| THE FACTS ABOUT
IMPORT/EXPORT It Really Can Work! The import-export business is often mentioned as a business venture. Quite often it is the subject of courses and vast manuals running into hundreds of pounds in cost. Similarly, the profits that are offered run into many hundreds, even thousands of pounds. You may well start to think 'can it be really true?'. Well, the fact is YES IT CAN. And, even better news, you do not need an expensive course of tuition to be able to trade in import-export. You just need to know a few basics and you can soon be buying and selling overseas for vast profits. And, that's all it really is - buying and selling! Read on for all you need to know. Even without capital! Setting Up One of the most important things in import and export is to set up properly. Your business must look professional if you are to have access to big profits without capital. Many quite profitable import-export firms actually know very little about the business - but just make it look as if they do! It is vitally important to have some quality business letterheads showing name, address and 'phone number. These must be of the best quality. You will also need a bank account but your own personal bank account will suffice to start. All your correspondence and dealings must be carried out to the highest standards. Making a good impression will gain you entry to the biggest and most lucrative deals. Once you are set up you should decide to start with either import or export, only trade in both at a later date. It is possible a little easier to start with importing - but you really have a free choice. About Importing As you would expect, importing is simply buying goods overseas and bringing them into the UK. There are several ways you can do this. But, the best way is to look for a requirement in the UK and then look for goods overseas to fill that demand. This way you will not be buying goods until you have found a buyer. There is little chance of having to buy imports you cannot sell. The best way to locate sources of imports is to read various trade journals. Look in the trade journals at your main library. You will find classified advertisements from firms overseas who want to sell their goods in the UK. Once you become established as an importer firms overseas will find out about you and send details of lucrative products you might be interested in automatically. The best countries to import from are less developed ones. Here costs of making goods are much less than in the UK. Something that will sell here for many pounds will often sell in low-cost countries for pence. And, the cost of transport is not excessive! Ideal countries to import from include those in the Far East which are well known for producing very cheap goods. Some cheaper European countries are also good sources. However, in most EEC countries and places like the USA/Canada products are not much cheaper in the UK. In some places they may be more expensive, so these must be avoided if you want to make really big profits. You can virtually import anything you like. But, it is wise to avoid things which are bulky or difficult to transport and things which could be considered dangerous. Try and stick to 'safe and boring' things for the best chance of success. Very few things will not be allowed to be imported. Once you have suitable ideas for imports you should get details from the supplier and an idea of the costs. Get details of the transport costs too. These can be obtained from a freight forwarder, who is a kind of travel agent for goods! It is then best if you can sell the imports before you actually buy anything. Make up a small catalogue of your product (start with one only) and send to potential buyers. These might include wholesalers, manufacturers, large shops - or you could sell the product yourself by mail order. Locating a particularly innovative or even cheap import can lead to a very successful business in a very short time. The Import Procedure When you find a customer (keep trying!) ask them to pay for the goods in advance. Contact your supplier and place an order. You should ask them for credit terms of 60-90 days. As most are keen to export to the UK this is not unrealistic. When you have a delivery date from the supplier pass it on to the buyer. You will be already earning interest on their advance payment! Import is so easy because it will be up to your foreign supplier to arrange for transport and include it in the price (but always check it with a freight forwarder!). When the goods arrive you simply notify the buyer that they are ready for collection. This might be from a particular port - or you can arrange delivery using a haulier if this is included in your price. Very simple! A special procedure exists for paying for imports. When you have placed an order with an exporter ask your bank to issue a letter of credit in the buyers favour. This promises them payment after the agreed period if the order is supplied correctly. It also ensures that you only have to pay for the order if it is correctly supplies - you don't pay if it is wrong. When your order is received correctly simply inform your bank and they will make payment to the supplier automatically within the terms agreed. This method of payment is widely known as safe i.e. you can't pay for the goods unless they are received exactly. Once you have imported goods successfully you should continue the process to build up a regular trade. Try and get repeat orders from the same customer. This way you are adding a lucrative mark up for little more than transmitting an order between two companies! About Exporting Exporting is very much the same as importing - only in reverse! But there are a few differences and generally exporting involves you in more organisation than importing. Make sure your profits are higher to cover this. The very best way of exporting is to look for goods required overseas and try and supply that demand from UK made goods. Look in the various trade journals where you will find various overseas companies advertising for suppliers of UK goods. Because exports are vital to the UK, you can get a lot of Government help in exporting. Most of this is given through the British Overseas Trade Board whose main address is 1 Victoria Street, London, SW1H 0ET. For a small fee you can subscribe to their Export Intelligence Service. Simply tell the service what sort of goods you wish to export and they will provide you with details of potential buyers. When you have details of potential buyers you should find a product source in the UK. In most cases it is best to go straight to the manufacturer and even small ones are usually interested in expanding their markets. Then, send details of products available to the buyers. If you send out enough literature overseas you will receive requests for quotations. Compile a quotation carefully. To the manufacturers price you must add your profit and the cost of transport obtained from a freight forwarder. Once you have sent out your quotations do be prepared to wait several months for the possibility of an export order. You should decide to export anything that is wanted overseas! Hardly anything requires permission to be exported. Import licences at the other end are the responsibility of the buyer. The best countries to export to are those where costs are higher or similar to the UK e.g. EEC countries or the USA. Do not try to export to low-wage countries, such as the Far East. You will find it very difficult to be competitive and profits will be very small. The Export Procedure When you receive an export order you should ask the buyer for prompt payment by letter of credit. The buyers bank overseas will arrange this. It will ensure you are paid as long as you deliver the goods with no chance you will lose the goods and not be paid! Place an order with your UK supplier and inform the buyer of this. You should then instruct a freight forwarder to arrange transport from your supplier to a port convenient for the buyer. You can do this yourself but the cost of having a forwarder do this makes your job much easier. When the goods are ready simply hand them over to your forwarder to arrange carriage to the buyer. All packing, insurance, shipping and customers matters are handled by them. Just as when importing, all customers matters, taxes etc. are the responsibility of the buyer - not you as agent. When the buyers bank receives confirmation that you have delivered the goods intact they will release what you are owed. The buyer cannot stop payment unless you are at fault so this is very safe. If you have made arrangements for credit with your supplier you can earn interest on this money and you would not have needed any capital to start. Follow up each export transaction with a view to getting more orders. Also consider any imports your overseas buyer might offer you. A two way trade with contacts overseas is a good way of building up a long and lucrative trade. Summary The import-export business is considered by many people as very profitable - and this is true. Unfortunately, many are put off because it looks so complicated. In reality import-export is little more complicated than mail order, but over international boundaries. The knowledge of 'how to do it' can be gained in one transaction and is extremely valuable. One of the great advantages of mail order is that it is rarely essential to have any significant capital to start. The payments system makes this possible. And, it is not only large corporations who deal in the business - you can make your business look large and professional from the start! There are already many small one-man import-export business. And, as international trade grows, bound to be room for more. You really do not need to undertake extensive courses or buy expensive manuals to start up in import-export. The BOTB is an excellent, easy way of starting in export. In addition, your local Small Firms Service is a useful source of help. Telephone Freefone 2444. Other than that there are no magical way of finding an import or export opportunity. It is just a matter of 'taking the first step'! |
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