5 Things You Should Know Before You Start Importing/Exporting
21/10/2019
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Honesty is quality
Are you contemplating a move into the export or import trade? Are you asking yourself – “How should I get into import export, so I don’t need to work a 9 to 5 routine day after day?”. Read on as we will tell you how enticing the prospect can be and also give you pointers on what you should be aware of.
Import/export is a very lucrative business, but also one fraught with risks. Therefore, you will need deep and relevant knowledge before you embark on this journey. Following is a brief list of 5 important things you should know before you commence your export/import business.
Irrespective of the country you are trading in, complying with relevant standards and regulations is a pre requisite.
You will require a thorough and comprehensive understanding of the rules of every country you intend to deal with, or you are likely to find your goods getting confiscated at customs, which will eventually result in loss of stock and money and place your nascent enterprise in a precarious position. But don’t worry as you will easily find most of the information online, so get ready for some research!
Each country has standards defined for products and commodities and deviating from those standards can result in your shipment getting rejected. This is especially true for agricultural products and commodities and food and beverage products. Proper labeling, pesticide use, additives used etc. are required to be documented properly and comprehensively. Country specific certification may be required as well. An example for EU standards and regulations for agricultural products can be found here.
In today’s information technology driven business environment, you just cannot allow your business idea and model to come to fruition without considering appropriate business software. Many excellent e-commerce software programs can assist you in getting your exporting and importing business up and running. You will need to consider software that allows you to generate invoices, convert currencies in quotations, allow you to manage inventory etc. Quickbooks and Zoho are two examples of two such software companies that you may consider. Keep in mind however that, you may need to tailor the software to suit your business operations.
Another type of technology resource that will be invaluable in your international trading business is online Business Directories or B2B portals. These websites allow you to create presence in highly targeted and niche marketplaces where wholesale buyers and suppliers meet. They will generate valuable leads for your business and also help you build your network internationally. Examples of such services are go4WorldBusiness.com.
There is a heap of financial information that you will have to know regarding importing and exporting stock. Many online guides will inform you about financial issues such as trade finance, for example. It is crucial to understand everything you need to know, and proper planning must be carried out to ensure you have a viable and profitable business idea. Otherwise, many unforeseen costs and expenses may come to bite you in the rear later on.
Not only will you have to have relationships with a local Bank that provides working capital loans, you will also need to arrange for letter of credit (LC), bank guarantees (BG) and a host of other financial instruments commonly used in cross border trade.
Additionally, when pricing your products, you will need to factor in overheads like transportation, financing costs etc.
Good contacts are needed if you want to be successful in any business. By developing a comprehensive list of reliable contacts, you can find new business opportunities and gain valuable knowledge and insights into your industry as a newbie.
If networking is not your strong suit, you will have to start learning if you intend to make progress. This aspect is important, and you should not overlook it. The various features that sites like go4WorldBusiness provide such as the ability to send inquiries as well as conduct real time online one on one chat with buyers and suppliers will prove to be immensely helpful in building up your contact list. Additionally, you should have contacts with a whole list of professionals in the industry – buyers, suppliers, manufacturers, traders, wholesalers, drop shippers, distributors, shipping agents, customs clearing agents, quality analysts are just few of them.
Your unique selling point which gives you an edge over competitors is something you should figure out pretty soon before you do anything else. Research international flow of goods through online resources such as ITC Trademap.
What unique aspects will drive the profitability of your business? How will you find consumers who want your products? You will have to find a niche in the market that your competitors are yet to exploit. If you can do that, you are likely to end up on the winning side. E.g. if you want to import and sell or supply apparel, you will need to find something unique that’s not already selling in your local market – style, material, something that stands out.
In case you have not got the message already, starting an export/import business is tough work. It takes considerable effort to initiate the business. Extensive preparation and knowledge of the craft are vital for success.
Source: Go4worldbusiness.com