An import-export business includes buying and selling foreign and domestic products. Indian companies spend high on importing vital goods, which goes for other countries. It is a continuous process, and the export market is far wider than it appears! As an importer-exporter, you can generate high income, but it isn't as easy as it seems to be. Besides grabbing the right product and targeting the right market, there are numerous other challenges.Does starting an import-export business always demand a lot of investment? What are the potential obstacles in starting the journey from home? How can you connect to consumers? Please keep on reading to learn more.
Did you know?
Oil and Mineral Fuels are the most imported products in India.
Tips on How to Start an Import Export Business From Home
Starting an import-export business from home demands proper guidelines and an in-depth understanding of the foreign consumer market. As a trader, you should gather all vital data and understand foreign trading rules and regulations. You can design a better and more trustable business plan with proper research.
Let's understand the whole process step-wise:
1. Choose the Perfect Product for Your Exporting Business
One of the prominent reasons behind many small-scale export businesses shutting down in the early stages is the mistake of choosing the wrong product. A product may look very attractive to you in the basic research, but the picture may be entirely different if you dive in-depth. When choosing a product for your export business, try to find answers to the following questions:
- On what scale is the manufacturing of that product done in your country?
- What are the exporting regulations for that product in your country?
- What are the import regulations in your targeted country?
- Are there any sorts of quality checks which you feel will be huge challenges for you?
- What if that product fails in your currently targeted country? Do you have other markets as plan B or C where you can export?
- How high is the demand for that product in your targeted country, and how high is the competition there?
- Would you be able to sell it at a very competitive price and still generate profit?
- Are you sure that the demand for your chosen product will be consistent for the years to come?
- Is there a large variety of related products available?
Such questions can't be answered by guesswork or researching the market for one or two days. You need to analyse the demographics of your target market. While dealing with highly regulated products, the margin of error is very thin.
If you're uncertain about the proper regulations, you can take help from any experienced customs brokers as they have enough experience and knowledge. Their help may be invaluable.
2. Find a Reputable Supplier
After deciding on the product, it's time to contact a reputable and trusted supplier. Being the supplier yourself is undoubtedly the best instance.
While importing, product sourcing is vital, and you can look upon local suppliers in foreign markets for the same. Working with suppliers in foreign nations can be challenging in a few ways like:
- Cultural customs
- Language barriers
- Time zone differences
You can establish an online marketplace that serves the B2B platform. You can get in touch with many possible suppliers worldwide through these platforms. Seeking private suppliers by yourself can also bring risks, so be careful.
Some popular marketplaces include:
Using such huge marketplaces have their drawbacks. Scammers can easily disguise themselves to scam you in the infrastructure of such leading sites. Therefore, check the verification of the supplier you've chosen.
3. Register Your Business and Obtain License
Once you've decided on products and suppliers, don't think you've completed the job. You need an import and export license (both are different). Register your business and make it a unique legal entity so that you can enjoy legal benefits, which may include tax reduction (even cancellations), liability protection, etc.
While establishing an import-export business, you should consider a few additional items. You need to file a foreign qualification if you plan to operate in numerous countries or even states/provinces (as in the case of the US).
Depending on your chosen product, you may need an import license. Most products don't need one, but you should ensure this before heading too far into the procedures.
The same goes for export licenses. You need to check with CBP's exporting requirements besides checking the Export Administration Regulations of the country you're getting to export.
4. Obtain a Customs Bond
In the process of learning how to start an export-import business, we have reached the fourth step.
If you're planning to run an import-export business from home, then you can't move further without becoming a registered importer. This registration will dictate who will be the responsible party to ensure import compliance. You can also get a customs bond on any shipment.
A Customs Bond is always a great idea as it ensures that customs taxes and duties are paid and smoothes commerce in general. You should certainly have a customs bond in hand if you don't want your goods to get stranded at the port because of failing to pass through the customs.
If you don't have one, you may even have to pay some fines, which are very expensive sometimes. You may even be asked to pay for extra inspection and storage of goods.
5. Develop a Distribution Plan
Till now, you have taken care of the legalities, and you're all set with your product to export. How will you take your product to potential clients? For that, your advertising and distribution plan needs to be robust.
Warehousing is a big component of distribution, and a warehouse is where you will store your goods until they reach customers. If you've just begun your small-scale import-export business from home, then you don't need to spend money on warehouses.
You can conveniently make some space in your home for storing your goods. If the quantity or size of your products is huge, you can contact a third-party logistics (3PL) company. You can partner with a 3PL to simplify your distribution plan. 3PLs offer the necessary infrastructure to maintain your inventory management very well and take care of customer fulfilment.
If you aren't confident enough in determining which 3PL will be perfect for you, you can come in touch with an import-export consultant. Their expert advice can save you a lot of money. Besides that, you'll also get to know a lot about customs clearance.
6. Market Your Import/Export Business
You've decided on your products, checked all legal requirements, taken care of storage and distribution. It's your time to begin making strategies to find customers by marketing your products.
Promoting your new import-export business isn't that different from promoting any small business. However, you may not be able to exactly attain what you wanted early on because you're still new at it and gaining experience.
If you are importing and exporting, getting your feet wet in your new business won't take much time. Boosting sales is all about marking your target audience, understanding their concerns, and fulfilling their requirements better than your competitors do.
Research other suppliers offering similar products and find out their marketing strategies. There are chances that what's working for them may work out for you as well.
Marketing strategies should include:
- Online presence: Today, running an import-export business without an online presence (website or a perfectly optimised social media page) is like boxing with one hand behind your back. Your website/social media page should contain all vital information about your product any potential customer may need. Share your contact information, describe your business, and don't hesitate to flaunt any additional products/services you offer. Again, researching your competitors will help you understand your website/social media page needs.
- A marketing or SEO company: Your website must qualify a few barriers and satisfy a few needs and guidelines of the search engine to rank high in Google search results. Optimising your website is very tricky because of heavy competition, and that's why we'd recommend hiring an SEO expert or agency.
- Trade Shows: This is a traditional style of grabbing new clients. Product promotion, marketing research, competition checks, and many things happen simultaneously in trade shows.
We now hope you've got a fair idea of how to start an export business from home. Besides the six steps mentioned above, some other small considerations will ensure your import-export business runs smoothly. Now it's time to decide when you're going to start the process.