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So how can one get involved in an import and export business?
One: You can start an import and export business with your own money
Most people think of getting involved by buying products abroad with their own money, at their own expense. This is the most logical and preferred way for most. Buy a product, pay for it, take title to the goods, import your purchases into the country you want to sell them in, sell them, and do it all over again.
Two: import and export agent: bring buyers and sellers together
If you are familiar with a particular country, especially if you have been there several times and already know what is made there and where to find suppliers of those products, you can offer your knowledge to others. If, for example, you have been to Thailand many times, may have lived there before, and are familiar with Thai produce, you can approach a buyer from a retail store in the United States, in the city where you live or elsewhere, and offer to be your buyer. , especially if you carry products from Thailand. In this case, the US-based retailer may contract you to place an order for a product that he sells from Thailand. You will order the product in Thailand, assemble the shipment, pay for the product not with your money but with your money, and ship the product to your store in the United States, with your store’s name as the consignee on the shipping documents. For his services, the US-based retailer-importer will pay him the agreed commission. The commission amount is negotiable, not a fixed percentage. The amount may depend on the amount of time you spend putting together the shipment, the overhead associated with the export side of the process, the expenses you will incur in the country of origin, the need to travel to and from the destination manufacturer. Factory or deal with export shipping company. The retailer will be the importer, he will pay not only for the merchandise but for the cost of preparing the export documents, packaging and actual international freight from the country of origin, Thailand, to the destination, wherever his store or warehouse is. . His commission can be a percentage of the total value of the invoice or an amount negotiated between the two of you. Under this scenario, he is using other people’s money, but his experience. You can start tomorrow. Obviously, if you have never been to Thailand, you may not want to offer your services as an import and export agent for Thai products.
There are two basic variants of this participation. One described above where his commission is paid by the importer on whose behalf he has worked. Similarly, however, while you are in Thailand, a Thai manufacturer may offer you a sample of their product to present to prospective buyers in the United States. In this case, you can return from your last trip to Thailand as a representative of the manufacturer, perhaps not with an exclusive contract to represent your products in the United States, but with the understanding that if you find a buyer for your product who wants to place an order , he, the manufacturer based in Thailand, will pay you an agreed commission on the shipment.
From these two examples, it’s clear that you can work with other people’s money, not just your own, by putting buyers and sellers together where either or both parties can pay you commissions, both the buyer and the seller. and the method is the easiest way to get started in an import and export business.
Three: import export sourcing agent
You can work as an independent import-export sourcing contractor, an import-export business involvement that is in the same category as described above, but with more responsibilities throughout the import-export process. Let’s say, for example, that a clothing store in the United States will hire you to find a manufacturer in Bali, Indonesia that can make garments to their product design specifications. Armed with the drawings of the product given to him by the retailer, he would seek out more than one potential manufacturer in Bali to prepare samples of the product that the retailer will eventually order in quantity. Each manufacturer would prepare the sample as well as a quote sheet showing quantity discounts and lead time. The retailer would select one of the vendors it has contracted with based on product quality, price, and delivery time, and then ask you to award the contract to that vendor. You would then have to oversee production, quality control, document preparation, and pay for the goods with the retailer’s money, not yours, who would become the actual importer and consignee on the shipping documents. As mentioned above, the retailer-importer would pay you on a commission basis, plus expenses, and possibly hold it in advance so that it will be available next time.
Four: Export Shipping Broker
The latter is an example that relies once again on using other people’s money to bring buyers and sellers together. In this example, a manufacturer in Thailand is offering a container load of a product, for example, toys. The consignment is ready to be shipped, and must be purchased as is, whatever the qualities of each style of item inside. The shipment can be varied, and may contain some attractive products but also some less marginal ones, perhaps even seconds, or discontinued products. The manufacturer-exporter is looking for a buyer. You are an agent who knows who may be interested, who are the buyers of this type of product. It could be a store in Miami, Florida or in Berlin, Germany, or in any other country where you know buyers for this type of product. You provide samples from the seller-exporter to the buyer-importer. If the buyer agrees to buy the container at the agreed price, you can handle the entire sales transaction in what could be a back-to-back letter of credit using your bank in Denver, or wherever you are. The buyer in Berlin pays you an L/C in the amount of $40,000 and once the funds are cleared at your bank, your bank cuts an L/C in the amount of $30,000 to the seller’s bank in Thailand and you You keep the difference minus bank charges. . The container goes from Thailand to Berlin, Germany, not through the United States; never takes title to the property. Just connect the seller with the buyer and negotiate the deal. It goes without saying that the export shipment can be negotiated by countless other intermediaries who will find the export offer from the manufacturer-exporter located in Thailand.