There are hundreds of manufacturers and distributors out there looking for people to distribute different kinds of goods. This could be anything from kitchenware, clothing and tools to sporting equipment, electronics and furniture. Therefore, if you have good negotiation and selling skills, you could make a tidy profit through importing and exporting products. Here are some tips for setting up an import/export business:
1. Be sure of yourself
Before diving into the import/export business, you need to be sure that this is the right business for you. Ask yourself the following questions:
- What is your motivation for getting into the business?
- Do you have sufficient understanding of the business?
- Do you have the selling and negotiation skills necessary for dealing with manufacturers and distributors?
- Are you ready to handle the stress involved in dealing with customs and freight companies?
- How are you planning to raise capital for your business?
2. Get the basic knowledge
If you decide to pursue the import/export business, you should then get the basic knowledge necessary for success. One of the best ways of understanding the business is by taking a relevant course in a recognized institution. You will learn about subjects such as global marketing, international business, free trade agreements, trade credit insurance, international payment terms, customs compliance, networking and marketing, and supply chain and logistics.
3. Understand your market and choose your product
Before getting started with the import/export business, you should first decide what kind of goods you want to deal with. Carry out extensive research to establish if there is enough demand for the product locally. The fact that something is extremely popular in another country does not automatically mean that people will love it in your home market. This could be simply due to cultural differences or economic factors. Similarly, if you are planning to export something to another country, take time to find out what kind of products they are selling well there. You can find valuable information in financial reports, trade publications, magazines and newspapers.
4. Incorporate your business
Nowadays, it is very easy to run an import/export business informally from the comfort of your home. However, many people would be more comfortable dealing with a company instead of an individual. Therefore, to enhance your credibility, it would be advisable to have your business incorporated. This will make it easier for you to get financing from your bank, as well as win the trust of your business associates.
5. Acquire the necessary clearance and licensing
Besides getting your business incorporated, you will also need to acquire the requisite clearance and licensing before running an import/export business. For instance, you might need to get a registration number from your country’s taxation bureau. You can get all this information from your local Chamber of Commerce or custom agency. Be sure to find out if your country has any embargoes or trade barriers against the country you are targeting.
6. Build relationships
Getting involved in the import/export business implies that you will be interacting with business establishments in various countries. If you are not careful, you could be an easy target for fraudsters. It is therefore very important to establish relationships with trustworthy partners. You can get information about credible manufacturers and distributors from foreign embassies, trade associations and Chambers of commerce. In addition, it would be advisable to attend well-known seminars and trade shows where you can personally meet potential partners.
Anyone can succeed in the import/export business, even with little or no previous experience. All it takes is a determination to learn and apply the necessary skills.
Image courtesy of Flickr, RambergMediaImages