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The benefits of bonded warehousing explained

Posted on 13.05.2019

There are lots of warehousing and logistics options available, but if your company currently imports or exports goods, you should strongly consider bonded warehousing.

A bonded warehousing and distribution service involves a space where products which are liable for VAT or import duty are kept. Any VAT or duty payments are deferred until the goods are removed from the warehouse for sale. The benefits of bonded warehousing are clear for importers of goods liable to these charges, and sellers of beer, wine, spirits, tobacco and food routinely make use of this sort of service.

How bonded warehousing works

The beauty of a UK bonded warehouse is that it helps to improve cash flow, which is critical for any sales-led business. Deferred payments mean that anywhere between 25-33% of the upfront cost can be kept aside until the goods are finally sold.

Companies which intend to export goods via seafreight won’t have to pay duty in the UK, and can instead simply pay it in the country the goods are destined for. Essentially, your company can avoid paying duty in both countries, which helps to significantly lower costs.

Fulfilment without delay

Storing goods in bonded warehousing makes sense for companies who want to ensure certainty in their supply chain. Seasonal goods can be imported and stored in advance of their peak season, meaning they are available for immediate fulfilment without any delay. This helps to speed up the delivery process and improves customer relations.

While some companies might be apprehensive about importing perishable items, the good news is that most bonded warehouses have specialist facilities such as deep freezers, large refrigerators and storage vats to hold wines and spirits.

Simplifying onward transportation

Having to deal with import duty and VAT can be complicated, particularly when there are other logistical/administrative considerations within a business to concentrate on. With bonded warehousing fulfilment services, the payment of duty is looked after as part of the package. When your goods are sold, your fulfilment provider will look after the duty details on your behalf. This enables your firm to get on with what it does best – selling goods to others in the supply chain.

If you think that your business could benefit from AMCO Services bonded warehousing solutions, or would like more information on the cost-effectiveness of bonded warehousing, simply get in touch with a member of our team today, who will be happy to discuss your requirements.