If you are looking for a good way to start a successful business from nothing and gave fun while doing it, then starting an import business might be your perfect answer. Aside that this business can accommodate anyone regardless of the size of their investment capital, it also offers the prestige of working with suppliers from all over the world.
If you know the basics of how to start an import export business, you should endeavor engage in such trade because it is highly lucrative and profitable. Though it is very competitive business, it is not complicated.
The import export business simply involves buying and selling of both foreign and domestic goods for a profit. The import business is one I have had a taste of; having played alongside my dad in the importation of sanitary wares and men’s wear; I can boldly tell you that importation is a money-making venture.
Why You Should Start your Own Import Export Business
It is a well known fact today that China is the manufacturing hub of the world, while countries such as USA, Nigeria, UK, etc imports massively to supply the need of the population. Using Nigeria as a case study, it has been established that the local industries cannot meet the demand of consumers; thus the need to import goods other countries to complement local production.
In retrospect, Nigeria also have an abundance of mineral and natural resources; waiting to be exported. In fact, the importation of goods has never been easier than now; due to the emergence of the internet. Importers can now meet manufacturers online, while exporters can also push their products out using the internet as leverage to find buyers.
So if you are ready to tap into this golden opportunity, if you like the idea of running your own business, taking foreign trips a couple of times a year; and most importantly making lots of money, then read on as I provide you with tips on how to start an import export business online from the comfort of your home.
Starting an Import Export Business Online from Home – Sample Business Plan Template
1. Make the Decision
Why do you want to go into importation or exportation? Are you prepared for the risk involved? Are you prepared to hassle with your manufacturers, agents, freight companies, customs, etc? Are you prepared to meet the stringent product conditions of your foreign buyers?
In fact, are you prepared for the stress of importing and exporting? Are you going to focus on importing or exporting? Do you have the needed entrepreneurial skills to succeed? How are you going to raise fund for the venture? These are questions you need to answer before deciding if the business is for you.
2. Acquire the basic knowledge
After you have made your decision, the next thing to do is to acquire the basic knowledge needed to succeed in this business. This is where you have to inquire about the intricacies of running an import or export business. You should be knowledgeable about negotiating and selling as these are two important factors in import and export.
- How it works
An import business is a matchmaker. Foreign manufacturers want a market in your country. You need to find these manufacturers, and establish a solid connection and business relationship with them. The reverse of this scenario is the export business. In this case, you are the manufacturer or supplier of raw materials.
There are many manufacturers looking for foreign distribution. Goods such as sporting kits, house wares, clocks, electronic games, garments, utensils, and anything you can think of can be readily imported; if there is a consumer demand and if you can get the products.
3. Get the Tools You Need to Get Started
You can start your import business at home. All you need is a reliable phone line as well as a high-speed internet connection for email and other over-the-web correspondence. You will also need a PC for keeping crucial business files. You will need a printer and copier as well.
More important than the office equipment is your determination to make the business work. You must bear in mind that the business will move at a slow pace at first, and that you will need to make contacts and sell yourself in order to make profits. But as you go further down the route, you will be able to make sales more easily and sign more contracts that are more lucrative.
4. Define your market and select target product
One of the most important factors you must consider before even pondering on how to start an import export business is to select the target goods. This is where the need for feasibility study comes in .You must know what present imported goods are patronized in America or whatever your country may be. You also need to ascertain the hottest products in demand both locally and internationally.
Should you wish to transact with a certain country, you should know the items selling well there and know your target clients of those goods prior to buying them. I also want to point out that you don’t need to have all the money in the world to venture into importing and exporting; you can start this business at home with minimal capital by becoming a product sourcing agent. This way, you merely act as a middleman between manufacturers and their clients. This endeavor also does not necessitate you to buy any inventory.
5. Write a business plan
If you really want to succeed in the import export business, then you definitely need a business plan. Aside helping you formulate a strategy, a plan will also help minimize your mistakes and prove to your financiers or investors that you have done your calculations well. In fact, no bank will finance your transaction without a business plan.
6. Incorporate your business
You can start importing or exporting goods as an individual from the comfort of your home. But if you want to get the support of your bank, and boost your image or credibility; then you need to incorporate a business. This will portray you as a serious business man or entrepreneur.
7. Build relationship with those in connected to your line of business
Have a good relationship with different business establishment in different countries. You can communicate with family, friends and business partners in those places. Contact the U.S. embassies, Chamber of commerce, business directories and trade associations in those places so that you would gather information regarding foreign distributors and manufacturers.
You will be given a list of manufacturers and industries that can help you start an import export business. Always communicate with the consulate in these countries as preparation for importing.
8. Get the necessary license and clearance
Contact your taxation bureau in your country and get a registration number from them. Know what the requirements for a license are to manage such business in your own land. You also need to check with the custom agency and Chamber of commerce to ensure that trade barriers and embargoes are not present in the countries you wish to do business with.
9. Raise the needed capital
You need to raise cash for your import export venture, unless you intend being a sourcing agent. You can raise money from investors or family and friends. You can also obtain a credit letter from your bank for trading in foreign countries. This will minimize your risk of trading, as banks will protect the goods prior to exchanging money.
10. Making Contacts
If you are going to import, then you need to find a manufacturer but if you intend exporting, then you need to find buyers. Finding business contacts is the most important step in setting up your import business.
How to Find a Manufacturer or Buyer for your Import Export Business
You may have relatives or friends in a foreign country, and you may have previously visited a foreign country and established business relationships there. These are good starting points for finding contacts.
Foreign consulates in your country have links with business who might want to distribute their product offerings in your country. So, consulates can link you up with foreign partners you can do business with.
You can also establish contacts by searching the web with relevant queries. Sometimes, you can find buyers and manufacturers on the same platform. A good example of such a platform isAlibaba.com.
Now, start small, and don’t try to establish contacts all over the world. Which countries have or need the products you want to import / export? Find out about the countries, what they have to offer, and what is generally in demand.
After getting some contacts, it’s time to reach out to them. A massive email campaign is best. Send an email introducing your company and your intent to import products from the manufacturer or supplier. Tell them the little you know about them, and ask if they would be interested in a possible business relationship with you.
After signifying their interest in their reply email, send another email to verify whether they have the exact goods you want to import and how they operate their business. Request any information you need as well as samples or a catalog of the company is a manufacturer.
11. Market your Business
Another important thing to remember when starting an import export business is to begin a mailing campaign so that you can market your business to your foreign contacts. Tell them about the advantage of selecting your firm if they choose you to be their import-export agent. You can inquire from your contacts in those countries, the names and corresponding addresses of companies that would like to sell their goods in America, Nigeria or wherever you are situated.
After you have obtained names of potential clients, speak to them regarding marketing their products. Tell them about trade shows you wish to join as well as your meetings with distributors and sales representatives. Your clients would therefore build their confidence and trust in your import export company.
12. Finalize the relationship and seal the deal
If you are an importer, you must seal the deal before your goods will be shipped to you. If you are an exporter, you must agree with the buyer and provide the goods upon receiving the money.
After signing an agreement with the supplier or manufacturer (as drawn by your attorney), you will be granted the right to import the goods into your country or export from your country; as one of their designated import / export partners. The manufacturer will pay you the specific commission quoted to the distributors on top of the price of the goods. And you will be given catalogs and samples for your use in distribution.
13. Arrange for shipping
Since you will be importing / exporting goods to and fro another country, you will need to make arrangements for shipping. You will need to contact and hire a freight forwarder to help you handle the important steps of the shipping the merchandise.
This individual or firm provides routing information, books cargo space, and quotes shipping rates. You can find freight forwarders easily by checking directories of businesses in your state or country.
14. Start importing and promotion
With the previously discussed steps well taken, you can start receiving shipments, promoting your goods, and making money. With time you can grow your business by importing a wider range of products from other manufacturers in other countries.
15. Grow your import export business
In conclusion, you need to consider the commission you will get from the manufacturers; that’s if you decide to start as an agent. This will however depend on your sales. Make sure to write agreements regarding your commission. As an agent, you can ask for a 10% commission fee from a product’s sales price.
Another important factor to starting an import export business is to sign agreements that you have established with the manufacturers. You must make sure that the company you choose is legitimate and reputable. You can tell your lawyer to make a contract regarding this matter.
16. Challenges of Starting an Import Export Business
Succeeding in the import business doesn’t really require previous experience, but you should be very good at keeping things organized and at paying constant attention to little details. If you have that innate ability to sell plus the desire and determination to make it work for you, import business might be the best thing to happen to you.
You will certainly face some challenges when you are just beginning, such as figuring out how to handle shipments through a freight forwarder, making sure your manufacturer produces based on your required standard (imports), ensuring your product meets your buyers standard (exports), and creating solid contacts with reliable suppliers. But after a short time, you will overcome these challenges and find them easy to handle.
In conclusion, i want to clearly state that this brief guide is meant to cover only the basics, we have skipped some technical steps that may involve seasoned professionals such as bankers and attorneys. You will need to find out more about these from other resources that are more comprehensive.
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