Jojo Frianeza, World Executives Digest | One of the greatest riches of our majestic planet is its diversity, not just in people but in resources as well. As a result, different regions have developed different goods and boost products other regions have no means of obtaining other than through trade. This is where full benefits of import and export can be seen best. Still, aside from more than obvious benefits for the consumers, there are more than a few ways in which a skilled merchant can find a way to turn this into a profitable business. With this in mind and without further ado, here are three things you need to know about the import/export business if you are to find any success in this field.
Before you even start importing or exporting certain goods, you need to make sure you understand the broader context of things. First, you should always try to find out are you legally able to import these items into your country or export them to the target destination in the first place. Next, you need to ask yourself if you are financially able to do so and for this, you need to be aware of the full cost of importing.
This entails factors such as transport, insurance, storage, customs duties, finance charges and many other hidden expenses you need to work hard to uncover. Things are particularly tricky when it comes to transportation, which is why finding the right Sydney freight service to inquire about such issues might just turn out to be a deal-breaker. At the end of the day, there is only one question you need to answer – is importing/exporting cost-effective?
Competitive pricing is your key to success
Once this is out of your way, you need to keep in mind that keeping competitive pricing might be the only way for you to succeed in this industry. You need to calculate how low you can go with your prices in order to still gain profit. However, there are more than several factors that will influence this major choice.
For instance, reaching the market first (i.e. being the first one to import a certain product) means that you can make the prices significantly higher, than you otherwise could. Quality is another factor that may affect the price. There are also other things such as government policies, customer contacts and product positioning. Overall, making sure your price is adequate is the thing that will most likely come to determine your success.
Finding the right overseas supplier
In the end, there is an issue that is vital to those dealing with importers. We are, of course, talking about the logistics behind finding the right overseas supplier. Here, you are walking on thin ice seeing how you are looking for someone who will always deliver in time, deliver the product that meets all the terms you agreed upon and most importantly someone who won’t disappear overnight with your money. To make things even more complicated, dealing with overseas suppliers has its own difficulties starting with language and cultural barrier.
Finally, you need to keep in mind that the above-listed three issues represent nothing more but the tip of the iceberg of all peculiarities surrounding the import/export business. For example, aside from all of these risks, you will also have to bear the risks of dealing with the exchange rate fluctuations and the volatility of both global and local markets. Still, great risk yields a great reward. This, however, doesn’t mean that those who risk the most profit the most. On the contrary, the greatest profit usually gets reaped by those who excel at risk management.
Dan Radak is a marketing professional with eleven years of experience. He is a coauthor on several websites and regular contributor to BizzMark Blog. Currently, he is working with a number of companies in the field of digital marketing, closely collaborating with a couple of e-commerce companies.