FGX vs. Importer of Record Brokers

One of the biggest differences between FGX and Importer of Record brokers is that we see the IOR (Importer of Record) service as a tool and not a solution (which has massive implications for the solutions we provide and the teams that we service, which we’ll touch on later).

For example, when a client asks an IOR broker to import their equipment into X country, the IOR broker will simply give the client an IOR rate.

When a client comes to FGX for IOR services, we take a step back, and say, “wait, do you even need an IOR? It looks like you have a business registered there, meaning you may be able to act as the IOR yourselves.” Which is a good thing, because 1) you don’t have to pay FGX or an IOR broker for IOR services, and 2) the import VAT becomes eligible to be reclaimed.

We always have a conversation with our clients to walk through their specific situation, so that we can put them in a position to reduce costs wherever possible. 

It’s not lost on us, however, that when a client asks for IOR services, what they’re actually asking for is a turnkey solution with zero end-user interaction. The key confusion our clients have is that by acting as the IOR, they have to be involved in the customs clearance process and thus won’t have a turnkey solution, which is false. For example, FGX manages all of our client’s shipments door-to-data center even when we have them act as the IOR. They don’t handle any paperwork, licenses, freight documentation, the hiring of other subcontractors, etc. They simply tell us where it needs to be and by when, and FGX handles the rest.

Our methodology might require a bit more discovery work upfront, but during the process itself, our client’s shipments are entirely turnkey and our clients track everything through our portal (regardless of which FGX solution you use.) They also get a dedicated account manager, since our clients are typically enterprise businesses moving high-value equipment.

But if our clients do need an IOR service, we of course, provide it as well. Again, the main difference is that we only sell IOR when it’s actually necessary, instead of whenever possible, which is an important difference. For example, if you’re in an IT team that needs to buy or ship millions of dollars worth of IT equipment and are paying IOR fees in countries where you don’t need to, you’re overpaying hundreds of thousands or millions of dollars.

A solution, not a service

FGX, unlike IOR brokers, doesn’t sell IOR services a la carte. We only provide our IOR service when it’s a part of our door-to-data center solution. It’s important that our Importer of Record services are combined with our logistical, compliance and project management capabilities because it directly impacts the success of a shipment—which is what enterprise IT teams ultimately care about.

If a shipment was sent with paperwork with even just one wrong number or letter, the shipment could get held up in customs, even if a 3rd party IOR was used. If the licenses or permits were submitted incorrectly, the shipment will get stuck in customs, etc. The list goes on and on. 

And more likely than not, when a shipment is stuck in customs, an IOR broker will walk away and say that the paperwork wasn’t their responsibility (which although can be true, does not leave a good taste in one’s mouth.) We’ve seen this happen many times and end up having to clean up the aftermath, a case study on that coming soon.

Unlike IOR brokers, FGX’s buck doesn’t stop at providing an importer of record service. We treat our client’s entire project as our responsibility, from purchase of the hardware, pre-shipping, IOR, delivery and installation. For example, there are many situations where our sales team has to work with the client’s internal teams and external vendors to convince them that they can configure, buy and ship the hardware the way they want to.

We also work with our enterprise clients to put them in a position to project manage and track at a high level, in real time, so that all of the stakeholders (network engineers, datacenter operators, partners) are looped in and can coordinate installation and power-on (which oftentimes, FGX provides as well.)

By managing the entire supply-chain process, we’re able to guide our clients during the purchasing phase, execute the shipping part of the project (what our clients typically reach out to us for,) and coordinate with the parties that need to be involved after shipping has been completed.

Product Implications

Although FGX has clients that ship one-offs to data centers in countries where they need it, that’s a minority of our clients. 

Since we solve a holistic business problem and not just an importer of record problem, FGX is positioned to solve larger enterprise IT problems. 

For example, if you’re in an organization with dozens of international locations and need hardware in all of those countries, your system for procuring, configuring, delivering and installing hardware is probably patched together in an inefficient way. 

You may be:

• Buying in-market, directly through in-market VARs, which means:

  • You’re paying an international markup on hardware

  • Each country has its own process for purchasing, delivering and installing your infrastructure, which creates redundancy and requires a lot of managerial and operational overhead to sustain.
    
    

• Buying through a US VAR that’s reselling an in-market VAR, which means:

  • You’re paying markup on markup.

  • You have poor data-freshness, because you’re getting information from a vendor who’s emailing a vendor who’s emailing a dozen vendors (the US VAR has to reach out to the in-market VAR for updates who reaches out to the freight forwarder, distributor, etc. for updates.)
    
    

• Buying through a US VAR that’s reselling an IOR provider, which means:

  • You’re paying markup on markup.

  • You have poor data-freshness, because you’re getting information from a vendor who’s emailing a vendor who’s emailing a dozen vendors (the IOR broker is just a middleman for the IOR provider in-market.)
    
    

• In a procurement or IT team that’s been forced to piecemeal a shipping solution themselves by hiring a freight forwarder, IOR provider, customs agent, etc., and can’t keep up because it’s really not your job and it’s just something that you were forced to do.

We make these problems go away by ingesting our client’s international IT infrastructure footprint and requirements into our system. This allows us to understand where our clients can act as the IOR, where they can’t, how they’re set up in specific countries (like if they are in an SEZs – Special Economic Zone), etc. 

Once we have all of their lanes set up, our clients purchase everything they need in the US with a few trusted vendors and use our platform to deliver wherever they need by whenever they need it. This makes project management and delivery easy and streamlined, in one centralized place. This allows for SKU standardization, clear infrastructure inventory management, uniform implementation of security protocols, pre-shipment integration and rack-and-stack, etc.

This is all not to say IOR brokers don’t have a use-case. When it comes to lower value shipments like RMA or Amazon FBA, you would certainly use an IOR broker over FGX. In fact, FGX doesn’t even support RMA or FBA shipments. But if you’re in an IT organization that’s moving high-value, mission-critical IT infrastructure, your best bet is going to be FGX.