive advantage?
International procurement is no longer the exclusive domain of large corporations. Thanks to digital marketplaces, international logistics services and global supplier networks, small and medium-sized enterprises can also easily reach foreign manufacturers and traders. On its own, however, this does not constitute a competitive advantage, since competitors have access to the very same markets and suppliers.
The difference lies in how consciously a company builds its procurement processes. Selecting the right supplier, structuring contractual terms, managing risks, ensuring quality, and continuously developing the supply chain together determine whether international procurement truly results in cost advantage, flexibility and predictable operations.
Professional importing is therefore not a series of one-off procurement decisions, but a consciously built and continuously improved corporate process. The following sections present this process step by step, from developing a procurement strategy to evaluating supplier performance.
How is a professional import process structured?
Many businesses still treat import as a single procurement transaction: order the goods, arrange shipping, then take delivery of the products. In practice, however, successful international procurement is a far more complex process, in which every decision affects the steps that follow.
A poorly chosen supplier, for example, can cause more than just quality problems. It can affect delivery deadlines, increase inventory levels, result in additional costs or compliance risks, and even jeopardize service to end users. Likewise, an unfavorable Incoterms® 2020 choice or an incompletely drafted contract can cause additional costs that significantly exceed the price advantage originally gained.
Professional importing is therefore not a series of separate tasks, but an interdependent system. The success of international procurement generally depends on the coordinated operation of ten closely interrelated areas.
The following section briefly reviews these ten pillars. Each topic is presented in detail in separate knowledge base articles.
1. Procurement strategy – the foundation of every successful import
Most import projects are not decided at the manufacturer's premises, but at the company's management table.
Before searching for suppliers, it is advisable to define what business goals the procurement is meant to serve. For one company, cost reduction may be the primary consideration, while for another, shorter lead times, higher quality, greater flexibility or supply security may take priority.
Decisions based solely on purchase price often result in higher costs in the long run. This is why modern procurement strategy is built on examining the Total Cost of Ownership (TCO). The lower unit price of a Far Eastern supplier can easily lose its advantage if longer lead times, higher inventory holding costs, a higher scrap rate or more expensive logistics result in a higher total cost overall.
For manufacturing companies, a further strategic question is whether it is worth producing a given product or component in-house or sourcing it from an external supplier. Make or Buy analysis supports this decision based on economic, technical and strategic considerations.
Modern procurement strategy also takes sustainability and ethical considerations into account. More and more companies are incorporating environmental, social and governance (ESG) expectations, as well as related regulatory compliance, into their supplier evaluations.
Related knowledge base article: International procurement strategy – How to build an effective import process?
2. Supplier research – finding the right partner
Selecting the right supplier is one of the highest-impact decisions in the import process. Thanks to digital marketplaces, hundreds of potential manufacturers can now be reached within minutes on platforms such as Alibaba, Global Sources or Europages.
Easy access, however, does not reduce the risk of selection. An abundance of choice does not replace professional evaluation, so when comparing suppliers, price alone is not enough to consider.
Professional supplier research is based on structured market research. This includes compiling a long list of potential suppliers (Long List), sending out structured requests for quotation (RFQ), and then objectively evaluating the offers received. When comparing suppliers, it is worth considering, among other things, minimum order quantity, production capacity, delivery lead time, quality of communication, technical support and the supplier's flexibility.
For particularly high-value or strategically important purchases, personal contact remains one of the most effective methods. International trade fairs give companies the opportunity to get to know potential partners directly, assess their production capabilities and build long-term business relationships.
Related knowledge base article: Foreign supplier research and supplier selection
3. Supplier audit – when trust is no longer enough
One of the most common mistakes is for a business to decide on a new partner based solely on the supplier's online presence, marketing materials, or a few favorable references. In professional procurement, trust is important, but on its own it is not enough.
The purpose of a supplier audit is to objectively assess whether the partner is capable of meeting the company's expectations over the long term. This may include examining the legal and ownership background, financial stability, production capacity, quality management system, as well as social and environmental compliance.
For higher-value or strategically important purchases, an on-site audit can significantly reduce risk. The condition of a manufacturing facility, the organization of the production process, warehousing conditions or quality control practices can reveal information that is difficult or impossible to obtain through online discussions alone.
The purpose of a supplier audit is not to find fault, but to make a well-founded decision as to whether the chosen partner is capable of reliably supporting the company's operations in the long term.
Related knowledge base article: Supplier audit – How to verify foreign partners?
4. Risk management – preparing for uncertainty
International procurement involves numerous risks over which a company has no direct control. Political decisions, natural disasters, armed conflicts, port congestion or currency exchange rate fluctuations can all affect how the supply chain operates.
Modern risk management is therefore not about dealing with problems after the fact, but about identifying, assessing and mitigating them in advance.
A professional importer regularly assesses country risk among its suppliers, monitors major logistics routes, analyzes its currency exposure, and prepares pre-developed contingency plans for unexpected events. It also pays close attention to protecting intellectual property, the risk of counterfeit products, and ensuring that its operations do not depend unreasonably on a single supplier or geographic region.
The goal of professional risk management is not to eliminate uncertainty entirely — this is not possible — but to ensure that the company can respond to unexpected events quickly, on a well-founded basis, and with the smallest possible business loss.
Related knowledge base article: Managing import risks in international procurement
5. Contracting – when a good business relationship also works on paper
In international business relationships, the primary purpose of a contract is not to replace trust, but to clearly set out the parties' rights, obligations and expectations. This is especially important in import transactions, where the parties often operate under different legal systems, business cultures and economic environments.
In practice, for smaller, recurring transactions, the parties may work together without a separate contract, relying instead on purchase orders, proforma invoices or email correspondence. For strategically important or high-value purchases, however, this carries significant business and legal risk. In such cases, it is advisable to conclude a detailed international procurement contract that provides a clear framework for the cooperation.
A well-structured contract does more than record the name, price and quantity of the product. Among other things, it defines technical specifications, quality requirements, acceptance criteria, the complaint-handling process, delivery terms, payment schedule, areas of liability, and the legal consequences of breach of contract.
The proper application of Incoterms® 2020 rules is of particular importance. A single rule — such as FCA, FOB or DDP — fundamentally determines when risk transfers during shipment, which party organizes and pays for freight, and who is responsible for the various customs procedures. It is important to note, however, that Incoterms® rules do not replace the contract: they do not, for example, govern the transfer of ownership, payment terms, the legal consequences of defective performance, or the rules for terminating the contract.
For long-term cooperation, a framework agreement is a common solution: it sets out the basic terms of the cooperation, while individual deliveries are carried out based on separate purchase orders. This provides both legal stability and operational flexibility.
The contract should also address the protection of intellectual property. For in-house developed products, custom tooling, production equipment, packaging or branding, it must be clearly stated who owns these and under what conditions the supplier is entitled to use them.
For international contracts, defining the rules for dispute resolution should not be neglected either. It is advisable to set out at the time of contracting the applicable law, the competent court or arbitration tribunal, and alternative dispute resolution options — such as mediation. Clarifying jurisdiction in advance can significantly reduce the cost, time and business risk of a future legal dispute.
Practical example
A Hungarian machine manufacturer ordered custom aluminum castings from a Chinese supplier. Although the technical drawing clearly specified the dimensions, the contract did not include requirements for surface quality or acceptance criteria. The delivered parts met the dimensional specifications, but their surface quality was not suitable for further machining. Because the contract did not clearly address quality requirements, resolving the complaint involved significant time loss and compromise.
Related knowledge base article: International procurement contracts and their key clauses
6. Quality assurance – preventing defects is always cheaper than fixing them
One of the most common mistakes in international procurement is checking quality only when the goods arrive. By then, however, most problems can only be handled with significant cost, delay or a lengthy complaint process.
In a modern import process, quality assurance runs through the entire procurement cycle. The sample approval process typically results in the acceptance of a Golden Sample, which serves as the reference basis for later series production. This ensures that the same technical and quality requirements are consistently applied throughout production.
For higher-volume production, it is advisable to also apply During Production Inspection (DUPRO). This makes it possible to identify deviations before production is completed — deviations that could otherwise lead to the scrapping of entire production batches or costly rework.
After production is completed, a Pre-Shipment Inspection (PSI) carried out by an independent inspection organization can provide additional assurance. The purpose of the inspection is to confirm that the goods to be delivered meet the quantity and quality requirements set out in the contract. A commonly used method in sampling inspections is the Acceptable Quality Limit (AQL), which defines the defect rate still considered acceptable.
For many product categories, compliance documentation is at least as important as the product itself. Depending on the requirements of the given market, this may include CE conformity, RoHS or REACH documentation, declarations of conformity, or other certificates. Their absence can hinder the product's market placement or import.
A professional importer therefore does not check only the finished product, but shapes the entire production and quality assurance process so that defects can be prevented as early as possible during production.
Related knowledge base article: Quality assurance in import – sampling, AQL, DUPRO, PSI and laboratory testing
7. Warranty matters – supplier performance continues after delivery
Successful importing does not end when the goods are received. A true evaluation of supplier performance often only begins once the product is integrated into the production process or reaches the end user. This is when it becomes clear whether the delivered goods continue to meet the quality and technical requirements set out in the contract over the long term.
This is precisely why it is advisable to establish a detailed complaint and warranty procedure already at the contracting stage. This should cover how defects are to be reported, the necessary documentation, response and processing deadlines, areas of liability, and possible forms of compensation.
The Return Merchandise Authorization (RMA) system, commonly used in international practice, provides a uniform framework for the process of returning and handling defective products. It is especially helpful for high-value or technical products, supporting fast and transparent complaint handling.
Resolving defective performance does not always require returning the product. On-site repair, part replacement, a price reduction or a supplementary delivery can be a more economical solution. When choosing the appropriate solution, it is advisable to consider the nature of the defect, logistics costs and the impact on business operations.
Effective handling of warranty matters is not merely a legal or administrative task — it is one of the most important indicators of a supplier's reliability and the quality of the long-term business relationship.
Related knowledge base article: Warranty and complaint matters in import
8. Supply security – when continuous production matters more than the lowest price
In international procurement, continuity of supply often represents greater business value than the lowest purchase price. A reliable supplier does not just deliver a product — it also contributes to the predictability of a company's operations.
Supply security is one of the key factors in corporate competitiveness. A single delayed delivery of raw materials or components can cause a production stoppage, missed deadlines, additional costs and significant loss of revenue.
A professional importer therefore does not focus solely on purchase prices. It continuously analyzes supplier lead times, determines appropriate safety stock levels, identifies critical raw materials and components, concludes long-term capacity reservation agreements when necessary, and develops alternative logistics routes and contingency solutions.
All of this is especially important in industries where the shortage of a single specialized raw material or component can bring an entire production process to a halt.
Maintaining supply security may involve additional costs, but these expenses are typically far lower than the business consequences of a production stoppage, a delay to customers, or a breach of contract.
Related knowledge base article: Supply security in import – How to prevent raw material shortages?
9. Supplier diversification – flexibility as one of the most important resources in the modern supply chain
For a long time, companies aimed to work with a single, ideally high-volume partner for each product category. This can result in simpler administration, price advantages from larger order volumes, and a closer business relationship.
At the same time, dependence on a single supplier carries significant business risk. A natural disaster, political decision, production problem, port disruption or financial difficulty can be enough to break the supply chain.
The goal of diversification is not to source every product from multiple origins, but for the company to recognize which raw materials, components or finished products are critical to its operations, and to consciously reduce supplier dependency for these.
A dual sourcing strategy splits the procurement of the same product or raw material between two active suppliers. Multi sourcing goes even further, relying on several parallel suppliers. Geographic diversification is also playing an increasingly important role, where a company sources the same product from different regions.
Diversification does not only mean seeking out new suppliers. It also includes the technical validation of alternative raw materials or substitute products, increasing the flexibility of production technologies, and continuously evaluating potential suppliers who could be quickly brought into the supply chain if needed.
Diversification is not a goal in itself, but a risk management tool. Managing multiple suppliers can mean more complex administration, greater coordination needs and higher operating costs. The optimal supplier structure should always be designed based on the strategic importance of the given product, supply risks and the company's business objectives.
Practical example
A Hungarian electronics manufacturer sourced printed circuit boards exclusively from a single Chinese supplier for a long time. Following a global supply disruption, the manufacturer fell several months behind schedule, causing significant production loss. The company subsequently brought in an alternative supplier from Central Europe and one from Southeast Asia. Although the average purchase price rose slightly, the supply chain became substantially more resilient.
Related knowledge base article: Supplier diversification – Dual sourcing and multi sourcing strategies
10. Measuring import performance – what isn't measured can't be improved
Successful importing is not the result of one or two well-executed purchases, but of a continuously improved business process. A basic requirement for this is that the company regularly measures and evaluates its own procurement performance as well as its suppliers' operations.
Professional procurement organizations today no longer focus solely on purchase prices. It is just as important to examine how reliably, accurately and predictably suppliers fulfill their commitments.
One of the most widely used performance indicators is OTIF (On Time In Full), which measures whether a shipment arrived at the agreed time and in the full ordered quantity. A high OTIF value generally indicates a well-functioning supply chain.
To measure quality performance, the PPM (Parts Per Million) defect rate is often used, particularly widespread in the automotive industry, the electronics industry and other sectors with high quality requirements. The lower this value, the more stable a supplier's quality performance can be considered.
When evaluating performance, companies also regularly analyze the total Landed Cost. This takes into account not just the purchase price, but the total cost associated with importing, including shipping, insurance, customs duties, warehousing, handling costs and other incidental expenses. It is not uncommon for a supplier with a higher unit price to result in a more favorable total landed cost overall.
Beyond quantitative indicators, a supplier's willingness to cooperate is also an important evaluation criterion. Response time, speed of problem-solving, the level of technical support, or participation in development projects are harder to quantify, yet they significantly affect the success of long-term cooperation.
Companies working with strategic suppliers often hold regular Quarterly Business Review (QBR) meetings to evaluate performance from the previous period and jointly set development goals for the next.
Performance measurement is not an end in itself. Its value lies in providing an objective basis for development decisions and contributing to a partnership that results in continuous improvement for both parties over the long term.
Related knowledge base article: Import procurement KPIs and supplier performance measurement
Import is not a one-off task, but a continuously developed business system
Successful importing does not depend on a single well-executed purchase. Companies that remain competitive in the long term treat international procurement as a system of interconnected processes, where every decision affects the steps that follow.
Procurement strategy determines the direction of supplier research. Audit and risk analysis support the selection of the right suppliers. A well-prepared contract provides the legal and business framework, complemented by consistent quality assurance and effective warranty processes. Supply security and supplier diversification increase the company's resilience, while regular performance measurement enables continuous improvement.
International procurement is therefore not a linear process, but a continuous improvement cycle, aimed at optimizing costs, reducing risks, and ensuring the long-term stability of the supply chain.