How to Start an Import and Export Business
Of all the entrepreneur ventures to embark on for financial independence, trading should be at the top of one’s list.
Trading may seem too simplistic, unoriginal, and lacking in innovation to succeed, but that’s absolutely untrue. Starting an import and export business feeds in to international market trends, making it a potentially viable path to success.
On the other hand, trading is the fundamental element of civilization, its very lifeblood. If one were to look at civilization as a complex mechanism consisting of millions of cogs, all of them would be in some way related to trading.
As the lifeblood of civilization, trading encompasses everything related to buying and selling of products and services. Can you even imagine anything in your life and culture that is not directly or indirectly connected to it? Of course not.
The best part of trading is that it offers so many different positions within the process for you to pick!
- seller
- company representative
- distributor
- delivery or warehouse worker
- broker
…and many others.
Some offer more social prestige and income than others, and some offer a greater degree of independence.
One of those is the business of imports and exports.
Simply put, exports and imports exist as such because national borders exist.
- If you want to sell a product or a service, produced in your home country, to another country, you are doing exports.
- If you want to buy a product or a service produced in a foreign country, you are doing imports.
Without national borders, there wouldn’t be any distinction between exports and imports, as you would just be trading.
Therefore, consider exports and imports as a system of protecting national economies and workers. One in which profits can be had, even for those new to the scene!
Getting Started with Imports and Exports
Needless to say, whether you specialize in importing or exporting, you will be faced with a barrage of government regulations, requirements, and compliances. From multiple countries!
You would need to overcome that barrage on top of having:
- knowledge in global finance
- business background
- overview of international relations to suss out profit margins
In the export and import business, the perfect profit storm occurs when you find:
- A market/country that can produce and export something at lower rates.
- A market/country that has a demand for that something.
- If government regulations for both of those markets allow for trade to occur at a cost that doesn’t bite too much into profits.
These 3 ingredients form the foundation for any successful export/import business.
However, executing it properly is another matter entirely, largely dependent on your ability to manage information:
- discover information – products, trends, and markets
- analyze information – quantify everything
- verify information – consult experts in the field
- apply information – execute a business plan
Luckily, thanks to the internet, this will be drastically easier to do than in any previous point in history. Many institutions, services, and organizations have already been established to facilitate international trade. ADP payroll being one of the most helpful services. For anyone looking to start an import and export business, Saffron helps you stay legally compliant. It gives you everything you need to follow regulations in an easy-to-follow, hassle-free way.
Beginning Steps In Launching Your Business
When you think about how to start a business, the first step is always to create a business plan:
- Pick a product to import or export.
- Discover all the regulations that apply to that product, both in the country of import and the country of export.
- After taking into account regulations, taxation, transportation, and delivery costs determine your RoI (Return on Investment).
Furthermore, complying with some regulations may sometimes be free. For example, the license for alcohol and tobacco imports – Alcohol and Tobacco Trade and Tax Bureau permit – is free. Nonetheless, don’t expect it to be granted quickly. In fact, it may even take months! Legal expediency in other countries will likely be worse than you expected.
The time swallowed up by complying with regulations should definitely be included in your business plan.
After that, establish your business legally.
Register your business in the state in which you will be paying taxes. This is critical!
Research which state has the least taxation load for exports and imports of your particular product. Taxes are one of the biggest factors that cut into potential profits. Also, secure all the necessary licenses. This similarly differs from state to state.
Next, socially establish your business, which translates to:
- Acquiring a domain name and web hosting service for your business website.
- Creating accounts and keeping them active and prolific on all major social media platforms – Facebook, Youtube, Google+, Twitter, Instagram, Pinterest, LinkedIn, MyLife, TikTok, Plaxo, and many others.
- Creating ad campaigns on Facebook, Bing, and Google.
Consider doing ad campaigns only if you see that you cannot generate organic traffic by cleverly using these free powerful resources.
It is important to do all of these steps in a meticulous manner and with Mata you can actually track these goals and make sure you are on track at all times. It couldn’t get easier than this!
Access to Capital
Profit requires investment. The greater the investment is, the likelier it is that the profit will also be great.
By doing previous steps you have gained a resource of its own – a signaling mechanism that you are a serious person who knows what they are doing. Online social presence also bolsters your credibility.
Depending on which product you picked as your import/export venture, the initial investment will vary greatly. No matter the amount, you will need to attract investors. Mata gives you the opportunity to easily be seen by investors, relieving that stress off your back.
Whether through crowd-sourcing or via traditional means, investors can secure capital. And having upfront capital is crucial for long-term business success for the following reasons:
- Establishing legal cover.
- Establishing your brand equity.
- Proper market scaling without sacrificing quality – starting from town to city to region.
If you don’t have upfront capital, you will not be able to keep up the necessary momentum, exploit opportunities, or cover unexpected costs.
Following Through
Once you have secured the capital, it is time to make things happen with the suppliers of your chosen product. You can find suppliers through many different sources: Amazon, Alibaba, Thomas Register, Global Sources…
After you have picked a supplier for your product, present your convincing case why should they enter the U.S. market, alongside figuring the logistics and costs of transportation.
If the overall costs are inside the boundaries of your business plan, all there is left to do is price your product. In the export/import business, you can expect a 10% to 15% markup.
Lastly, if you have taken your social media presence seriously, you will already be engaging in targeted marketing campaigns to sell the product. In no time, the distributors and customers will find you.
However, it would not be wise to rely on digital engagement only. Contacting your local Chamber of Commerce, trade consulates, embassies, and other organizations may avail you with critical contact lists to speed up your momentum towards financial freedom.
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