On any given day, millions of dollars worth of goods are traded on the global market.
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Some of those goods are exports, or products sent outside the U.S. by domestic manufacturers. Others are imports, or products manufactured abroad and brought into the U.S. to be purchased by American consumers.
Sometimes the manufacturers and distributors of imported and exported goods have established a system to deal directly with one another. However, many manufacturers and distributors don't have the resources, desire, or know-how to do it on their own. Instead, they rely on the services of a middleman – an importer/exporter – to make contacts, arrange deals, and deliver the products.
Starting an import/export business may seem daunting if for no other reason than it necessitates operating in an unfamiliar business environment. But for a business with relatively few startup costs, the rewards of importing/exporting are definitely worth it. Importers/exporters typically earn big bucks – 10% of every transaction. With a little organization and perseverance, there is nothing stopping you from turning a small start-up into a thriving import/export company.
To be fair, importing/exporting involves an endless litany of details. That being said, here is a simplified overview of what it takes to launch a successful import/export business.
STEP 1: Establish Contacts
Once you decide to enter the import/export field, your first task will be to make contacts with foreign manufacturers and distributors interested in trading with American-based firms. Start by making a list of the people you know who live outside the U.S. – friends, family members, business acquaintances, etc. You might be surprised how many contacts you already have.
But even if you don't know anybody outside the U.S., you can still make contacts through foreign-based embassies in the U.S., U.S. embassies in foreign countries, and government sponsored programs designed to stimulate global trade.
STEP 2: Identify and Research the Market
Your next step will be to identify a target industry and market. Part of your decision will be based on the contacts you have made, but you will also have to do some research to stay abreast of trends and other factors that will determine the viability of a given market.
You should also investigate trade barriers, tariffs, and other restrictions that may affect your activity. The U.S. Government Export Portal at www.export.gov will point you toward the information you need.
STEP 3: Make the Deal
After you have identified and researched your target industry and market, you can begin the process of approaching your domestic and international contacts about their needs. Your job will be to play the role of matchmaker, matching manufacturers and distributors in the U.S. with foreign partners and vice versa.
Once you've made the match, you'll need to negotiate a deal that is satisfactory to both parties. The terms of the deal will need to be agreed upon in writing, taking into account issues such as price, quantity, delivery timeframe, shipping and letters of credit (secured payments).
STEP 4: Deliver the Goods
Many businesses employ the services of an importer/export simply because they don't want to deal with transporting their products internationally. That means you'll need to learn how to cut through the red tape and oversee the products delivery in a timely manner. This will get easier as you grow increasingly familiar with the process and establish relationships with shipping companies.