So, how can one get involved in an import export business?
First: You can start an import export business using your own money
Most people think of joining a product overseas with their own money at their own expense. This is the most logical and preferred way for most. Buy a product, pay for it, claim ownership of the goods, import your purchases into the country where you want to sell them, sell them and do it all over again.
Second: import agent for export – bringing together buyers and sellers
If you are familiar with a particular country, especially if you have been there many times and may already know what is produced there and where to find suppliers of these products, you can offer your knowledge to others. For example, if you have been to Thailand many times, you may have lived there before and know the Thai product, you can contact a retailer in the United States, the city where you live or elsewhere, and offer to be a buyer, especially if you brings products from Thailand.
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In this case, a US based retailer may hire you to place an order for a product that sells from Thailand. You will order the product in Thailand, put the shipment together, pay for the product not with your money, but with its money and send the goods to its store in the United States, with the name of its store receiving the delivery documents. For your services, the US importing merchant will pay you an agreed upon commission. The commission is negotiable, not a flat rate.
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The amount may depend on the time you will ship your shipment together, the costs associated with the export side of the process, the costs you will incur in the country of origin, as you have to travel back and forth to the manufacturer’s factory or deal with export transport company.
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The retailer will be the importer, he will pay not only for the goods, but also for the cost of preparing the export, packing and actual international cargo from the country of origin, Thailand, to the destination, wherever his shop or warehouse is located.
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Your commission may represent a percentage of the total invoice value or a negotiated amount between the two of you. In this scenario, you are using other people’s money, but not your experience. You can start tomorrow. Obviously, if you’ve never been to Thailand, you may not want to offer your services as an export agent for Thai products.
There are two main options for this involvement. One of the above when your commission is paid by the importer on whose behalf you worked. Similarly, while you are in Thailand, a Thai manufacturer can offer you an excerpt of its product to present to future buyers in the United States. In this case, you can return from your last trip to Thailand as a manufacturer’s representative – perhaps not with an exclusive contract to represent his products in the United States, but with the understanding that you need to find a buyer for his product that he may want place an order, he, the Thailand based manufacturer will pay you an agreed upon commission on the shipment.
From these two examples, you can work with other people’s money, not just your own, putting buyers and sellers together, where commission can be paid by one or both parties, the buyer as well as the seller and the method is the easiest way to get started in an import export business.
Third: import agent for export
You can work as an independent export export contractor involved in the import export business, which is very much in the same category described above but with more responsibilities throughout the import export process. For example, a clothing store in the United States will hire you to find a manufacturer in Bali, Indonesia who can produce clothing based on their product design specifications. Armed with product drawings given to you by the retailer, you supply more than one potential manufacturer in Bali to prepare product samples that will ultimately be ordered by the retailer in bulk. Each manufacturer will prepare a sample, as well as a quote sheet showing quantitative discounts and delivery times. The merchant will choose one of the suppliers you have sourced based on product quality, price, and delivery time, and then ask you to place the order with that supplier. You will then need to monitor production, quality control, document preparation and pay for the merchandise with the merchant’s money, not you with yours, who will become the actual importer and recipient of the shipping documents. As above, you will receive a payment from the retailer for a commission, plus costs, and possibly be held in storage for your availability next time.
Fourth: Export consignment broker
The latter is an example based once again on the use of other people’s money to collect buyers and sellers. In this example, a manufacturer in Thailand offers a container load of a product, such as toys. The shipment is ready to ship and must be purchased as it is, regardless of the qualities of each style item inside. The shipment may be assorted and may contain some attractive products but also some less marginal, perhaps even seconds, or discontinued products. The exporting producer is looking for a buyer. You are an agent who knows who may be interested, who are the buyers for this type of product. This can be a store in Miami, Florida, or Berlin, Germany, or any other country that you know buyers for for this type of product. You provide samples from the seller-exporter to the buyer-importer. If the buyer agrees to buy the container at the agreed price, you can handle the entire transaction for the sale of what could be a letter of credit back, using your Denver bank, or wherever you are. A Berlin buyer pays you a $ 40,000 letter of credit, and after the funds clear your bank, your bank cuts a $ 30k letter of credit to the seller’s bank in Thailand and you pocket the difference, reduced by bank costs. The container goes from Thailand to Berlin, Germany, not the USA – you never claim ownership of the goods. You only associate the seller with the buyer and the intermediary of the transaction. Needless to say, the export shipment can be mediated by countless other brokers who will come across an export offer from an exporting manufacturer located in Thailand.