Import Export Business – What to Avoid

It is pretty surprising how many people make the same mistakes over and over again in some business endeavors. Moreover, despite the fact that these mistakes have happened in the past to many other persons, some business neophytes still commit the same mistakes. It is therefore very important to know the most common mistakes that most businessmen commit and how to avoid them. In other words, if there are things that you should know and do in starting up a business, there are also some things that you should avoid.

In the import export business, there are many factors to consider. Aside from the fact that unlike other types of businesses which just deal with the selling of products, the import and export business buys products as well. Thus, the nature of buying and selling should both be studied critically in the import export business. For those who are just starting out in this type of business, as equally important with the things that you should do, are the things that you should avoid. Thus, in order to avoid the common mistakes that other businessmen have committed, it is important to note the things that should be avoided.

First and foremost, if it can be helped, avoid third party vendors. This may sound a bit harsh, but third party vendors usually have hidden fees that will not only make your products appear more expensive, but will hinder these products from being sold. This is so because third party vendors have the tendency to insert hidden fees for them to profit more. However, if it cannot be avoided, you can employ third party vendors that are credible and reliable. There are online sites that offer the third party vendor services. In browsing through these sites though, you should be very cautious and discerning.

Second is talk directly to the producers for imported products. Beware of agents who represent importers because these will just add to the cost of the products. As much as possible, in importing products, make sure that you deal with the producers, or main suppliers of the product. This would not only eliminate unnecessary third party fees, but will also make transactions clearer and faster.

The third thing to avoid is delay in deliveries. In the import export business, time is one of the most important factors to consider. In importing products, the delivery process starts as soon as you buy the product and bring it to your warehouse or store. The time spent for these operations should be considered critically in order to avoid delays and extra expenses on the handling of these products. In the same manner, in exporting products to other countries, the delivery process starts as soon as you send the products to the receiving party. The delivery process is only concluded when the receiving party receives the products. Thus, any delay in the delivery process would mean extra handling expenses.

Issues to Consider on Import-Export Business

No country, not even the superpowers can be totally independent and self-sustaining. Every country needs products, raw materials or supplies from other countries. They either use the products directly or produce other products from these raw materials which they eventually can sell to other countries. Every country is involved in import export transactions by buying what it needs and selling what it manufactures.

With the formation of the World Trade Organization or WTO, import export trading has become more professional, fair, free and smooth. Member countries get the privilege of reduced tariff, lesser trade barriers, import quotas and restrictive policies. These are privileges which they in turn can pass on to businessmen who would like to engage in a profitable import export business. Even with new advancement in technology, businessmen still need to take into consideration several factors and issues that would determine whether the business would succeed or fail.

It is highly important to allocate resources of time, effort and money to formulate a marketing plan and come up with marketing strategies in order to bring in buyers for an import export business. Marketing strategies that are properly planned and executed are crucial for a business to be successful. Some people prescribe to the theory that “if you build it, they will come” but this never really works. The purpose of marketing is just simply making people aware of the products in order for them to patronize or buy it. It is improbable for somebody to buy a product that he has never heard of, no matter how good it may be.

Marketing is not selling. It is advertising, promoting, introducing and promoting and products and enticing people to buy them. It means coming up with a corporate identity, promotional materials or specials to make buyers aware of why the products sold by the import export business is different and warrants a purchase.

Finding the right supplier with the right products is crucial for a successful import export company. The product should be able to fill a need, whether it is for cheaper product or for product alternatives. It would be difficult to compete with a local product that offers the same features, benefits and price.

Having the right logistics would mean that the products arrive on time at your site when you expect it to or at the buyer’s site when he expects it to. This is extremely important for perishables and seasonal products. Timing and the right logistics support should both be present for the products to reach you when you want it to. There are several options for logistic services and it is best to choose one that has a reputation for reliability and comes highly recommended. If fast delivery is required, there are shipping options that have short transit times but are more expensive though.

Even with the international trade regulating bodes, an import export business that has transactions with other countries will always be subject to rules of the government that it is either importing from or exporting to. In order to ensure that there are no restrictions or sanctions, it is best to comply with these government regulations which may differ per country.

Succeeding in the import export business requires a thorough knowledge so it is highly advisable to get import export business training courses or an import export coach that could guide you. It may be initially expensive but in the long run, it would save you from making mistakes that are more costly.

Research Your Options Before You Begin Your International Import Export Business

While most of the action in the international import export business is in deals and agreements between organizations or individuals, the terms of these contracts might be affected by legal stipulations which govern business relationships. Most countries have laws which determine how products might be imported or exported, but some also are ruled by international treaties. These might have an impact on your international import export company, as well.

The European Union

Though far more than simply a trade treaty, the European union affect international import export businesses, especially those which function within EU countries. The EU developed a single economy with a single currency, which simplified economic transactions. It also wiped out regulations on movements of people, items, services, and capital within its member countries. This has simplified trade both between European union countries and between European union and non EU (third world) countries.

The NAFTA

The North American Free Trade Agreement which went into effect in, 1994, is a local arrangement between the USA, Canada, and Mexico. These 3 countries agreed to phase out tariffs on materials products and to reduce limitations on trade in services and on foreign investments. NAFTA has considerably simplified international trade between these 3 countries, with the connection between Canada and the US becoming particularly close. A lot of international import export companies in the united states business primarily with Canada.

The Association of Southeast Asian Nations Free Trade Area

The Association of Southeast Asian Nations (ASEAN) is similar to the EU in that it has a huge number of signatories and it created a geopolitical and economic organization. It was set up to encourage economic development among its member countries. Recently, ASEAN has discussed a free trade area (AFTA) among its member states, that is a prelude to more complete economic integration. Tariffs between member states are lowered, though they retain the right to charge non-ASEAN countries what ever tariff percentage they desire.

Other Trade Agreements

Bilateral and multi-lateral trade agreements between individual nations or between these larger groups of nations are becoming increasingly more common as the global economy becomes much more integrated. Many of these new trade agreements include free trade or reduced tariffs between the signatory nations. The aim is to make international import export freer and also more lucrative for everyone involved.

The World Trade Organization

The World Trade Organization (WTO) is not a global export import organization, but rather a global body which aids to set the ground rules for international trade. The WTO is committed to keeping trade flowing as freely as possible without undermining national governments or endangering people or the environment. The WTO agreements are arranged between member nations and have been signed by the majority of countries in the world.

The WTO also provides a trade dispute resolution process.

This list of trade contracts and treaties merely scratches the surface of the number of such treaties in existence. Make sure you read up on the ones that might effect your international import export business!