Import / Export Business: A Guide to Getting Started
We walk you through the process of setting up your own import/export business. But why should you consider getting into an import/export business? Well, for one, an import/export business does not cost much to setup. You can get started with an investment no more than a couple of thousand dollars, a computer and a phone. Yes, you will need to develop the right contacts – which really are worth their weight in gold. There’s more to it than just that, which we discuss here. Read on for a step-by-step guide for getting into the import/export business.
Step 1. Ask yourself Why Import/Export Business?
Why do you really want to get into the import or export business? Are you truly prepared for hardships and risks of the job? For example, are you aware of how hard it is to move so many pieces altogether, as you hassle with suppliers, agents, custom officials, freight companies and so on? Importing and exporting offers a plenty of financial rewards, but it is also a very stressful thing to do. Are you prepared for all that? Before you get into the business, try to answer these questions.
Tea Production India: By building on a proud legacy of enterprise that spanned nearly two and a half centuries, India has acquired an exalted status on the global tea map. The country is the second largest tea producer in the world with production of 1,197.18 million kg in 2014-15. Interestingly, India is also the world's largest consumer of black tea with the domestic market consuming 911 million kg of tea during 2013-14. India is ranked fourth in terms of tea exports, which reached 197.81 million kg during 2014-15 and were valued at US$ 619.96 million. The top export markets in volume terms for 2014-15 were Russian Federation (39.14 million kg), UK (18.58 million kg) and Iran (17.53 million kg). In terms of value, the top export markets were Russian Federation (US$ 94.43 million), Iran (US$ 75.73 million) and UK (US$ 57.74 million). All varieties of tea are produced by India. While CTC accounts for around 89 per cent of the production, orthodox/green and instant tea account for the remaining 11 per cent. Production of tea reached 1197.18 million kg in 2014-15. Around 955.82 million kg was produced in North India and 241.36 million kg was produced in South India. India has around 563.98 thousand hectares of area under tea production, as per figures for December 2013. Tea production is led by Assam (304.40 thousand hectares), West Bengal (140.44 thousand hectares), Tamil Nadu (69.62 thousand hectares) and Kerala (35.01 thousand hectares). According to estimates, the tea industry is India's second largest employer. It employs over 3.5 million people across some 1,686 estates and 157,504 small holdings; most of them women.
Step 2. Learn the basics of the business
Once you’ve decided that the import/export business is for you, arm yourself with the basic knowledge of the business. Find out about the details of running an import or export business. Find out from a mentor or someone who is a part of the industry about how to negotiate with suppliers, exporters, customers, shipping companies, etc. Work as an apprentice or an intern in an export/import firm and try to understand how things are done.
The EU-28, China and the United States have been the three largest global players for international trade since 2004 when China passed Japan. In relation to trade balances, China and Russia have had the biggest annual trade surpluses since 2005, while the United States had the largest annual deficit. EU-28 international trade in goods with the rest of the world (the sum of extra-EU exports and imports) was valued at EUR 3 383 billion in 2014 — see Table 2; both imports and exports decreased in comparison with 2013, but this reduction was larger for exports (EUR 34 billion) than for imports (EUR 4 billion) . As a result, the EU-28’s trade surplus narrowed from EUR 52 billion in 2013 to EUR 22 billion in 2014. After experiencing a sharp fall in both exports and imports in 2009, the EU-28 saw its exports rise to a record level of EUR 1 737 billion in 2013, and then fall again to EUR 1 703 billion in 2014. This decrease can be attributed to two categories of commodities: mineral fuels and lubricant products (SITC 3) and raw materials (SITC 2 and 4), for which exports fell by 10.6 % and 4.8 % respectively in 2014. There was also a reduction in the value of EU-28 imports in 2014 for the same two product categories (-11.4 % for mineral fuels and -4.4 % for raw materials) which was in contrast to the rise in imports recorded for the other categories. As a result, total imports remained quite stable in 2014 (a change of -0.3 % compared with the year before) and were valued at EUR 1 681 billion. Germany remained by far the largest player in relation to extra EU-28 trade in 2014, contributing 28.0 % of the EU-28’s exports of goods to non-member countries and accounting for almost one fifth (18.7 %) of the EU-28’s imports (see Table 3). The next three largest exporters, the United Kingdom (11.6 %), Italy (10.6 %) and France (10.2 %), remained the same as in 2013, and were the only other EU Member States to account for a double-digit share of EU-28 exports. The United Kingdom (14.4 %), the Netherlands (14.2 %), France (9.6 %) and Italy (9.1 %) followed Germany as the largest importers of goods from non-member countries in 2014; the relatively high share for the Netherlands can, at least in part, be explained by the considerable amount of goods that flow into the EU through Rotterdam — the EU’s leading sea port. The largest extra EU-28 trade surplus in goods, valued at EUR 162.4 billion in 2014, was recorded by Germany, followed by Italy (EUR 28.1 billion) and Ireland (EUR 23.5 billion).
Step 3. Get the office equipment you need to get started
You can start your import/export business from home itself. You don’t really need to rent office space, at least at the start. You can rent office space later, when you’re established. All you need at the start is a computer, a printer, a copier and a fast and reliable internet connection – that’s it! Office equipment isn’t important for an importer – what’s important is focus and a determination to make things work despite the odds, as there will be a plenty of lean periods.
Step 4. Identify your target market
Now, even before you’ve got the import/export business going, identify your target market and the goods that you plan to export/import. Find out what are the goods that are in demand in your country and find suppliers abroad who are capable of satisfying the demand. Similarly, identify what’s most in demand in a particular foreign country of interest and export the goods from your country.
Your job is to connect the suppliers with the consumers. You should conduct a feasibility study to find what’s in demand the most. Your job initially will be to work as a product sourcing agent and as a middle man between manufacturers and retail or wholesale stores.
South Africa's trade relations and development co-operation with the European Union are governed by the Trade, Development and Co-operation Agreement. The Trade, Development and Co-operation Agreement has established a free trade area that covers 90% of bilateral trade between the EU and South Africa. The liberalisation schedules were completed by 2012. South Africa is the EU's largest trading partner in Africa. A member of the African Caribbean Pacific group of countries, South Africa is by far the strongest of sub-Saharan Africa's economies. South Africa's exports to the EU are growing and the composition of these exports is becoming more diverse. South Africa is gradually moving from mainly commodity-based products to a more diversified export profile that includes manufactured products. South Africa's primary exports to the EU are fuels and mining products, machinery and transport equipment, and other semi-manufactured goods. EU exports to South Africa are dominated by machinery and transport equipment, chemicals and other semi-machinery.
Step 5. Write a meticulous Business Plan
You need a business plan for your import/export business. It should be something that helps you put your business model into words – in a way that can be understood by potential investors or business partners. A business plan shows that you have clearly thought out what is required for your business to progress.
Step 6. Incorporate your business
If you’re to get loans from a bank or support from other financial institutions, you cannot run your business as an individual. You will have to incorporate the business which would portray you as a serious business person. Consult with a solicitor on how to proceed with this as each country has its own laws on incorporation of a business.
Step 7. Establish relationships with foreign distributors and manufacturers
As an importer/exporter, you will have to find great contacts abroad among suppliers and manufacturers and import/export agents. You will have to find business partners. For this you can use the power of Google to identify the right business partners. You will also find great business partner opportunities here on Liverix.com. Check out the business profiles on our site and find business partners you can work with.
The latest export statistics of India’s Ayush and herbal products have revealed that India stands as second leading exporter in the world accounting for Rs.1318.69 crore for the year 2010-11. The latest export statistics of India’s Ayush and herbal products have revealed that India stands as second leading exporter in the world accounting for Rs.1318.69 crore for the year 2010-11. As per the latest statistics available from Pharmexcil, China is the top country leading in the world in the export of herbals with $1329.72 million followed by India with an export figure of $ 790.56 million for the year 2010. “We are second only to china in the world in the exports of Ayush and herbals. Of the total Rs.14000 crore pharmaceutical exports, India’s Ayush and herbals contribute approximately Rs.1400 crore. We have a huge potential to grow and in the coming days if our exports grow at 20 per cent every year we can beat China by 2020,” said Dr P V Appaji, DG, Pharmexcil. From an export of Rs.591.43 crore in 2008-09 to Rs.701.44 crore in 2009-10 India’s Ayush exports have seen a whopping increase of Rs.110.01 crore during in a period of just one year. While in the subsequent year 2010-11 this phenomena of increase has not been maintained. The export figure for Ayush products for the year 2010-11 accounts to Rs.711.12 crore which is just an increase of Rs.9.68 crore from the previous year.
Step 8. Get the requisite licenses and clearance
Get in touch with the taxation bureau in your country and apply for a registration number. Find out about the documents you need to submit for this license, and also discuss what needs to be done with the local customs office and trade organizations. Find out if there are any trade embargoes are in place against the countries where you
plan to do business.
Step 9. Raise funds for your business
Cash is always in short supply and you can never have enough of it. Raise start-up cash for your ventures from friends, family and other investors. Get a letter of credit from your bank for trading abroad. This way your goods will be protected by the bank credit till you till the final financial exchange is made.
Step 10. Find Business Partners Abroad
You need to find a business partner abroad from whom you can source the products you need, or act as a supplier for your products when you export them. Finding business partners abroad is an important part of your plans and you can find them here on LIVERIX.com. You must have reliable contacts abroad if your import/export business is to succeed. Start with just a few contacts initially, and build them up gradually.
A partnership is an arrangement in which two or more individuals share the profits and liabilities of a business venture. Various arrangements are possible: all partners might share liabilities and profits equally, or some partners may have limited liability. Not every partner is necessarily involved in the management and day-to-day operations of the venture. In some jurisdictions, partnerships enjoy favorable tax treatment relative to corporations.
Step 11. Follow Up with Your Contacts
It’s not enough to have business contacts; you have to reach out to them using a systematic email campaign. Explain what your company does, what are the products you export or are looking to import and ask them whether they would want to establish a business partnership with you. It usually takes several emails before you’re able to finalize a deal.
Step 12. Work hard on your marketing
As an exporter/importer, you need to have a systematic marketing strategy in place. You will have to explain to potential business partners the advantages of choosing your firm. One of the ways to do that is to setup a profile on Liverix.com and post ads, to notify potential business partners in foreign countries about your business. You should state the business name and a full address for correspondence. It is important to build the trust and confidence of potential business partners in your firm.
Step 13. Formalize your relationship with a business partner
The next step is to seal your deal with a business partner before having your goods shipped to you. On signing the agreement with the manufacturer or supplier, you will be granted the right to import or export goods into or out of your country. You will be paid a certain commission by the manufacturer and also be given catalogs and samples to be used in distribution. Ensure that the companies you’re signing business deals with are legitimate and above board. Hire a solicitor to help with the contract signing.
Step 14. Negotiate with shipping companies
The most important thing you should do as an importer/exporter is to have good relationships with shipping companies. This is important as you will need to hire a freight forwarder to ship the merchandise. It’s easy enough to find freight forwarders, do look up the business directories in your state or country.
A shipping container is a container with strength suitable to withstand shipment, storage, and handling. Shipping containers range from large reusable steel boxes used for intermodal shipments to the ubiquitous corrugated boxes. In the context of international shipping trade, "container" or "shipping container" is virtually synonymous with "(standard) intermodal freight container" (a container designed to be moved from one mode of transport to another without unloading and reloading).
That’s it. If you follow the steps given in the Guide to Getting Started in an Import/Export Business you will be well on your way to making a lot of money as an importer/exporter. Just be persistent and stay determined, even during the lean times. Your patience will surely pay off. We wish you all the success.