Imports

Imports are goods or services that a business buys from abroad - the opposite of exports. A business might import physical goods, such as parts, or services, such as IT support.

Why businesses import

Importing can give a business access to raw materials or products that are not available domestically. For example, a UK bicycle manufacturer imports natural rubber for its tyres because the UK climate cannot produce it. Without imports, it could not make its tyres at all.

Imports can also be cheaper than making the same goods domestically. An overseas supplier may have lower labour costs, cheaper materials or large-scale production, so its price can be lower even after transport. A UK furniture retailer that imports woven rattan chairs from Indonesia may pay less per chair than a UK manufacturer charges, allowing it to set competitive prices or keep a larger profit margin. This can improve its competitiveness against rival businesses.

Drawbacks of importing

Importing can involve complicated and expensive logistics. Goods may travel long distances by ship, lorry and plane, and the business may need to arrange shipping, insurance, customs paperwork and storage. Delays at ports or damaged deliveries can disrupt production or leave a business without stock.

Imports also create competition for domestic firms. Cheap imported products can take sales away from businesses that make similar goods in the home country. If customers choose the lower-priced imports, domestic firms may sell less, earn lower revenue and, in serious cases, be forced to close.