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 read
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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