Import Export Business – 15 Top Tips and 12 Startup Ideas
Cadoos International Petrochemical Company
Chairman at Cadoos international Petrochemical Co. (INT PCC ) and Petro Chemical Supplying Co. (Petro CSC )
Import Export Business – 15 Top Tips and 12 Startup Ideas
The story of Lord Alan Sugar is a great one, from selling radio aerials for cars and other electrical goods out of a van, to a market stall, to multimillionaire. Starting an import export business really isn’t rocket science and can be hugely rewarding and make you financially successful but of course, is going to take time, dedication and some all fashioned hard work.
Knowing how to start an import export business is challenging and will take some study and research but the rewards are great. Here’s a few tips and ideas on what to think about as you start your import export business venture:
- Product Testing: Is Your Product Hot Or Not?
- Find The Best Products For The Lowest Price
- Get Samples From Suppliers
- Safety In Numbers: A Range of Products Earn Bigger Profits
- Understand Agencies
- Learn How To Negotiation: The Art of The Deal
- Learn How To Find Buyers!
- Understand Incoterms 2020: Code Words for Logistics
- Find A Freight Forwarder
- Understand Marine Insurance: For When Disaster Strikes!
- Remember Your Terms and Conditions
- Setup Your Company The Right Way For You
- Write Your Business Plan
- Keep the Tax Man Happy!
- Build Your Own Website
Your Own Import And Export Business
Some reports state that around 70% of us are unhappy in our job. This being true, it’s always possible to change career, take the plunge and start up your own international trading business.
It’s scary but for those that do and are willing to take the time to learn a new business, do their research, create a business and marketing plan and have the guts to take action, it’s well worth it. Nothing’s easy in this world but once a few sales start to come in, it’s a very rewarding feeling seeing something come to life that you’ve built.
Starting an import export business or any business for that matter, is exciting and hugely rewarding. The sweat, hard work and hours that you put into your own company, benefit you directly, rather than your boss or manager, you reap all the rewards. Making all the decisions and being accountable only to yourself will give you a feeling of freedom and the rewards are many.
Securing your own financial future, earning the respect and admiration of colleagues, friends and family as someone who took the risk and went out and built their own company is a satisfying feeling. Working the hours that you want to work is a huge advantage over having to work endless hours for someone else.
Let’s get to the point and tell you how to set up your own company, how to trade on the International stage successfully and point out some of the most common pitfalls, so that you can setup and trade successfully and most importantly, profitably from day one.
For some inspiration, here’s a story of how one of our students did exactly that and is now exporting Spanish wine to China.
YouTube Live Q&A
Before we get started, we ran a YouTube Live session and have a recording of it below if you would like to watch. In it, we discuss the following:
- An introduction for newbies, such as common used terminology and what it means.
- What are the basic steps involved in importing products into the UK
- Are Cash Against Documents or Documentary Collection widely in use now?
- Can you Import/Export without registering a company?
- How to set up and handle banking as a sole trader commission agent.
- I’m thinking of a change in career going into logistics. What do I need to know?
- Should I handle freight forwarding in-house?
Minimum Investment For Import Export Business
Other than knowing how to start an import export business, the next question is inevitably, how much will it cost? There’s no single answer to that question, it depends on many factors. Obviously if you’re importing high end luxury cars from Italy, you are going to need a significant amount of capital behind you, much more than if you were to import grapes from France for example.
So it’s not so much, “how much do I need” as much as what’s in your business plan and how will you fund it?
Is Your Product Hot or Not?
You’ve thought long and hard about the products you want to either import and sell or what products you’re producing for export. If you’re looking for some inspiration for ideas, we’ve got ides from six countries below to get you thinking.
Many are eager to jump right in, buy stock and start selling, however before you dive head first into your import export business and spend your hard earned money on stock, it’s vital to test the water and find out if others are as enthusiastic about your product as you.
You may think that the product you want to sell will be successful and you’ll make a healthy profit from it but in reality this may not be true. We’ve all seen Dragon’s Den where budding inventors and entrepreneurs think they have the most revolutionary idea or product but the wise Dragon’s don’t see it and shoot it straight down! Just because you like a product it doesn’t mean that the public will like it and part with their hard earned cash to buy it.
There are many ways to find opinions on your ideas and products. Sometimes you have to be a little creative in how you approach it but its time well invested. Start with friends and family and ask for honest opinions. Discuss pricing and ask your friends if they would pay for your product. Hold a focus group in your local neighborhood, give your product to the focus group and ask for their thoughts and feedback.
Find the Best Products for the Lowest Price
When it comes to selecting and sourcing products, my advice is, it’s best to perhaps pick an industry that you are familiar with so there’s less of a learning curve, if you’re into mobile phone technology and already know and understand a lot in this field, it can be a good idea to follow this road.
You’ll already understand the products that you’re looking at and probably know pricing already so these are a few advantages to sticking to what you know.
It’s extremely important to know where to buy your products from. This is one of the pillars of foundation of your import export business and will dictate if your business is profitable or not.
A common complaint we hear from many entrepreneurs is “I know what I want to import and sell but I don’t know where to get it from”. Where can you source products from with such a huge amount of suppliers in a global market place?
You must understand how to source your product from the right supplier with the right terms and price. Many traders rely on Internet suppliers like as Alibaba and other such companies. These companies a certainly worth looking at there’s no harm in this but you’re limiting your search.
There is a great myth among buyers in that you get the best price, product and terms from China. This is not always the case! China is not actually the centre of global trade. Sourcing from companies in Preferential Trading Countries (PTC) can be a much easier and cheaper way to go.
We’ve written a more detailed blog with where we discuss some ideas on sourcing internationally.
Get Samples From Suppliers
Facing buyers will be a key part of any trading that you do and following some simple guidelines will make the process easier, give you more confidence and give you a much higher conversion rate. Buyers will want to see samples of the goods they intend to buy and samples come in all shapes and sizes.
Some are easy to obtain from supplier such as clothing, toys and watches. Others are bulky, such as construction and capital equipment. Most producers will give a limited number of samples free of charge to a serious buyer or at a nominal cost.
It’s important to make sure you know how the products work when you receive these samples, as you will have to make presentations and demo the product to potential buyers so familiarise yourself with all aspects of the product. This is where your market research and focus groups will come in very handy as you will be able to take all the feedback and questions you received and be ready for the same, preparing your pitch to cover these.
Make contact with companies and see what they can offer you and at what prices. If you’re able to take a trip and go and visit manufacturers or factories, this is always time and money well spent and shows you’re serious.
You’ll also have the added advantage of seeing the product yourself, check the quality of the materials and the workmanship. Nothing really beats physically seeing it as photos and video really can’t show this.
A Range of Products Earns Bigger Profits
Now that you have sourced your product, got your samples, conducted your research which is proving positive, you may feel ready to dive in, start your import export business and start approaching buyers and retailers, asking them to place orders.
Before taking that jump, it’s very wise not to become complacent and make sure you vary your product range. This offers several advantages.
Concentrating on selling just one product will limit you. You should ideally have a complimentary range of products.
Appointments to buyers/retailers must result in a sale. If you show your potential buyer only one item, for example, an electric kettle and they do not want to place an order, your visit was a waste of your time. However if you then show the buyer your complementary range you have a better chance of securing an order. If they are not interested in your kettle, they may be interested in your unique coffee maker, toaster and waffle maker. You get the point, remember, there’s always safety in numbers!
By offering a product range, even if your buyer likes the main product you wanted to market, they may also like other products within your range, so a purchase order that would have been for just one product, could turn into an order for several products. This increases profits for you and in the worst case, if the buyer did not like the first product you had in mind, they may like another in the range and still place an order. Don’t limit yourself but keep as many options as you can on the table.
Understanding Agencies
Generally speaking, setting up as an export and import agent can be the way to go if you’re looking for minimal financial commitment as it requires less financial exposure, so this is something to definitely consider.
Many businesses are set up as agencies. There are two main types of agencies available and it’s extremely important you understand both. Both have their benefits and can offer you advantages depending on your personal situation and what you want to achieve. There are traditional agents and brokers. There is a lot to understand when dealing with agencies which is a little beyond the scope of this blog but we have a blog post that goes into much more detail on how to become an import export agent.
The Art Of The Deal
Negotiation is one of the highlights of being an entrepreneur and being “the boss”. This is where you can set the terms of your business and drive a hard bargain. Negotiating is a key part of any business from the trader at your local market stall, to multi-billion pound companies the world over.
Hone your negotiating skills, be confident and a little charming and you can walk away with the deal you want. We’ve seen on Dragons Den how the dragons and the entrepreneurs will negotiate back and forth, sometimes quite intensely until the deal is done with both sides feeling great about the agreement. As an entrepreneur this is a great feeling, securing the deal you want and giving you more confidence going into the next deal.