Every year, trillions of dollars worth of goods are transported around the world. When a ship blocked the Suez Canal in March of this year for a week, it prevented approximately $8 billion dollars worth of goods from reaching its destinations across the globe.
There is good money to be made in importing and exporting if you know what you’re doing, which makes it an attractive proposition for many. But it’s not something that can be entered into lightly. You will need to spend your initial investment wisely.
So how do you go about setting up an import/export business?
Find Your Product Niche
Do your research and find any gaps in the market. What do people want that you will be able to supply for them?
You will also need to know the ins and outs of the trade laws in the countries you are exporting from and too. There are different rules and trade agreements between various countries and certain products may have a different set of laws altogether. Find a good customs broker you can trust to guide you through the process, they could save you a lot of money.
Finding the right product set might not be easy. You either need to find a product that is popular, but you can get cheaper, or a product that is available in other countries that you can import to fulfill the need.
Depending on your niche, you might be selling low volumes of high-priced products, or work on a volume-based model where the margins are relatively low, but sales quantities are high.
Choose Your Selling Platform
How are you going to get your product in front of the right people? You could build your own platform and devise a marketing and SEO strategy to drive traffic to your site, but that can take a huge amount of resources.
Many people choose popular platforms such as Amazon or eBay to sell their products, leveraging the huge potential reach and selling tools in order to make the process as easy as possible. If you are thinking of going down this route you will need to factor in the costs from each platform into your profit margins.
There may be other, niche sites you could use in various countries that may work for some types of products.
Find The Best Suppliers
Once you’ve discovered a product, you need to find the best supplier. To do this you need to become an expert on the product and how it is produced so that you can judge which supplier is right for you.
You want to find the right combination of product quality, price, and shipping. Often, mass-produced products are sourced from overseas for places such as China but the costs of production are coming down in many areas around the world.
Before committing to anything, ensure that you get samples of the products. Sometimes suppliers are happy to give you them for free or may charge you. Don’t be put off by this, it will be worth it to not have a warehouse full of unsuitable stock. It will also allow you to compare the products from a number of suppliers far better than looking at prices and pictures.
Shipping Your Products
The logistical side of your business is how you will get your products to your customers. There are many ways to do this. You can choose to hold stock in a warehouse of your own and transport it to your customers or arrange to have it shipped directly from the manufacturer if they offer that service.
When looking for a freight partner, again you need to find a company that is affordable and reliable. After all, if you gain a reputation for late delivery or damaged goods, then you aren’t going to be in business for long.
The freight company will be able to arrange all the logistics of shipping including the insurance, documentation, and any necessary quotas and tariffs that apply to your delivery.
There are a number of good freight options on the market and many of them are taking steps to reduce their environmental impact, which could be a selling point for your business.
While there are profits to be made from setting up your import-export business, it takes a keen sense of the marketplace, a good selection of suppliers, and keeping tight control of costs. You might not pick the right product the first time, but that doesn’t mean you won’t succeed with another.