Importing is a great way for you to grow your product line. It
will also give your company the potential to earn bigger profits by
reducing costs. The idea of setting up an import business seems like an
expensive and complicated feat. At times, that is the case.
Nevertheless, there are some simple tips to follow to help you take the
first steps towards becoming an importer.
Step #1. Research the product you want to import:
Most companies already have a product that they want to buy or produce and sell in the market. However, if you are still in the planning phase, include researching the products that you will be importing in your list of priorities. Remember to check out your competition. Importing products that other players are in already selling will affect your pricing limits. If you want to be competitive, you want to make sure that aside from selling quality products, you should be able to realize an ideal amount of profit after all the additional costs of importing and other possible expenses.
Step #2. Can your products be imported?
When you have an idea of what products will sell to your target market, then it is time to find out whether or not the goods can be imported. Most items can be imported. However, there are certain types of food, equipment, and plants that cannot be shipped from one country to another. Determine which countries offer the products you need. Then, communicate with the export bureaus of that country to determine whether you can import the items that you wish to bring to and sell in your country.
Once you have a list of those items, check whether the products require licenses from the Department of Trade and Industry Import Licensing Branch before being legally imported so that you can make the necessary arrangements.
Step #3. Apply for a registration number and other requirements.
Starting an import business brings forth many legal requirements. There are federal, state, or local permits and licenses that you need before your operations can commence. Since the regulations differ depending on the industry, location of your business, and various other factors, accomplishing the mandatory licenses and permits should be your priority.
You can arrange all of these legal prerequisites on your own or you can make life simpler by hiring a full service, certified customs broker. A qualified customs broker can prepare all the documents needed for importing goods. Make sure that you will be hiring a customs broker licensed by the U.S. Customs and Border Protection Service.
Step #4. Establish good business relationships with buyers.
Because you will be engaged in the importing business, many of your buyers or customers will be intermediaries or distributors. It is important to establish good trading relations with these people to ensure that they will continue to do business with you in the future. Do not take shortcuts when setting up relationships with potential dealers. There are a lot of importers out there, and a dealer wants to deal with an importer who gives them personal attention and service. Dealers are the lifeblood of most import operations; when you run into a product defect or delayed shipping, a dealer will be far more likely to stick with you if they have been treated as a top priority from day 1.
Step #5. Find a financial institution that provides a good international banking support.
It was mentioned earlier that starting an import company can be expensive. Its ongoing management can be more so. For this reason, finding a banking institution that can provide you with your financial needs both for your local and international operations is essential. A bank that will offer you a line of credit is useful. You will also need a bank that can create a letter of credit. A letter of credit is a way to secure a factories performance before they receive the funds from the bank. This works in essentially the same way an escrow account works in real estate. The bank holds the money until the factory performs, and which point the factory will receive payment from the bank.
Step #6. Find a customs broker that will handle all of the paperwork and logistics of the import.
You want to be in the business of developing, marketing, and selling a great product. What you want to avoid is spending days figuring out customs paperwork, coordinating the logistics of ocean freight, local drayage, and other import related headaches. Choose a customs brokerage service that agrees to handle all of the above.
These are basic steps to help you start your importing business. The stakes are high and although there are serious risks involved, it is no longer possible for any product based business to ignore international trade. If you do, a competitor will do it it, and your business will likely suffer.
Step #1. Research the product you want to import:
Most companies already have a product that they want to buy or produce and sell in the market. However, if you are still in the planning phase, include researching the products that you will be importing in your list of priorities. Remember to check out your competition. Importing products that other players are in already selling will affect your pricing limits. If you want to be competitive, you want to make sure that aside from selling quality products, you should be able to realize an ideal amount of profit after all the additional costs of importing and other possible expenses.
Step #2. Can your products be imported?
When you have an idea of what products will sell to your target market, then it is time to find out whether or not the goods can be imported. Most items can be imported. However, there are certain types of food, equipment, and plants that cannot be shipped from one country to another. Determine which countries offer the products you need. Then, communicate with the export bureaus of that country to determine whether you can import the items that you wish to bring to and sell in your country.
Once you have a list of those items, check whether the products require licenses from the Department of Trade and Industry Import Licensing Branch before being legally imported so that you can make the necessary arrangements.
Step #3. Apply for a registration number and other requirements.
Starting an import business brings forth many legal requirements. There are federal, state, or local permits and licenses that you need before your operations can commence. Since the regulations differ depending on the industry, location of your business, and various other factors, accomplishing the mandatory licenses and permits should be your priority.
You can arrange all of these legal prerequisites on your own or you can make life simpler by hiring a full service, certified customs broker. A qualified customs broker can prepare all the documents needed for importing goods. Make sure that you will be hiring a customs broker licensed by the U.S. Customs and Border Protection Service.
Step #4. Establish good business relationships with buyers.
Because you will be engaged in the importing business, many of your buyers or customers will be intermediaries or distributors. It is important to establish good trading relations with these people to ensure that they will continue to do business with you in the future. Do not take shortcuts when setting up relationships with potential dealers. There are a lot of importers out there, and a dealer wants to deal with an importer who gives them personal attention and service. Dealers are the lifeblood of most import operations; when you run into a product defect or delayed shipping, a dealer will be far more likely to stick with you if they have been treated as a top priority from day 1.
Step #5. Find a financial institution that provides a good international banking support.
It was mentioned earlier that starting an import company can be expensive. Its ongoing management can be more so. For this reason, finding a banking institution that can provide you with your financial needs both for your local and international operations is essential. A bank that will offer you a line of credit is useful. You will also need a bank that can create a letter of credit. A letter of credit is a way to secure a factories performance before they receive the funds from the bank. This works in essentially the same way an escrow account works in real estate. The bank holds the money until the factory performs, and which point the factory will receive payment from the bank.
Step #6. Find a customs broker that will handle all of the paperwork and logistics of the import.
You want to be in the business of developing, marketing, and selling a great product. What you want to avoid is spending days figuring out customs paperwork, coordinating the logistics of ocean freight, local drayage, and other import related headaches. Choose a customs brokerage service that agrees to handle all of the above.
These are basic steps to help you start your importing business. The stakes are high and although there are serious risks involved, it is no longer possible for any product based business to ignore international trade. If you do, a competitor will do it it, and your business will likely suffer.
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