When you ask children what they want to be when they grow up, they usually say things like a fireman, singer or teacher. They wouldn’t usually think to say something like own an import/export business. However, this can be a very challenging and rewarding path. Here are a few tips to make sure your import/export business is a thriving one.
Know your market
You have to know what your market wants. It doesn’t help to have general ideas about what you think people want though, you have to be very familiar with a specific, local market. Your aim is to supply a need, so you will need some vision in understanding the market and knowing how you can supply a need that no one else is doing. Or how to do it in a more cost-effective way.
Build a network
You can’t conduct an international transaction on your own. There are always several parties who play a role in your import or export operations. You can usually however find all you need in your region. Never stop building your network. The more reliable business partners you have, the fewer hassles you will have.
For instance, do you need to open a bank account in foreign currency or are you going to receive payments under letters of credit? Go and introduce yourself and your company to a local international banker.
Do your products need to be certified? Build a relationship with the industry association, export authority or certification company representative involved.
Need to transport your products? That would be a pretty major expense. If you are operating out of South Africa, for example, find a provider you can trust for truck finance in South Africa.
Find your niche
Find yourself a niche. What can you import or export for profit? This will take some research. Basically, the types of products you can import fall into three categories:
- Availability: Some kinds of products could be in plentiful abundance in one region, but scarce in another. This is a potential opportunity, but first make sure there is actually a market for that product. Just because something isn’t available in a region doesn’t mean people want it.
- Prestige: Some goods carry more weight when they are imported from a certain region, like cotton from Egypt or beer from Germany.
- Price: Whether due to technology or resources, sometimes it is just cheaper to import something than produce it locally. China quickly comes to mind and is an interesting case study to give you an idea of the mechanics of how to make your import/export trade work.
The thing with the import/export business is that it relies on continuously changing factors. A butterfly flapping its wings in the region you’re importing from affects the prices you can charge. Stay nimble and be ready to react to industry changes by always knowing what’s going on. Some things might seem like minute details, but can have great consequence. If you’re more interested in the big ideas than in the details of their realisation, you might be in the wrong industry.