THE FACTS ABOUT IMPORT - EXPORT
It Really Can Work!
The import-export business is often mentioned as a business
venture. Quite often it is the subject of courses and vast
manuals running into hundreds of dollars in cost. Similarly,
the profits that are offered run into many hundreds, even
thousands of dollars. You may well start to think 'can it be
really true?'.
Well, the fact is YES IT CAN. And, even better news, you do
not need an expensive course of tuition to be able to trade
in import-export. You just need to know a few basics and you
can soon be buying and selling overseas for vast profits.
And, that's all it really is - buying and selling! Read on
for all you need to know. Even without capital!
Setting Up
One of the most important things in import and export is to
set up properly. Your business must look professional if you
are to have access to big profits without capital. Many
quite profitable import-export firms actually know very
little about the business - but just make it look as if they
do!
It is vitally important to have some quality business
letterheads showing name, address and 'phone number. These
must be of the best quality. You will also need a bank
account but your own personal bank account will suffice to
start.
All your correspondence and dealings must be carried out to
the highest standards. Making a good impression will gain
you entry to the biggest and most lucrative deals.
Once you are set up you should decide to start with either
import or export, only trade in both at a later date. It is
possible a little easier to start with importing - but you
really have a free choice.
About Importing
As you would expect, importing is simply buying goods
overseas and bringing them into the USA. There are several
ways you can do this. But, the best way is to look for a
requirement in the USA and then look for goods overseas to
fill that demand. This way you will not be buying goods
until you have found a buyer. There is little chance of
having to buy imports you cannot sell.
The best way to locate sources of imports is to read various
trade journals. Look in the trade journals at your main
library. You will find classified advertisements from firms
overseas who want to sell their goods in the USA. Once you
become established as an importer firms overseas will find
out about you and send details of lucrative products you
might be interested in automatically.
The best countries to import from are less developed ones.
Here costs of making goods are much less than in the USA.
Something that will sell here for many dollars will often sell
in low-cost countries for penny. And, the cost of transport
is not excessive!
Ideal countries to import from include those in the Far East
which are well known for producing very cheap goods. Some
cheaper European countries are also good sources. However,
in most EEC countries and places like the UK products
are not cheaper than in the USA. In some places they may be
more expensive, so these must be avoided if you want to make
really big profits.
You can virtually import anything you like. But, it is wise
to avoid things which are bulky or difficult to transport and
things which could be considered dangerous. Try and stick to
'safe and boring' things for the best chance of success.
Very few things will not be allowed to be imported.
Once you have suitable ideas for imports you should get
details from the supplier and an idea of the costs. Get
details of the transport costs too. These can be obtained
from a freight forwarder, who is a kind of travel agent for
goods!
It is then best if you can sell the imports before you
actually buy anything. Make up a small catalogue of your
product (start with one only) and send to potential buyers.
These might include wholesalers, manufacturers, large shops -
or you could sell the product yourself by mail order.
Locating a particularly innovative or even cheap import can
lead to a very successful business in a very short time.
The Import Procedure
When you find a customer (keep trying!) ask them to pay for
the goods in advance. Contact your supplier and place an
order. You should ask them for credit terms of 60-90 days.
As most are keen to export to the USA this is not unrealistic.
When you have a delivery date from the supplier pass it on to
the buyer. You will be already earning interest on their
advance payment!
Import is so easy because it will be up to your foreign
supplier to arrange for transport and include it in the price
(but always check it with a freight forwarder!). When the
goods arrive you simply notify the buyer that they are read
for collection. This might be from a particular port - or
you can arrange delivery using a haulier if this is included
in your price. Very simple!
A special procedure exists for paying for imports. When you
have placed an order with an exporter ask your bank to issue
a letter of credit in the buyers favor. This promises them
payment after the agreed period if the order is supplied
correctly. It also ensures that you only have to pay for the
order if it is correctly supplies - you don't pay if it is
wrong. When your order is received correctly simply inform
your bank and they will make payment to the supplier
automatically within the terms agreed. This method of
payment is widely known as safe i.e. you can't pay for the
goods unless they are received exactly.
Once you have imported goods successfully you should continue
the process to build up a regular trade. Try and get repeat
orders from the same customer. This way you are adding a
lucrative mark up for little more than transmitting an order
between two companies!
About Exporting
Exporting is very much the same as importing - only in
reverse! But there are a few differences and generally
exporting involves you in more organisation than importing.
Make sure your profits are higher to cover this.
The very best way of exporting is to look for goods required
overseas and try and supply that demand from USA made goods.
Look in the various trade journals where you will find
various overseas companies advertising for suppliers of USA
goods.
Because exports are vital to the USA, you can get a lot of
Government help in exporting. Simply contact them and indicate
what sort of goods you wish to export and they
will provide you with details of potential buyers.
When you have details of potential buyers you should find a
product source in the USA. In most cases it is best to go
straight to the manufacturer and even small ones are usually
interested in expanding their markets. Then, send details of
products available to the buyers.
If you send out enough literature overseas you will receive
requests for quotations. Compile a quotation carefully. To
the manufacturers price you must add your profit and the cost
of transport obtained from a freight forwarder. Once you
have sent out your quotations do be prepared to wait several
months for the possibility of an export order.
You should decide to export anything that is wanted overseas!
Hardly anything requires permission to be exported. Import
licences at the other end are the responsibility of the
buyer. The best countries to export to are those where costs
are higher or similar to the USA e.g. EEC countries or the
UK. Do not try to export to low-wage countries, such as the
Far East. You will find it very difficult to be competitive
and profits will be very small.
The Export Procedure
When you receive an export order you should ask the buyer for
prompt payment by letter of credit. The buyers bank overseas
will arrange this. It will ensure you are paid as long as
you deliver the goods with no chance you will lose the goods
and not be paid!
Place an order with your USA supplier and inform the buyer of
this. You should then instruct a freight forwarder to
arrange transport from your supplier to a port convenient for
the buyer. You can do this yourself but the cost of having a
forwarder do this makes your job much easier.
When the goods are ready simply hand them over to your
forwarder to arrange carriage to the buyer. All packing,
insurance, shipping and customers matters are handled by
them. Just as when importing, all customers matters, taxes
etc. are the responsibility of the buyer - not you as agent.
When the buyers bank receives confirmation that you have
delivered the goods intact they will release what you are
owed. The buyer cannot stop payment unless you are at fault
so this is very safe. If you have made arrangements for
credit with your supplier you can earn interest on this money
and you would not have needed any capital to start.
Follow up each export transaction with a view to getting more
orders. Also consider any imports your overseas buyer might
offer you. A two way trade with contacts overseas is a good
way of building up a long and lucrative trade.
Summary
The import-export business is considered by many people as
very profitable - and this is true. Unfortunately, many are
put off because it looks so complicated. In reality
import-export is little more complicated than mail order, but
over international boundaries. The knowledge of 'how to do
it' can be gained in one transaction and is extremely
valuable.
One of the great advantages of mail order is that it is
rarely essential to have any significant capital to start.
The payments system makes this possible. And, it is not only
large corporations who deal in the business - you can make
your business look large and professional from the start!
There are already many small one-man import-export business.
And, as international trade grows, bound to be room for more.
You really do not need to undertake extensive courses or buy
expensive manuals to start up in import-export. The BOTB is
an excellent, easy way of starting in export. In addition,
your local Small Firms Service is a useful source of help.
Telephone Freefone 2444. Other than that there are no
magical way of finding an import or export opportunity. It
is just a matter of 'taking the first step'!
