International trade is here to stay. People have imported and exported goods for centuries. And the business of importing and exporting goods is a significant process of human development.
As the world becomes more and more technologically advanced, international trade will become even more rewarding. The process of importing and exporting products are not as difficult as they used to be decades ago.
Total trade imports in the UK for July 2015 alone stood at £35.4 billion whilst exports (EU and Non-EU) for the same period was £24.8 billion. These figures show the extent of import and export activity in the UK alone. It is a key contributor to the overall economic growth of the UK economy.
Most of the goods we use on daily basis are products bought, sold and distributed somewhere in the world everyday. And successful exporters and importers are benefitting from the exchange among countries.
Import/export businesses typically have low overhead costs and lean business models, allowing them to reap sizable profits for a minimal investment.
Importing is a big business because some products are cheaper when brought in from out of the country. Other brands are popular with people in different countries. Other products cannot be grown or made in certain parts of the world.
Some countries typically export goods and services that they can produce inexpensively and import those that are produced more efficiently somewhere else.
Types of import and export businesses you can start
According to Entrepreneur.com, you can:
1. Start an export management company (EMC) if you want to partner with domestic sellers to find foreign buyers for a small group of companies over a long-term. An EMC does it all–hiring dealers, distributors and representatives; handling advertising, marketing and promotions; overseeing marking and packaging; arranging shipping; and sometimes arranging financing. If you want to serve foreign buyers, this is a great option for you.
2. Launch an Export trading company (ETC) if you are interested in identifying what foreign buyers want to spend their money on and then you find your own domestic sources willing to export.
3. Become an import/export merchant. You will be responsible for purchasing goods directly from a domestic or foreign manufacturer and then pack, ship and resell the goods on your own.
If you are interested importing goods from global retailers in bulk then packaging goods up individually for resale, companies such as Fast Pak Packaging can make the process smother for you.
Choose your target niche carefully
Get down to business and register your import and export business. You can’t compromise making it official. Get your documents right.
Once you have decided on the type of import and export business you want to start, choose your target market carefully. Do your research and find out who your potential clients will be, which geographic areas you want to focus and what specific products or services you’ll offer. Identity the best potential foreign market for your product or service.
If you want to determine which international markets to enter and the appropriate marketing strategies for those countries, check out The World Bank’s “Ease of Doing Business” and globalEDGE’s “Market Potential Index.”. You might also want to check with your local government officials to best determine sources for conducting market research.
If you have previous experience in a particular field, you should seriously consider targeting that market first. Your experience in the industry will make it easier to learn and do better quickly.
Establish foreign and domestic contacts in your niche market.
This is probably the most time-consuming step involved in starting your own import and export business. You can’t do business in isolations in the industry. Both domestic and foreign contacts are very important.
Compile lists of all foreign and domestic businesses in your chosen niche, and begin your direct sales and marketing campaign. Get in touch and pitch them about your new business and what you intend to do to them.
One of the most pivotal aspects in the import/export business is how to handle foreign exchange payments, which are simply unavoidable. Smart importers / exporters will seek for business foreign exchange firms: currency whole-sellers, who also offer a variety of hedging tools against adverse currency movements.
Start sourcing suppliers, importers, buyers etc.
Place calls, send emails and mail marketing materials directly to sales and purchasing managers in each company. And don’t forget to follow up on all conversations and agreements. Visit manufacturers, suppliers and distributors and learn everything you can about what it takes to successfully run an import and expert business.
The easiest access to reputable suppliers might be Alibaba, Global Sources. These are the holy grail to finding high quality suppliers, manufacturers, exporters, importers, buyers, wholesalers and trade leads.
There is a lot more you need to get done before you can finally start moving goods to where you want them. Pricing can make or break your business. Volume (number of units sold) and commission on that volume are two of the most important elements you should consider carefully.
Your goal as an importer or exporter is to price your product in such a way that your commission (markup on the product to customers) does not exceed what your customer is willing to pay and offers you a healthy profit.
Your next step is to focus on logistics — transporting the product to where you will be selling it. Hire a global freight forwarder who serves as an all-round transport agent for moving cargo, typically from a factory door to another warehouse.
Get the details right and you can be on your way to starting a successful import and export business.