Nearly every tourist city has shops that strictly sell imported goods. You’ve probably been in quite a few. Most of these shops sell items imported from overseas from places like Tibet, India, China, and the Philippines. These shops sell everything from trinkets and clothing to handmade goods and tend to do exceptionally well.
If you’re considering starting an import/export business, you’re probably wondering if it’s worth pursuing. Importing and exporting are huge money makers, but whether it’s worth pursuing depends on how much time, money, and energy you’re willing to commit. The best place to start is to get clear on why you want to go into business.
Why do you want to start an import/export business?
The first thing you need to do is explore the reasons you want to start an import/export business. Is it just for the profits? Are you willing to negotiate deals between buyers and sellers regardless of the product? Do you have a special tie to a particular type of product that you want to sell personally? Whatever your reason, get clear on why you want to go into this type of business.
What type of import/export business do you want to get into?
In the import/export business, there are a variety of roles you can play. Each is its own business. For example, Entrepreneur.com published a guide to starting an import/export business and outlined three types of businesses you can start:
- An Export Management Company (EMC). An EMC “handles export operations for a domestic company that wants to sell its product overseas but doesn’t know how.” The EMC handles everything including looking for buyers, hiring dealers, invoicing, advertising and marketing, arranging shipping, and working out financing. Running an EMC comes with significant responsibilities, but the potential for profit is also quite large.
Running an EMC also requires making big decisions that cost money up front but save money over time. For instance, for transporting goods you’ll want to consider getting your own ship rather than paying for space in someone else’s. In a thorough guide to ship financing, Assets America explains the process of acquiring a ship of your own, including the financing and delivery.
The guide also explains the difference between the 6 main types of cargo ships: general cargo vessels, tankers, container ships, dry bulk carriers, multi-purpose vessels, and reefer ships.
EMCs are generally paid by commission or a base salary with commission. This type of business will require the most time and effort.
- An Export Trading Company (ETC). This business identifies what foreign buyers want and finds domestic sources willing to export. This job is mainly salaries, but can sometimes be commissions-based.
- An Import/Export Merchant. This business is more in line with entrepreneurship. An import/export merchant has no specific client base or a specific specialty. They buy, pack, ship, and resell goods directly.
Be ready for major compliance regulations
Importing and exporting is subject to hardcore compliance regulations in both the country of origin and destination. Be ready to jump through some hoops and get caught off guard. Selena Cuffe, co-founder of a wine and tea import/export company, told Fundera, “The compliances make it so complex that even if you did know how to do it, you’re still going to have to keep in mind a lot of random considerations.”
Import/export duties will be heavily focused on sales
Just a fair warning, running any kind of import/export business will be a sales job by nature. You’ll do plenty of negotiating and haggling, and will probably need to pursue people when they don’t get back with you right away. You’ll need to polish up your sales pitch skills and not be afraid of some back-and-forth. If you don’t like sales, importing and exporting won’t be a fit for you.
It’s okay to have small goals
If you’re not a hardcore entrepreneur dreaming of a six-figure income, there’s nothing wrong with that. If all you want is to run a business selling imported goods to support a simple lifestyle, that’s a perfect reason to pursue this type of business.
Should you start an import/export business?
Is it worth starting an import/export business? The money is certainly there. However, like any other business, it’s only worth pursuing when you’re willing to put in the time and effort to build it from the ground up. Just because an industry is doing well doesn’t mean every new business is guaranteed to be successful. Each business must stand on its own, build its own foundation, and earn its own reputation.