Your 6-Step Guide to Starting an Import Export Business

Your 6-Step Guide to Starting an Import Export Business


Import export Hi everyone, Eric Goldschein here from Fundera,
and I want to talk to you about starting an import/export business. No matter what’s going on with the global
economy, there is always going to be an import-export market. Whether we’re talking capital goods, consumer
goods, equipment, food and beverage, or any other category, importing and exporting is
an industry worth hundreds of billions of dollars. That’s because, for almost as long as there
have people, there’s been trade. Importing and exporting is how you’re able
to get clothing from China, olive oil from Spain, cars from Germany, and so on. So if you’ve identified a product that you
think could be a hit in another market, it’s time to explore how you can import and/or
export it, and make this into a business. Keep in mind, there’s more than one type
of import/export business. You could start an export management company,
or EMC, which exports goods for a domestic business that wants to sell to a different
market. An EMC hires dealers, invoices all the necessary
parties, and deals with things like advertising, marketing, packaging, shipping, fin ancing,
and more. You could also go the other direction and
start an export trading company, or ETC. An ETC figures out what foreign markets want,
and then finds domestic sources that can deliver that product. You could also become an import/export merchant,
purchasing goods from a manufacturer and then packing and shipping those goods on your own. Here, you assume all the risks and all the
rewards of selling that product overseas. Regardless of what you’re looking to do,
there are some steps that every import/export business must take. So where do you start? Here are the six steps to starting your own
import/export business. 1. STEP ONE: Cover the Business Basics
So here’s your first step: Get the basics in order. This means registering your business with
the state where your headquarters will be located, registering a domain name, getting
any business licenses you need to legally operate, and so on. You’ll need a business plan, too. Part of that business plan needs to cover
the rules and regulations of the markets you want to work in. For example, to bring alcohol and tobacco
products into the U.S., you need an Alcohol and Tobacco Trade and Tax Bureau permit, which
can take months to acquire. Similar research needs to be done when doing
business with other countries, covering everything from legal back label requirements to insurance. You can conduct research with resources like
GlobalEDGE’s Market Potential Index or by checking with local government officials and
websites, such as the Department of Commerce International Trade Administration’s Data
and Analysis. You can also find reports on the state of
the imports/exports industry with the Census Bureau’s Foreign Trade page. Perhaps most importantly, you need access
to capital. Startup costs can vary greatly depending on
the type of imports/exports business you start. Everyone knows it takes money to make money,
so it’s helpful to have capital on hand when you’re getting started. Look into a business credit card with a 0%
introductory APR offer if you qualify, or a startup loan or line of credit, to get you
going. STEP TWO: Identify what you’ll import or
export, as well as your market This step goes along with step one, because
in order to write your business plan and understand what regulations you’ll need to follow,
you’ll need to know what you’re importing or exporting. If you’re getting into this business, it’s
either because you have a passion for international business, or you’ve identified a product
that would shine in another market, or both. So let’s assume the former is your reason
for getting into this business. What are you going to export from your home
market to another? Maybe it’s wine from South Africa to the
United States, or buffalo wing sauce from the U.S. to Europe. You’ll typically want a deep familiarity
with both the product you want to import/export, the market you’re targeting, or both. That way you’ll understand the value proposition
of what you’re selling, and any jargon or industry-or-market-specific talk that will
help you stand out in a crowd of other importers and exporters. Market research is a big undertaking, but
the basic questions you’ll want to answer include: 1. what is the product or service you want to
sell? 2. Who is your target market or end user—is
it the mass-market consumer, or for use by businesses or governments? 3. What country or countries will you import
from or export to? 4. Finally, who will be your trade partners? Your trade partners could be a manufacturer’s
representative, wholesale distributors, or retailers on either side of the importing
or exporting process. These are the people you’ll deal with, so
you’re not just buying up caviar in France, putting it in a box that says “USA” and
expecting someone to buy it when it hits the ports. STEP THREE: Source your suppliers
When you get in touch with a wholesaler or manufacturer’s representative, you’ll
have a bead on a supplier for your product. Generally, you can also find suppliers through
companies like Alibaba, Global Sources, and Thomas Register. You will need to convince your potential supplier
of the benefits of entering the U.S. market (or another market you wish to sell to), and
figure out the logistics of taking their product from their local warehouse or production facility
to another one, potentially on the other side of the globe. Maybe you’ll become your own supplier. You can investigate what it could cost to
buy an interest in the product or service you want to import or export, giving yourself
an added incentive to find an international home for the goods that you now have a vested
interest in. STEP FOUR: Price your product You know what product you want to work with
and you’ve identified your target market. Next up, figuring out how much to charge. Typically, the business model on an imports/exports
business includes two key understandings: The volume of units sold, and the commission
made on that volume. You might also get paid with a salary or a
flat retainer plus commission if you are an EMC. But you don’t want to make it too low, so
that you won’t make a profit. Your overhead and the specifics of what you’re
importing or exporting—its price, its cachet, its availability—will play huge roles in
dictating your price, of course. In this industry, Step FIVE: Identify your customers It’s one thing to have an idea of who your
customers are or what your target market is, but it’s another thing to actually get them
on the line and have them agree to buy from you, or sell to you. Again, you can’t just send your products
to the Port of New York and start selling your wares to whomever walks by. You usually need to find distributors and
clients, and there are a few ways to do that. If you have a quality website that includes
digital marketing campaigns, your customers may end up finding you. Cold-calling is also a time-honored and useful
tactic. Check with any local contacts you have in
the area, or contact the region’s Chamber of Commerce, trade consulates, embassies,
and so on. These organizations and offices might be able
to give you a local contact list that could be vital help in starting a imports/exports
business. Step six: Finalize the logistics This is your biggest and most complicated
step, and the one that covers a variety of bases, from finalizing your supply chain to
potentially moving into an office space if you’ve started out as a home-based business. This step will also be markedly different
depending on what kind of import/export business you decided to start. If you are an import/export merchant, you
may want to get in touch with a global freight forwarder to serve as a transport agent for
moving cargo—saving you a lot of time and worry about getting your products from the
factory to a warehouse. You’ll give them information about your
business and your intentions for the product, and they’ll arrange the shipping agreements,
insurance, and even the licenses, permits, tariffs, and quotas of working within another
country. If you’re an EMC or ETC, you might do all
of these processes in-house, and need to worry instead about putting money and time towards
marketing your services, or renting out commercial office space as your operation grows. Essentially, you need to start thinking about
importing and exporting as a business, not just as a series of transactions, and make
suThanks for watching. re that you’re taking all the steps necessary
to remain profitable in the months and years to come. Joining an import/export association, finding
a mentor in this space, and getting in touch with local and federal government agencies
will be a huge help in making this happen for you. Outro
That about covers the basics of starting an import/export business. It’s a complex topic that requires a ton
of research and hard work, but the thrill of making your services a part of the framework
of international trade can make it all worth it. Let us know if you have any questions or comments
down below, and subscribe to our channel for more insights into starting or growing any
kind of business. Also, visit us at fundera.com/blog for even
more information on every aspect of entrepreneurship.

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About the Author: Oren Garnes

1 Comment

  1. I love this tutorial. This domain name is up for sale WikiExports.com for a giveaway price on godaddy for $109 you can use it to post nice contents related to exports, imports etc

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