Venturing into an import-export business opens great opportunities for entrepreneurs looking to tap into the global market. This profitable opportunity allows you to connect with buyers and suppliers across borders. Distributing goods across the world increases the potential for profit and exponential growth.
Unfortunately, this market is highly competitive and sometimes over-saturated. Some countries also have strict import-export policies that may not favor your business. Nonetheless, below is a three-step guide on how you can start an import-export business from scratch.
1. Get to Know the Import-Export Market
You should begin by researching the basics of the import-export business. While there’s a lot to learn, start with the following:
- Identify products that are in high demand
- Choose between importing and exporting
- Know the regulations for starting an import-export business
- Know the restrictions for various products and countries
- Identify the companies in the import-export space
- Identify suppliers and learn the process of paying suppliers or receiving payments from abroad
- Learn about various taxes involved
- Prepare the logistics strategy to follow across borders; this involves finding good transport systems or searching for shipping containers for sale for products that require shipping.
Part of the basics is registering your import-export business, developing a business plan, and raising capital. Startup costs for this business vary depending on the type of product you choose.
2. Choose a Product and Country
The next step is identifying your most preferred product and country. Like any other business, you should pick an industry or product you are passionate about. Your choice of product primarily depends on its demand in the domestic market. Similarly, you should pick a supplier with quality products.
Choosing a country to trade with is quite complicated, and you should seek expert advice. Most countries have trade policies and economic sanctions that can affect your chosen products. The same applies if you’ve picked export business. Whether you are exporting homegrown products or exporting products from a different country to another, you should ensure that your business doesn’t go against various trade policies set up by both countries.
Consider starting with everyday products that can easily be transported across borders. This will help you understand the intrigues of moving goods. You can then gradually expand to more costly products as you’ve already established connections with vendors and other players in the business.
3. Create a Logistics Strategy
Logistics is the backbone of import-export businesses. You can decide to outsource your logistics operations or handle them in-house. However, managing the supply chain for cross-border transactions often proves difficult, and most businesses prefer handing these processes to global freight forwarders.
Freight forwarders handle shipping arrangements, licenses, transit insurance, tariffs, permits, and other issues involved with shipping goods to another country. Working with them simplifies all business processes as they take over the compliance burden.
Starting an import-export business isn’t as complicated as it seems. However, it takes a lot of time and effort, unlike operating locally. Identifying and connecting with suppliers, raising capital, getting the necessary licenses and permits, and maneuvering other legal provisions to move goods from one country to another can prove daunting but not impossible.