So how can one get involved in an import export business?
One: You can start an import 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: bringing 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’ve been to Thailand many times, may have lived there before, and are familiar with Thai produce, you might approach a buyer at a retail store in the United States, in the city where you live, or elsewhere, and offer to be your buyer. , especially if you are carrying products from Thailand. In this case, the US-based retailer may hire 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 name as the consignee on the shipping documents. For his services, the US-based retailer-importer will pay him the agreed commission. The amount of the commission is negotiable, not a fixed percentage. The amount may depend on the amount of time you spend assembling 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 location 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 preparation of 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 introduce to potential buyers in the United States. In this case, you may return from your last trip to Thailand as a manufacturer’s representative, 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 is willing to order , he, the Thailand-based manufacturer, will pay you an agreed commission on shipping.
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 buyer and seller. and the method is the easiest way to get started in an import 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 your product design specifications. Armed with the drawings of the product given to him by the retailer, he would scout more than one prospective manufacturer in Bali to prepare samples of the product that the retailer would eventually order in quantity. Each manufacturer would prepare the sample, as well as a quotation sheet showing quantity discounts and lead time. The retailer would select one of the vendors he has contracted based on product quality, price, and delivery time, and then ask him 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 you with 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 to make it available next time.
Four: Export Shipping Corridor
The latter is an example that is once again based on the use of other people’s money to bring buyers and sellers together. In this example, a manufacturer in Thailand offers a container load of a product, for example toys. The consignment is ready to ship, and must be purchased as is, regardless of the qualities of each item style within. The shipment can be varied, and can contain some attractive products but also some less marginal, 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 can 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 purchase 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 may be located. The buyer in Berlin pays you an L/C in the amount of $40,000 and once the funds clear 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 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 number of other intermediaries who will find the export offer from the manufacturer-exporter located in Thailand.