How To Start An Import/Export Business
Setting it up and mapping it out
So you want to sell to the world? You’ve come to the right place. Thanks to the Internet, setting up an import/export business can be ridiculously simple and very profitable. Here are ways to make it happen.
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.
First, remember to register your business name with a reputable web host because your domain name is what customers use to find you and your business.
And it can’t hurt to consult with an international lawyer, banker, and an 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 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.
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 are helpful for determining where in the world products and services are moving to and from, and why and how to get in on the action.
Source a Supplier
Once you have a likely import or export product in mind, learn everything there is to know about it. If you were its creator, how would you improve it? Go to a manufacturer and suggest product improvements to turn a mediocre product into something slightly ahead of its time. Your suggestions might mean the difference between a Sony Walkman and an Apple iPod.
The easiest access to reputable suppliers might be Alibaba, Global Sources, and Thomas Register. There are others, but these three are considered the holy grail to finding high-quality suppliers, manufacturers, exporters, importers, buyers, wholesalers and trade leads.
In continuation of our first installment which covered how to start and map out an import/export business, here we provide the sales and distribution aspects of establishing an import/export business.
Price the Product
The business model for an import/export business is based on two critical elements within the international sales operation.
- Volume (number of units sold).
- Commission on that volume.
The goal 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. Typically, importers and exporters take a 10% to 15% markup over cost, which is the price a manufacturer charges you when you buy a product from them.
The more you sell, the more you make. Keep your product pricing separate from logistics because, at some point, you combine the two to determine a landed price per unit. A good transportation company can assist here. Don’t let this part intimidate you!
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 is the U.S. Commercial Service (CS) Gold Key Matching Service. The U.S. CS can help you find potential overseas agents, customers, distributors, sales representatives, and business partners.
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 on 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 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 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!