How To Start An Import/Export Business

 

For nearly as long as there have been people, there’s been trade. Imports and exports are how the potato came to Ireland, and in a more modern sense, it's how we’re able to buy food, drinks, furniture, clothes, and nearly everything else, from all around the world today.

Imports are any good or service brought in from one country to another, while exports are goods and services produced in the home country for sale to other markets. Thus, whether you’re importing or exporting a product (or both) depends on your orientation to the transaction.

The modern system of international trade is a complex web of import/export businesses that handle the sale, distribution, and delivery of goods from one nation to another. If you're interested in starting a business in this industry, know that there is more than one type of import/export business. You could focus just on importing or just on exporting. You could be a manufacturer’s representative, specializing in a certain industry, or you could be an import/export merchant or agent, which is more of a freelance broker.

• Select Your Business Name and Set up a Website and Blog

Without a website or blog, you can't have a networked import/export business. Get yourself a platform that allows you to develop a presence online and grow your business beyond your wildest imagination. The goal is to balance the flow of communications, sell products online (or offline), and build your customer base to drive profits for your international business.

And it can’t hurt to consult with an international lawyer, banker, and accountant for advice on establishing a virtual import/export business and keeping it in the best legal and financial position possible.

A couple of places to get started with a website are Network Solutions, Go, Daddy, Intuit, and Verio. All offer domain name registrations and affordable website hosting packages with easy-to-use site-building capabilities.

To create a professional blog, which allows a continuous flow of engaging communications, try Blogger, Typepad, or WordPress. These services will enable you to create a blog in minutes with stunning designs, reliable hosting, and on-demand tech support.

Now you are ready to share your business expertise and capabilities and sell to the world.

• Pick a Product to Import or Export

When it comes to importing and exporting, you cannot be all things to all customers. Decide on something and stick with it.

You have two viable reasons for choosing a product to import or export: you know it will sell or you like it. Hopefully, you can meet both criteria. That’s an ideal business model. Would you buy it if you saw it in another part of the world? Then you are on to something!

• Find the Right Market

You’ve selected a product; now you must look for someplace to sell it! You will improve your odds of picking a winner if you cultivate a knack for tracking trends or even spotting potential trends. Getting in on the ground floor and importing or exporting a product before it becomes a super-seller in a country could be the business breakthrough of a lifetime!

Do your homework and research the market beforehand to locate the best potential foreign market for your product or service.

Two places to check are The World Bank’s "Ease of Doing Business" and globalEDGE’s "Market Potential Index."

You might also check with local government officials to best determine sources for conducting market research. For example, in the United States, there are the Department of Commerce International Trade Administration’s Data and Analysis and the U.S. Census Bureau Foreign Trade, which governs the reporting of all import/export statistics. These resources help determine where in the world products and services are moving to and from, and why and how to get in on the action.

• Source your suppliers

Once you have a product you’d like to trade internationally, you need to find a local manufacturer or another producer that makes your product and can lead to a strong partnership. A good relationship with a supplier is crucial to long-running success in an imports/exports business.

Generally, you can find suppliers through companies like Alibaba, Global Sources, and Thomas Register. You will need to convince the supplier of the benefits of entering the U.S. market (or another market you wish to sell to), and figure out the logistics of taking their product from their local warehouse or production facility to another one, potentially on the other side of the globe.

You might also be your own supplier — in some cases, as Cuffe occasionally is for herself.

“We own an interest in a vineyard in South Africa called Silkbush," she says. "My orientation when I do business to them is, 80% of the grapes that we pick we send off to domestic wineries who use our grapes to produce their own proprietary high-end wine. The remaining 20% is used to create our proprietary label Silkbush, which we export to foreign markets.”

• . Price your product

You know what product you want to work with and you've identified your target market. Next up, figuring out how much to charge.

Typically, the business model of an imports/exports business includes two key understandings: the volume of units sold, and the commission made on that volume.

Be sure to price your product such that your markup on the product (what ends up being your commission) doesn't exceed what a customer is willing to pay. But you don't want to make it too low such that you aren't ever going to make a profit.

In the imports/exports industry, importers and exporters typically take a 10% to 15% markup above what the manufacturer charges you when you buy the raw product.

• Find Customers

Provided you have done a good job with search engine optimization on your blog or website, customers will find you. But don’t rely on it. You should also go hunting for customers! Check with local contacts, such as trade organizations, Chambers of Commerce, embassies and trade consulates. They generally have a good sense of who’s doing what in the international marketplace. They can offer contact lists specific to your industry and also suggest trade shows that are taking place locally and internationally that might help you connect with customers in a faster and more efficient manner.

Excellent service on the exporting end in the U.S. Commercial Service (CCS) Gold Key Matching Service. 

At the same time, work your social media and networking platforms (your blog, Facebook, LinkedIn, and Twitter) by posting information about your product or service and asking specific questions about your audience's needs. This gets the conversation going and keeps it going while making sure it's related to your business. The point is to keep your business in the minds of potential customers worldwide.

• Transport Your Products

Your next step is to focus on logistics — transporting the product to where you will be selling it. By now, you have located a customer who loves your product, solidified the terms of the sale with them, and established a means for getting paid. Now you must move your product.

Hire a global freight forwarder who serves as an all-around transport agent for moving cargo, typically from a factory door to another warehouse. Their service saves you a lot of time, effort, and anxiety for a very reasonable fee. Based on the information you provide, they take care of all shipping arrangements, which includes but is not limited to handling documentation, arranging insurance, if requested, and determining necessary licenses, permits, quotas, tariffs, and restrictions (country regulations), which can be one of the most complicated aspects of importing/exporting for a newbie international trader.

You can find freight forwarders online under “transportation,” or check listings in trade magazines or other international handbooks. Pick two or three that seem like a good fit for your product or shipping destination.

Two well-known companies that are eager to work with brokers, consultants, and small businesses are UPS and Fed Express. Either can also assist with getting paid, a critical part of the international sales process.

• Provide Great Global Customer Service

The relationship between you and your overseas customer shouldn't end when a sale is made. If anything, it requires more of your attention.

Think of your after-sales follow-up on your import/export business as part of your product or service offering. The first step is to say, wholeheartedly — whether in person, via Skype, by email, or by telephone — "Thank you for your business!" For more on this, learn how to provide great global customer service.

Congratulations! You have officially learned the fundamentals of how to establish an import/export business. Now start booming and make the world your business!

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