How to Start Import/Export Business without Investment

Export and import is categorized under international trade. To trade internationally you need to abide by strict rules of destination country and cargo origin.

Cargo requires special packaging, labeling, quality products and other safety standards to pass inspection. Other requirements to start import business are office location, incorporation and funding.

International trade thrives due to the forces of demand and supply. The business generates billions of dollars worldwide and is attractive because of huge profit margins, commissions and demand.

Import/export is huge business and requires adequate planning, networking, strategizing and focus. Global merchandise and trade is growing everyday due to increased access to information technology. The single global market is not just a fad but a reality.

Qualities of an Import/Export Merchant

Import/export is serious business and you need to have the right mindset. International trade involves lots of networking, documentation and funding.

You need serious organization, sales and marketing skills. You should have a background in import/export, adequate knowledge of foreign markets, price differentiation and shipping costs.

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Top Trade Countries

Technically you can export goods to any country in the world. However there are major players in the trade that have solid export/import structures.

Major export/import countries are the United States of America, Australia, Canada and United Kingdom. Others are Taiwan, India, Germany, China, Japan, Mexico, Singapore and South Korea. The commodity and demand dictates the country of interest.

Why is export/import Good Business?

Importers and exporters leverage on demand of products from other countries. Sometimes manufactured good in a certain country are expensive in comparison to importing the same item.

The imported product could have better quality and is cheaper than domestic product. An importer/exporter leverages on the price differentiation, quality and profit margin to carry out the trade.

Another reason why the business thrives is because some commodities grow only in certain countries. Other factors include climatic conditions, resources, pollution, weak currency, government control and technology.

Exportable Products

Imports and exports are based entirely on demand and supply. Exportable products are commodity, farm produce, textile, beverages, champagnes and livestock. Others include furniture, vehicles, solid minerals, accessories and electronic devices.

Types of Import/Export Business

There are a many types of export business templates. The three major types are export management company, export trading company and import/export merchants.

An import/export merchant is a private company or individual that carries out import/export. The general merchant identifies demand products, contacts manufacturers and ships the items. The import merchant assumes the risks and profit of his venture.

Export trade companies generally sell merchandise. The company networks with foreign buyers and domestic exporters. The export management company job description is management of export operation on behalf of domestic companies.

The export management company handles the entire process of shipment and documentation. Most export management companies specialize in a single product, goods or commodity. Both export trade and export Management Company’s work on commission and retainer arrangement.

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Target Market and Niche

Write an export/import business plan and carry out a feasibility study. You need to determine your target market, potential customers, product and markets.

Do lots of marketing research to locate trading partners, import/export destinations, manufacturers, suppliers and buyers. Narrow your field by focusing on a niche market and  list of products. This strategy provides specialization in your chosen industry.

Actively seek domestic manufacturers willing to export. An export management company is a good way to start however you need vast knowledge of export requirements of your chosen niche.

Carry out Market Research

A comprehensive market research positions your enterprise towards sustainability and profitability. Parameters to explore while carrying out your research are type of produce, end users, destination countries and trade channels.

Trade channels involve manufacturer representatives, retailers, distributors and wholesalers.

Import/Export Startup

The startup cost differs according to your business plan. Home based import/export merchants only need a dedicated work space at home.

The basic office equipment are laptop/computer, printer, fax, telephone and modem. Startup cost for home structures is relatively low and require little investment.

If you want to work outside the home, lease an office space, equip and hire relevant staff. Things required to run an office are stationery, phone, answering machine computer, software, printer and fax.

Importer/exporters make money basically on commissions and margins.

Things to Consider as an Importer/Exporter

• Get IE code
• Open a current account or domiciliary account
• Incorporate as a Limited Liability Company
• Print stationery such as letterhead, business card, invoice
• Equip your office
• Secure irrevocable letter of credit
• Choose a niche
• Network with manufacturers/suppliers and buyers
• Hire professionals in export/import trade

Export Requirements

To export any commodity you should understand the basic requirements. You need to receive a pro forma invoice, open letter of credit and verify merchandise shipment.

You then receive documentation from exporter, fill the appropriate customs papers and collect the merchandise.

Import Requirements

Import requirements involve pro forma invoice, open letter of credit and merchandise shipment verification. You receive export documents, clear customs and collect merchandise.

How to Secure Import/Export Deals

To secure import/export deals contact manufacturers and suppliers. Travel abroad, attend seminars, trade fairs and export promotion council events.

Another way is to contact foreign trade offices, embassies, department of commerce & trade and use online resources. Develop an effective marketing plan and target potential partners.

You are also required to join associations relevant to your niche business.