Import Classification with Infinite Objects

Welcome to the Duty Drawback podcast from International Tariff Management here at ITM. We help our clients secure refunds and reductions of duty burdens on imported and exported goods. With more than 40 years of classification, free trade and compliance experience, in each episode, we explore real life examples of how companies are taking full advantage of numerous programs in place for both importers and exporters and how these little known programs can yield substantial returns to their bottom lines.

Joining us today is Ryan Molling. Ryan is the supply chain manager at Infinite Objects. We've been working with Infinite Objects for a little over six months on the classification project, which has yielded a nice refund for them.  Infinite Objects has saved over $350,000 in tariffs based on reclassifying their imports over the last six months. We hope that our conversation today will offer  some insight into not only what it's like to work with ITM, but also the process of the client's involvement and, and most importantly, the economic advantage by reviewing your classifications and looking at the rulings for the product itself to determine if you're importing them correctly.

We hope you will gain some valuable insight into the world of customs tariffs. With all the supply chain challenges the world is facing, our aim is to maximize your duty drawback dollars and boost your bottom line. We hope you'll subscribe to our podcast to stay current with each new episode in which will unveil numerous ways to improve your international trade profitability. Thanks for listening.

Transcript

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Welcome to the Duty Drawback podcast from International Tariff Management. Here at ITM, we help our clients secure refunds and reductions of duty burdens on imported and exported goods. With more than 40 years of classification free trade and compliance experience, in each episode, we explore real life examples of how companies are taking full advantage of numerous programs in place for both importers and exporters. And how these little known programs can yield substantial returns to their bottom lines. If you're engaged in international trade, you can expect to learn actionable tips and strategies that you can implement in your business to become a more profitable importer and or exporter. Thanks for tuning in. Now let's dove into this month's episode. I'm Jill LaMadeleine and I'm the Vice President at International Tariff Management.

At ITM, we specialize in three things: 1:09

Duty Drawback, Classification, and Free Trade Agreements. Today, we're going to focus on our classification services. And joining me today is Ryan Molling. Ryan is the supply chain manager at Infinite Objects. We've been working with Infinite Objects for a little over six months on the classification project, which has yielded a nice refund for them. Ryan, thanks for taking the time to talk to me today. Hi Jill, thank you. Yeah, happy to talk. And looking forward to this conversation. Excellent, us too. So first, I just wanted to ask you to tell me a little bit about Infinite Objects and and how the company got started and how you ended up where you are. Yeah, sure. I guess I was introduced into objects first and we're so in short, we're a company that prints video and kind of just to start with where that began, Our founder, Joe Saavedra, he was working at a company called Givi, which is probably a recognizable name in the digital media. Space. He was there in their research and development department, just playing around with different concepts around digital media of all kinds. And one of the concepts that came out of all of that experimentation was this idea of a video print. So that was around thinking about how how can video be appreciated the same way that prints and photographs have been appreciated for for a long time, for centuries. And so we wanted to take this idea of printing something like a photograph that you would hang on your wall or collect or print an artist's print that would be addition and collectible. Taking this concept and give it to a video and providing a new way to appreciate video outside of the conventional places where you do that your TV, your phone, your laptop, creating more of that kind of dedicated and and special way to to collect and appreciate a video. And so fast forward to today, Joe started Infinite Objects and now we are a team of almost 30 people selling video prints. So we we do that in a few different sizes with they are displays encased in either acrylic or bamboo. They are, you know permanently treated which is what makes them unique is that you can't change the video it's it's it's one of a kind. So it's collectible There's no buttons. There's no there's no nothing other than a porch that you can plug in a charger. And to charge the small battery inside the encased display. So it's kind of the last piece of what the product is like. You know, on our website, Infinite Objects dot com, you can see everything that we that we have and we have a collection of original video prints. Some of those are additions artist works. Some of them are made by by our team. We have some artists here working on Infinite Objects, so some of their pieces are up there. We have some nifty print products that we'll let and a few collectors print, print. They're video entities. And then we have a print, your own product as well, which is exactly what it sounds like. You can go onto the website, upload a video that you want to print, and we'll send you your video print. Oh, so cool. Yeah, that's the that's the object in a nutshell. So they're all video only. Not still prints. Everything is video. Yeah. And there you know, we're we're kind of looking to go into, you know, static images as well. But, you know, our our bread and butter. Yeah. Is video. And that's that's really where we're focused. And what would you say you know, I've obviously been on your website several times. Which one is your most popular? I have my favorite, but I'm wondering which one which one you guys see as the most popular. Yeah, I think I think it would be pretty unanimous over here that it's there's an artist named Frank Boustany. He we've we've done a number of prints with him, projects with him. He he makes these really cool videos that we call we like to call them Swiss francs. And if you look on the website and search you know his name, Frank Disney, you use these on E, you'll see. You'll see what I mean. Kind of the iconic Infinite Object is one of the earliest ones where it's kind of like these these squishy balls moving around in the space of the video. And it's very cool. And especially when you see it on one of our displays so that that one is easily our most popular. Every time he does, we do a project with him. You know, they sell out pretty quick. That's great. Yeah, I did see that one. That one is, is really fascinate thing. So where I know we've talked about the website, where else is there anywhere else that people can purchase your products or are you Internet only. So currently we're we're just on our website Infinite Objects dot com. That's where we sell everything that we can offer. All our products are there on our online store. Okay, great. And how did you end up there, Ryan? What what's what's your history like? Yeah. So, so I come from just over ten years of supply chain related work. You know, I started in a in a pretty straightforward buyer role. And yeah, just didn't intend to get into it. But just there was the first one of the first jobs I could find. I graduated from college. It was interesting. And so I went for it. And now, you know, yeah, ten years later, I'm still doing it. So mainly in I started in kind of like aerospace materials. Hardware did that for about six years. It was a trading company trading between Japan and North America. So we were we were supplying anything that the aerospace makers in Japan might be looking for from their North American suppliers. So we helped facilitate all the sourcing, you know, purchasing, shipping and then, you know, even quality. So it was a real end to end experience. As far as supply goes. And then from there, I wanted to kind of jump into the startup space and went to a company called MakerBot, which is here in New York and Brooklyn. That was very different. It was, you know, consumer hardware as a 3D printers. And from there, I moved to a water technology startup called Roshan. And and then here are two Internet objects. So you know, I kind of I guess what interested me about coming here was the kind of overlap with with art that that infinite objects is. So it's definitely a hardware company in the sense that, you know, we sell hardware, we sell electronics. But there's, you know, the artistic element is is really what makes it, you know, I think our products really special. So I really wanted to get into that space. And I wasn't really sure how the supply background I could do that, but finally I found it. So yeah, that's what got me here. Wow. That's it's been a very active ten years. That's a that's quite a journey so let's kind of shift gears here and why don't you tell me about how you heard about ITM and how you made the initial contact with us to help you out with your classification. Yeah, sure. So it started with someone named Scott Miller who is someone that we work with who consults for us. You know, he's a real industry guru. He's, you know, been knows everyone knows everything and we initially when I got here, we were importing we have all of our our hardware made by a contract manufacturer in China. And so we were importing those and being hit with the full 25% China tariffs. And then on top of that there was a standard duty. So it was I think the effective duty rate was something like 27.6%. So pretty hefty and I on one of the early shipments we were using a new freight forwarder and they asked us, you know, to provide a description of the product so that they could classify it. And, you know, we already had this code, but I was kind of like, well, let's just see what they come up with, you know, so I gave them the full description and they came back with an entirely different code and one that had no it was a duty free classification and it had a 7.5% tariff rate. So, you know, obviously that was it was very exciting. But also there was this kind of like you know, too good to be true. You're kind of feeling over here. So we reached out to Scott and said, you know, what do you think of this? And he immediately said, you know, I know this company and international tariff management, you know, I think they could they could do a sanity check for you on the new code. And so he connected us and then that was it. Yeah, we jumped right into it. Yes, I remember. Well, I've been working with you now a little over six months, and I remember our first our first time connecting and the process that we went through. And so we did with you guys. What we do most often is we conducted the analysis and we verified that in fact the freight forwarder was correct and you guys were over paying duties and it was 27.6% when you added the base duty and the 30 ones, which have had an implication to many companies throughout the United States and so after our analysis, then we started with the protests and we went back and we were able to get you money back on post on previous entries so can you talk a little bit about what the process was like for you guys working with us? You know, doing the protests and putting everything together? What was involved on your end as the client? Yeah, so so really the instructions, you know, I remember the instructions you gave a very simple just said you needed the commercial invoice and entry summary for any import that we wanted to produce. And so, you know, right away you got to work putting together a list of well, just diving into our files and you know, the first step was just to to locate those commercial invoices and those entry summaries and then kind of reorganize them. So I did kind of created a new bold organization that would be you know, easier for you to look at, of course. And, you know, numbering everything I was using there, I think it's the interim number. I think so that, you know, we can catalog them and know what we're talking about and have everything well organized. So kind of that was the first step, was getting all the files together, getting them organized, making sure we weren't missing anything. You know, these are obviously opportunities to get money back. So we wanted to really make sure we cash everything. So in some cases, you know, it had to go out to our brokers on past shipments where we may not have had the entry summary on file and get that from them. And, you know, then also as a part of that effort of making sure we didn't miss anything, I reached out to our brokers just to send, you know, can you send me the A list of all of the imports you did for us in the last year. And then we kind of work, work from that to make sure we didn't miss anything. So yeah, that was kind of the first step, was getting all the files together and then putting together a list and a spreadsheet form to kind of index all of those files. And then that became the baseline for, you know, kind of our mutual working process still, you know, as we went line by line to process them. And I can tell you, Ryan, on our end, Infinite Objects was very organized and extremely detail oriented. In fact, your spreadsheet is something I've shown several people in our office that they should they should recreate when working with their clients on their classification projects. I think it's kept us lined up and organized and streamline the process for sure. So I thank you for that. It's great to hear. Yeah. I think moving back and knowing that. Yeah. So if you don't mind sharing and if you do, that's OK. How much money was infinite objects able to give back or is in the process of getting back? Yes, I'm happy to share. So as of today we've had over $50,000 worth of protests approved. I would say refunds are approved. So that's the that's the actual money coming back. And then there's still a number of of industries that have yet to liquidate that. We will be protesting this year and that amounts to also a little more than $50,000 so in total when we're done with this whole protest process, we'll have over$100,000 of refunds coming back. So pretty significant figures and you know, it's really, really exciting for our business, you know, that we can, we can get that money back. Right. And then not to mention that I'm sure that your broker has changed the classification and now you're enjoying those savings going forward. You're not overpaying. Yeah. And those too. Yeah. I mean, since we changed the code last year, like late last year, we've saved over $350,000 on that 20% of tariff burden that we were able to take away. So that's, that's from, that's just from when we started today. And obviously every, every import in the future will, will say as well. So yeah, it's the gift that keeps on giving and yeah, it was hugely transformative for, for our business, you know, it's just 20% of product of product value that goes right into the back to the bottom line. So you know the huge win, that's great. Yeah. And you can expand your your artist base and yeah. Right more products better back into the stuff that we like working on. You know important stuff is fun but some of the exciting stuff, the stuff that gets us really, really, really going is yeah, the products we get to do and, and that's right. You know, that's, this is us more more runway to do that. Right, right. OK, great. So let me just ask you, do you have any advice for anyone who may question their classifications or be unsure if they're correct and maybe they hesitate to reach out to somebody? Do you have any advice for them? Yeah. I mean, I would say like don't hesitate. Absolutely. Get an expert opinion. I think that was really important to you know, because really what happened is I once then forward provided a new code. I kind of try to do my own research first. And I guess 11 thing I recommend is going into the the rulings database, you know, those tariff classification rulings that that the CBP will do and they they put all of that, the results of that into a public database. And so you can search through the entire database of rulings and they're very detailed and really logical and how they explain the ruling, which I kind of find to be really interesting just for, you know, personal interests. But you can certainly do based by the code that you're you're interested in researching or by keywords that were related to your product. So you can try to find similar products that were ruled on in the past. And so, you know, actually for in our case, I was able to find a number of rulings in favor of using the code that we had been given by this new forwarder. And these are products that were harbor products that are quite similar. So that was a great first kind of you know, sanity check. And that gave us some confidence that we were on the right track. But then, you know, we wanted to be really sure because again, it's what the implications are so big. And we just didn't want to want to make sure we weren't making any mistakes or overlooking anything. And that's when we were like, go, let's get an expert opinion on this. Is fine. Find someone who can with real knowledge and experience, who can who can confirm that, you know, we're OK to go ahead. And so, you know, just to summarize, kind of like for use that lead on that database and, you know, do your own research, make sure you understand for yourself what why you're using that code. And why it's why it's right or even why it's wrong, I guess. And then yeah. And then find find an expert, go to ATM and get that that you know, expert confirmation. Well, I think you hit the nail on the head with those rulings, too, Ryan, because we have a multifaceted approach and it does involve those rulings and the fact that you took the time to look at them, I think you're way ahead of the general population. But to add the rulings and the harmonized tariffs schedule of the United States, which is an enormous book of classifications, and then throw in the product description, you know, you put it all together and you make the basis for the argument has how you want things classified. And I think you did one third of the work yourself, which is more than most people do. But it's it's commendable. It's it's having the knowledge and knowing what you're doing. So it was really daunting and intimidating. So and it takes it takes like a lot of, you know, I don't know, willingness to sit and stare and read through lots of kind of boring, boring jargon. But yeah, you. Know, very legal mumbo jumbo. Sure. Yeah. Yeah. And it takes a special attention to detail to read through through those rulings for sure. Yeah, definitely. Well, we hope that our conversation today is given the people who are listening insight to not only what it's like to work with ITM, but also the process of the client's involvement and, and most importantly, the economic advantage by reviewing your classifications and looking at the rulings and the tips and the product itself to determine if you're bringing them in correctly and we encourage everybody who's listening today who hasn't been to your website to do so because your products are very, very special and interesting and they make great gifts. Or in addition to your office space, especially right now as people are starting to return back to work, can bring some artistic video with you and put it on your desk. So thank you, Ryan, so much for joining us today. It's been great talking with you. And we thank you to our listeners and be on the lookout and join us in the future for any more podcasts that we put together. Thanks, Ryan. Thank you, Joe. Thank you for having me. And thank you for for for for everything that we've done together and working together. Yeah, it's been great working together. I look forward to working more in the future. Likewise. We hope you've gained some valuable insight into the world of customs tariffs. With all the supply chain challenges the world is facing, our aim is to maximize your duty drawback dollars and boost your bottom line. We hope you'll subscribe to our podcast to stay current with each new episode in which we'll unveil numerous ways to improve your international trade profitability. Thanks for listening.