In the following video, the “Brexit Deal Explained”, Alan Bracken covers the basics or what importers and exporters need to know. Information is slow from the government and we still don’t know all the details but hopefully this will help understand the basics.
Rules of Origin
Selecting Your Agent
The New UK Tariff Book (https://www.gov.uk/trade-tariff)
If you want to learn more about the BREXIT deal and how it effects imports and exports from the UK, our “Export Documentation and Procedure” course has been updated to include the details that we know so far.
UK import and export businesses need to know how to prepare for Brexit, urgently. At this stage (at the time of writing), we had hoped to know everything in detail on how a UK – EU deal would work but still, no one quite knows where we will be on the 31st December. Call it what you will but the one thing we do know is, that without a deal, trade with the EU will bring about very major adverse changes. UK traders will of course, want and need to continue trading with their established EU partners and EU traders will want to strengthen trading ties with their UK counterparts.
Until now, inter EU trading has been a very easy process, with minimal customs involvement, open borders, unimpeded deliveries, largely paperless and declaration of VAT post delivery just to mention some of the advantages we had as a member of the EU. This could be about to completely change.
Life After Brexit and International Trade
With a hard Brexit, this frictionless trading will come to an end and as we’ve been seeing on the news, the UK will be thrown into the world of International Trade, with all its impositions, rules and regulations trading under WTO rules and tariffs.
Our EU trading partners will have the same status as any of our other international trading partners outside the EU such as Russia and will have to follow the same customs procedures such as declaration on the new CDS system, which is replacing the old CHIEF system.
This means that consignments will need to be given specific statuses of route 1, 2, 3, or 6, all of which are time consuming. This could cause severe delays at the UK border for EU member consignments, with some predicting up to six hours at least.
What Could Be The Impacts Of Brexit At Customs?
Again, right now, no one knows for certain what the full impact of Brexit will be but without a deal, something that is looking increasingly likely and only 13 days away (at the time of writing), we’re highlighting some the unknowns that should be considered for your import export business.
The impact of Brexit on international customs and trade compliance is not yet clear but the following factors are something that must be considered at this stage.
What will happen without an agreement?
48% of UK shipments go to EU countries
54% of UK arrivals come from EU countries
…without customs clearance and duties to be paid. This would change over night.
Those movements will become third-country imports or exports, including the need for customs declarations and duties due to a missing agreement. Export control regulations will be affected as well.
Just two minutes more for customs inspections per truck, could result in approximately 27 extra kilometers of traffic jams with an obviously massive impact on the supply chain.
Additional custom specialists will be required
The administrative burden could increase from five minutes before Brexit to more than one hour of workload per export! 185,000 UK traders could be making their customs declarations for the first time. This is not going to be a smooth or streamlined process so you must know how to make a customs deceleration if you are going to prepare your business for Brexit.
Customs declarations in the UK are expected to increase from 55,000,000 to 255,000,000 per year. It could be very, very costly, with an estimated €50 or more per declaration.
The OECD estimates that inefficiencies relating simply to the process of customs clearance could result in additional costs of up to 10% of the value of the goods.
Beyond this, increased duty rates on imports to the UK, from non-EU countries due to the UK losing access to EU free trade agreements will apply. New free trade agreements need to be negotiated with all relevant countries which could take 5 to 7 years per free trade agreement as they have done with several countries already.
Lastly, more questions still need to be answered that we just don’t know the answers to right now:
Will the new customs authority system CTS be ready?
Will support systems be ready?
Will there be enough capacity and customs brokers?
Will the companies export control management be ready?
There are many questions to be answered but it is important to understand what is at stake and how your business will be affected. Take the time now to understand how Brexit could directly effect you and research what changes you need to make, so you are not caught out and your business does not suffer come 1st January 2020.
What You Should Be Asking Yourself
As a business owner, you should really at this know how to prepare your business for Brexit and grasp this as a great opportunity to become part of a global explosion in trade. UK businesses must identify how international trade post Brexit will affect their trading position within the EU and beyond and be prepared to meet the new challenges.
The following are a set of questions that is advisable to ask yourself and research, RIGHT NOW…do not delay any longer! Be proactive, not reactive and prepare for a worst case scenario and how a hard Brexit will effect you. Waiting for 31st December 2020 in hope, may well be too late.
1. Understand how to export. How will the new import export regulations impact upon my business?
Importing and exporting within the EU could be vastly different with either a Hard or Soft Brexit. With less than three months left, now is the time to prepare. We address two simple action points to get you started.
The Guardian has reporting that two thirds of British businesses had made no preparations at all for Brexit. I’m not aware if that figure is still the same today but if it is, it’s very unwise to be leaving your preparations this late.
Should the UK not reach a deal by the 31st December 2020, the EU as far as trade goes, will become like any other “foreign country”, take for example Venezuela. British companies will need the same documentation to trade with the EU as you would Venezuela.
Currently, trading with the EU is very easy, there’s no major documentation required, no customs, any import export documentation that is required is filed remotely after the import or export is completed. That same export to France will be much harder.
Be proactive, not reactive, have everything in place as soon as possible. If you trade solely with the EU, you are running at this point, a very high risk of being completely caught out and your business potentially coming to a halt if you don’t know how to trade outside of the EU.
Prepare for Brexit – A Checklist
Do you have an EORI number? If not, go and get one. If you’re trading outside the European Union already, you’ll have an EORI number, so you don’t need to worry about this. If not, depending on whether you’re registered for VAT or not and whether you’re importing or exporting, here’s how to get your EORI number.
Customs Clearance will be using the new CDS system. You will need an EORI number to access this system.
Delivery Times: Without a deal, delivery times of goods coming in and out of the EU will be delayed with some estimating very severe delays. Analyse how your business will cope if this becomes a reality and goods you’re importing are held up for days before you receive them and equally, how this will effect your shipments outbound to your customers. If you’re offering guaranteed delivery times, you may well want to rethink this.
Brexit Risk Assessment: Perform a risk assessment on your entire company, from the warehouse to the managing director . Where is your company vulnerable, what will need to change, where are your biggest risks and how can you minimise them?
How Could A No-Deal Effect VAT Procedure?
Below is our quick guide on how a no-deal Brexit could effect VAT procedure. Make sure you understand how this will effect your imports and exports from the United Kingdom as you will have to understand these changes if you want a streamlined import export procedure:
Postponed accounting for EU imports
Importers will account for import VAT on their existing VAT returns
Retain your evidence that goods have been exported to EU member states
Remember that the customs declaration system will be paperless
Exported goods to EU will be zero rated on commercial invoice
EC sales list will no longer be used to declare exports to EU
Make sure your company’s export software is adjusted to reflect changes
Register for AEO for imports and exports
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With Boris Johnson now Prime Minister, it really is time to prepare URGENTLY and I don’t advise that you rely on hope at this point, that the government will be able to make a deal with the EU.
The story of Lord Alan Sugar is a great one, from selling radio aerials for cars and other electrical goods out of a van, to a market stall, to multimillionaire. Starting an import export business really isn’t rocket science and can be hugely rewarding and make you financially successful but of course, is going to take time, dedication and some all fashioned hard work.
Knowing how to start an import export business is challenging and will take some study and research but the rewards are great. Here’s a few tips and ideas on what to think about as you start your import export business venture:
Product Testing: Is Your Product Hot Or Not?
Find The Best Products For The Lowest Price
Get Samples From Suppliers
Safety In Numbers: A Range of Products Earn Bigger Profits
Learn How To Negotiation: The Art of The Deal
Learn How To Find Buyers!
Understand Incoterms 2020: Code Words for Logistics
Find A Freight Forwarder
Understand Marine Insurance: For When Disaster Strikes!
Remember Your Terms and Conditions
Setup Your Company The Right Way For You
Write Your Business Plan
Keep the Tax Man Happy!
Build Your Own Website
Your Own Import And Export Business
Some reports state that around 70% of us are unhappy in our job. This being true, it’s always possible to change career, take the plunge and start up your own international trading business.
It’s scary but for those that do and are willing to take the time to learn a new business, do their research, create a business and marketing plan and have the guts to take action, it’s well worth it. Nothing’s easy in this world but once a few sales start to come in, it’s a very rewarding feeling seeing something come to life that you’ve built.
Starting an import export business or any business for that matter, is exciting and hugely rewarding. The sweat, hard work and hours that you put into your own company, benefit you directly, rather than your boss or manager, you reap all the rewards. Making all the decisions and being accountable only to yourself will give you a feeling of freedom and the rewards are many.
Securing your own financial future, earning the respect and admiration of colleagues, friends and family as someone who took the risk and went out and built their own company is a satisfying feeling. Working the hours that you want to work is a huge advantage over having to work endless hours for someone else.
Let’s get to the point and tell you how to set up your own company, how to trade on the International stage successfully and point out some of the most common pitfalls, so that you can setup and trade successfully and most importantly, profitably from day one.
Before we get started, we ran a YouTube Live session and have a recording of it below if you would like to watch. In it, we discuss the following:
An introduction for newbies, such as common used terminology and what it means.
What are the basic steps involved in importing products into the UK
Are Cash Against Documents or Documentary Collection widely in use now?
Can you Import/Export without registering a company?
How to set up and handle banking as a sole trader commission agent.
I’m thinking of a change in career going into logistics. What do I need to know?
Should I handle freight forwarding in-house?
Minimum Investment For Import Export Business
Other than knowing how to start an import export business, the next question is inevitably, how much will it cost? There’s no single answer to that question, it depends on many factors. Obviously if you’re importing high end luxury cars from Italy, you are going to need a significant amount of capital behind you, much more than if you were to import grapes from France for example.
So it’s not so much, “how much do I need” as much as what’s in your business plan and how will you fund it?
Is Your Product Hot or Not?
You’ve thought long and hard about the products you want to either import and sell or what products you’re producing for export. If you’re looking for some inspiration for ideas, we’ve got ides from six countries below to get you thinking.
Many are eager to jump right in, buy stock and start selling, however before you dive head first into your import export business and spend your hard earned money on stock, it’s vital to test the water and find out if others are as enthusiastic about your product as you.
You may think that the product you want to sell will be successful and you’ll make a healthy profit from it but in reality this may not be true. We’ve all seen Dragon’s Den where budding inventors and entrepreneurs think they have the most revolutionary idea or product but the wise Dragon’s don’t see it and shoot it straight down! Just because you like a product it doesn’t mean that the public will like it and part with their hard earned cash to buy it.
There are many ways to find opinions on your ideas and products. Sometimes you have to be a little creative in how you approach it but its time well invested. Start with friends and family and ask for honest opinions. Discuss pricing and ask your friends if they would pay for your product. Hold a focus group in your local neighborhood, give your product to the focus group and ask for their thoughts and feedback.
Find the Best Products for the Lowest Price
When it comes to selecting and sourcing products, my advice is, it’s best to perhaps pick an industry that you are familiar with so there’s less of a learning curve, if you’re into mobile phone technology and already know and understand a lot in this field, it can be a good idea to follow this road.
You’ll already understand the products that you’re looking at and probably know pricing already so these are a few advantages to sticking to what you know.
It’s extremely important to know where to buy your products from. This is one of the pillars of foundation of your import export business and will dictate if your business is profitable or not.
A common complaint we hear from many entrepreneurs is “I know what I want to import and sell but I don’t know where to get it from”. Where can you source products from with such a huge amount of suppliers in a global market place?
You must understand how to source your product from the right supplier with the right terms and price. Many traders rely on Internet suppliers like as Alibaba and other such companies. These companies a certainly worth looking at there’s no harm in this but you’re limiting your search.
There is a great myth among buyers in that you get the best price, product and terms from China. This is not always the case! China is not actually the centre of global trade. Sourcing from companies in Preferential Trading Countries (PTC) can be a much easier and cheaper way to go.
We’ve written a more detailed blog with where we discuss some ideas on sourcing internationally.
Get Samples From Suppliers
Facing buyers will be a key part of any trading that you do and following some simple guidelines will make the process easier, give you more confidence and give you a much higher conversion rate. Buyers will want to see samples of the goods they intend to buy and samples come in all shapes and sizes.
Some are easy to obtain from supplier such as clothing, toys and watches. Others are bulky, such as construction and capital equipment. Most producers will give a limited number of samples free of charge to a serious buyer or at a nominal cost.
It’s important to make sure you know how the products work when you receive these samples, as you will have to make presentations and demo the product to potential buyers so familiarise yourself with all aspects of the product. This is where your market research and focus groups will come in very handy as you will be able to take all the feedback and questions you received and be ready for the same, preparing your pitch to cover these.
Make contact with companies and see what they can offer you and at what prices. If you’re able to take a trip and go and visit manufacturers or factories, this is always time and money well spent and shows you’re serious.
You’ll also have the added advantage of seeing the product yourself, check the quality of the materials and the workmanship. Nothing really beats physically seeing it as photos and video really can’t show this.
A Range of Products Earns Bigger Profits
Now that you have sourced your product, got your samples, conducted your research which is proving positive, you may feel ready to dive in, start your import export business and start approaching buyers and retailers, asking them to place orders.
Before taking that jump, it’s very wise not to become complacent and make sure you vary your product range. This offers several advantages.
Concentrating on selling just one product will limit you. You should ideally have a complimentary range of products.
Appointments to buyers/retailers must result in a sale. If you show your potential buyer only one item, for example, an electric kettle and they do not want to place an order, your visit was a waste of your time. However if you then show the buyer your complementary range you have a better chance of securing an order. If they are not interested in your kettle, they may be interested in your unique coffee maker, toaster and waffle maker. You get the point, remember, there’s always safety in numbers!
By offering a product range, even if your buyer likes the main product you wanted to market, they may also like other products within your range, so a purchase order that would have been for just one product, could turn into an order for several products. This increases profits for you and in the worst case, if the buyer did not like the first product you had in mind, they may like another in the range and still place an order. Don’t limit yourself but keep as many options as you can on the table.
Generally speaking, setting up as an export and import agent can be the way to go if you’re looking for minimal financial commitment as it requires less financial exposure, so this is something to definitely consider.
Many businesses are set up as agencies. There are two main types of agencies available and it’s extremely important you understand both. Both have their benefits and can offer you advantages depending on your personal situation and what you want to achieve. There are traditional agents and brokers. There is a lot to understand when dealing with agencies which is a little beyond the scope of this blog but we have a blog post that goes into much more detail on how to become an import export agent.
The Art Of The Deal
Negotiation is one of the highlights of being an entrepreneur and being “the boss”. This is where you can set the terms of your business and drive a hard bargain. Negotiating is a key part of any business from the trader at your local market stall, to multi-billion pound companies the world over.
Hone your negotiating skills, be confident and a little charming and you can walk away with the deal you want. We’ve seen on Dragons Den how the dragons and the entrepreneurs will negotiate back and forth, sometimes quite intensely until the deal is done with both sides feeling great about the agreement. As an entrepreneur this is a great feeling, securing the deal you want and giving you more confidence going into the next deal.
At every junction of your import export business, you’re going to have to negotiate. Once you’ve sourced your products, you’ll have to negotiate the price, the quantities, the samples and it won’t end there. When you approach buyers, you’ll have to negotiate the terms of the sale, the retail price, the wholesale price, minimum order, delivery time, exclusivity and the list can go on. Contract terms will also need to be negotiated.
Buyers and Sellers seldom agree on terms and conditions of the contract on the first attempt. There are usually periods when both parties have to negotiate to reach an agreement. Before you enter into negotiations, you must develop an negotiating strategy. Here’s a few negotiation techniques to get you started.
Negotiating becomes easier the more you do it. You’ll start to get an idea of how far you can push and what the other party will be willing to give up. As you do more and more deals with the same parties, you will be able to negotiate better deals and likely more quickly as an element of trust will be built. As the other party gains trust in you by paying your bills on time and living up to your word, you may be able to negotiate even better deals going forward as you remove their “hassle factor”.
FREE Import Export Training
Learn how to start your own import export business.
How To Find Buyers
Finding buyers for your products is obviously key to any import export business. There are several ways to find these buyers and I bet we have some suggestions for you that you haven’t thought of.
This is where you can really take hold of your import export business and show your import export knowledge. Terms of delivery is fundamental to any business trading internationally and once you’re familiar with these you will be in a much stronger position to negotiate and trade.
It’s absolutely vital that you are aware of these terms of delivery and understand them. By understanding these terms, you’re protecting your goods and covering your risk. Get this right and you’re half way to building your import export business empire. Get this wrong, you’re going to lose money!
There are eleven different terms of delivery: EXW-FCA-CPT-CIP-DPU-DAP-DDP-FAS-FOB-CFR-CIF. These are referred to as Incoterms 2020. Check out our blog post covering “Incoterms: Think Codewords For Logistics” for more understanding.
These terms determine the buyer and sellers’ obligation and using these terms will clear up any confusion and stop any issues before any disagreement arises.
One other big part of the business of import and export is know how to use a freight forwarder. Eventually, you’re going to need to use one, you’ll outgrow the post office, the bigger your shipment size of your import and exports, so it’s worth understand how they can help you and what to be aware of. We’ve written an in depth blog on what freight forwarders do and how they can help you.
The blog also includes some tips of what to be aware of and how you can protect yourself from being over charged. Most freight forwarders are there to help importers exporters and run an honest game but as with everything, there’s always one or two bad eggs, so it’s worth being aware.
Needless to say, insurance of your goods is a must. Without this, the money that you’ve paid for you goods, should anything go wrong, is unprotected and will hit your cash flow and profits hard. Accidents happen and it’s a risk not worth taking and something that can easily be covered by insuring each shipment.
Marine Insurance gives cover from the sellers warehouse to the buyers warehouse, therefore it offers “Multi Modality” cover. As with all insurances there is small print and conditions that you must be aware of. Without understanding these, your shipment may not be covered, even though you have paid your premium. Taking the time to really understand insurance of your goods is vital to running a successful import export business.
Those Pesky Contract Terms and Conditions
Terms and conditions of trade are possibly the most fundamental part of business. Without terms and conditions agreed upon, there will never be a contract signed or an order placed.
Understanding the terms that your business associates want you to trade under and just as importantly, the terms that you will operate your business under, is massively important.
Before you start trading, it is essential you have your terms and conditions in place as a buyer and a seller. These terms and conditions will form part of your contracts and you must make sure these terms cover some basic issues.
It is very important that your terms and conditions fit the goods of the contract. For an example, if you are dealing in electrical goods, the goods must conform to International standards for that product.
In the case of food, the food must conform to import customs regulations and the food itself must conform to national hygiene standards, packing standards and shelf-life.
It’s advisable to write your terms and conditions of trade with the help of a lawyer so you can be sure they will stand any legal challenge.
There is much to cover with terms and conditions which is beyond the scope of this blog but our Online International Trade course will cover this in more depth.
Setting Up Your Company
Now you’re ready for the final step to take control of you future and become your own boss. Being an entrepreneur is exciting, negotiating and closing the deal is a rush and gives a great sense of achievement.
Hard work and perseverance is a must but watching your business grow, increasing profits and securing your own financial future is massively rewarding.
The final step is to decide how your company should be setup. There are two options, setting up as self employed or as a Limited Company.
Many trade successfully using both types of setup but you must decide what’s best for you. Consulting an accountant and explaining your current situation, can be wise before you decide. An experienced accountant will help you make an informed decision and advise you which financial records you need to keep. Most accountants will give you one hour of their time for a reasonable cost.
Keep the Tax Man Happy!
VAT is a big part of running a business and it’s extremely important to understand this as an entrepreneur and business person. If you expect your annual turnover to be £81,000.00 or more, you must register for VAT. One of the advantages of being registered is that you can reclaim the VAT you pay on goods you bought for your business but NOT on personal purchases.
An accountant will identify what you can claim for or go on line to the HMRC VAT website.
If you anticipate trading with a turnover less than £81,000.00 you may register for voluntary VAT and reclaim VAT on goods you bought for your business.
Import Export Business Plan
As with anything in life, it’s important to plan. If you don’t make a plan an just make it up as you go along, you’re far more likely to fail. Make a plan and write it down.
The best way I’ve found to write a business plan is to work backwards. I find it easier to start by answering the question, “What is my goal?” If you want to have an online shop selling the latest range of tech gadgets and toy, work backwards from there.
You’ll need a website, so plan this, look at costs, find coders and designers as we showed you how to in our guide.
You’ll need suppliers, so find the best suppliers using the tips we mentioned above, research, make contact, start to build a network, start talking to people.
You’ll need to know about freight forwarders and Incoterms 2020, so enroll in a training course so that you’ll be familiar with these terms and how now to lose your shirt when you stating trading on an international level.
You’ll need buyers. We all need buyers or there’s no business. So use our guide as a starting point and experiment with what you have.
There’s more that you’re going to need to think about and include but this is to get you started. Work backwards and analyse what you’ll need to achieve your goal your dream. There’s no reason why you can’t achieve, just work hard, stay focused, be persistent and don’t take no for an answer!
Build Your Own Website
Once you’ve sourced your products and established your product range, consider how you’re going to sell your products. Check our blog post with some ideas and suggestions to finding buyers but also consider using the web and setting up you’re own website to export globally.
Your own website has several advantages as you can cut out the middle man from any direct sales and also acts as a shop window for your company for any new suppliers you’ll contact making you serious and professional.
These days it doesn’t have to cost a fortune but we go into much more detail in our blog post on how to export globally.
Be Your Own Boss – Get The Right Training
There’s more to learn to fully run your own import export company but this should give you some good ground work. Once you’ve thought about these points and written down your ideas and made notes after doing your homework, you’ll be in a much stronger position to get going.
It’s hard work but the challenge is rewarding once you start the get the first coupe of deals done. You’ll grow in confidence and be able to streamline each part of your supply chain as well as learn the best avenues for selling your products.Many people start their businesses without being aware and unfortunately, will fold within the first 24 months suffering the loss of all the money they invested. It’s so important to understand your risks when importing and exporting, so we’ve make sure to review our quick guide on the nine most common mistakes when exporting so you’re not a victim of any of them.
In order to really understand all aspects of trading globally, check out our online International Trade course. It’s a “to the point”, all-in-one course that teaches you exactly how to import and export in the real-world. No logistical theory, just streamlined content taught with a series of entertaining animated videos, validated by the London Institute of Shipping and Transport.
Import Export Business Opportunities
As with any small business venture, sometimes we need help getting ideas together as a kick start to moving things to the next level. In setting up export businesses, the first question is always, “What can I import and sell?”. Finding a niche or a gap in the market takes some time and research but there’s generally a market out there for everything.
There’s literally a world of opportunity within international trade and the best part about it is researching what’s out there to import and sell at home, is the chance to travel and discover amazing products from other cultures and countries. Before you know it you’ll be an international trader running a successful business selling quality products from every country!
Well, let’s take one step at a time, so pack your bags and grab your passport, here’s some ideas to get you thinking from six countries. Once you’ve figured out what you want to sell, check out our guide on how to find buyers for your products.
Leather is a prominent industry in India with leather also being one of the most widely traded items in the world, always in demand and can be considered ageless. Shoes and coats never go out of fashion and can last for years, so becoming an export merchant for this niche may not be a bad idea. Leather purses, bags, briefcases, belts, wallets, gloves, the list goes on, there is a huge range of products to import.
There are more than 1000 leather exporting companies in India, making it arguably one of the best import export business in India. Some of the prominent players are Prara Leathers Private Limited, Rahman Industries Limited, Farida Prome Tannery Private Limited, Tata International Limited, Super Tannery Limited and Blue Diamond Leaders.
ABTS Training also has a contact in India that has joined our Facebook group offering leather goods and handicrafts.
India has long been considered to be the hub of the global jewelry market because of its low costs and and highly-skilled labour. India is the world’s largest cutting and polishing centre for diamonds. The gems and jewelry market in India is home to more than 300,000 players, with the majority being small players, so this is a great opportunity to go to India experience the culture, speak to jewelry dealers and see what opportunities are there.
Jewelry is such a huge market in India with a market size of US$75 billion as of 2017 and is expected to reach US$ 100 billion by 2025, there’s no reason why you can’t take a piece of the pie and start trading in jewelry.
Egypt is famous for having the highest quality cotton in the world and is always in demand, worldwide. Production using fine Egyptian cotton includes shirts, fabrics for trousers/shorts, worsted wool fabrics, denim, fleece, jersey, flat/woolen knits and much more. Apparel production includes active sportswear, outerwear, underwear, suits, socks, infant wear etc. Production of arguably the most famous use of Egyptian cotton includes a wide variety of bed sheets and bath towels.
Perfumes and Cosmetics
Egypt was once the prestigious center of the international perfume industry. Perfumes were created and mass-marketed elsewhere in the ancient world but it was Egypt that was most renowned and identified with the international perfume trade.
80% of the world’s natural jasmine products, come from Egypt, where specialists in this ancient art extract the aromatic oils from a profusion of flowers, leaves, roots and herbs and export them to perfumers in Paris, London, New York and even Moscow. Egyptian perfumes is a huge export market with some great opportunities.
Locally Made Weaves
According to some estimates, Africa’s dry hair market, this being the market for weaves, wigs and hair extensions, is right now worth over $6 billion a year and growing rapidly. Western countries, particularly the US and UK are in high demand of weaves and will pay top dollar for real human hair. Incidentally, Thailand is also a great source for real human hair, sold in many of the markets for very reasonable prices.
Ginger, Garlic, Sesame Seeds and Nuts
Nigerian exports of nut related produce including oil seed, oleagic fruits, grain, seed, fruits is massive. Sesame seeds are in much higher demand too being that Sushi restaurants are now so popular. Ginger is one of the most traded spices in the world and Nigeria has an abundance. Starting a Trans-Sahara or Trans-Atlantic trade with these products will be profitable but take some research and time to find buyers for your exports. Garlic is also on top of the list and is easily exportable from Nigeria.
In our Facebook group we have suppliers in Nigeria offering tigernuts, garlic, ginger, sesame seeds and palm kernal oil.
If you’re getting a taste for an importing business and serious about import and export, sign up to our free training, ” How to start import export business. “
FREE Import Export Training
Learn how to start your own import export business.
Exports from Turkey are exploding with 2018 setting a record year of $168.1 billion, demonstrating the high level of demand for Turkish products. Turkey is one of the world’s leading manufacturers of knitted fabrics, having the largest share in Turkish industrial production and being one of the first established industries in Turkey. Turkish knitwear is known to be of the highest quality with worldwide competitive pricing making it an ideal product to import. The potential for solid profits within this textile is huge.
One of the world’s most prominent carpet manufacturers, Turkey is continuously expanding its global market share with increasing exports year-on-year. The Turkish carpet industry is renowned worldwide due its superior-quality products and advanced technology in production. Turkey currently holds a 15 per cent world market share in carpet trade and ranks in the number two spot behind China who takes the top spot.
In our Facebook group we have supplier offering carpets from Gaziantep in Turkey.
Mobile Phone Accessories
In every mall, high street and market stall, there are shops selling just mobile phone accessories. From unique looking earphones, crazy and cool phone cases, to selfie sticks and battery packs the appetite for the latest, coolest phone gadget is is enormous, worldwide. Importing these products is a great opportunity and the cost of these products in Thailand are significantly lower than other countries worldwide, coupled with quality craftsmanship.
Shoe shoppers love Thailand! There are a gazillion varieties of shoes available in Thailand and at great prices. Importing shoes is a relatively safe investment as demand is stable and profit margins are solid. Street markets and local retailers are a good place to start when it comes to finding buyers.
South Africa’s wines are held in very high esteem but South Africa is not taking full advantage of and could export more wine to the rest of the world. With a weaker currency, South African wines are comparatively cheaper to those of other countries with stronger currencies. South Africa is currently the 12th biggest exporter of wine, with wine exports of SA bringing in $661.6 million. However, South Africa’s wine exports was the 2nd cheapest of the top 13 wine exporting countries in the world. This is an export market waiting to be taken advantage of and will likely see comfortable profits.
Gems and Precious Metals
South Africa Exports of Pearls, precious stones and metals was US$14.9 billion in 2018. Needless to say there is always a demand for diamonds and gold around the globe. The nations with the highest demand are Japan, USA, UK, Hong Kong, Germany, UAE and Belgium.
Direct export is defined as the process of a supplier selling their products directly to customers or a middle man (such as an import export agent) in a foreign country. There’s advantages to direct export, such as keeping complete control of your logistics operations and direct communication with your customers, allowing you to offer the level of customer service you want, rather than entrusting this to a third party logistics company.
How To Start An Export Business
Knowing how to start an import export business will save you time, money and stress. Understanding that you must be proactive not reactive and learn the basics of international trade before you start on any new import export venture, knowing where the pitfalls are and what to look out for. Our webinar recording below goes into detail on what you’ll need to know.
How To Export
Knowing how to export or import is important knowledge to have for many businesses for obvious reasons. If you’re selling products nationally and want to expand, the international market is available to you and the globe is a much smaller place today than it once was, which is where there is an advantage of direct export. Finding international buyers for your products now, isn’t as difficult with such a connected world. It’s actually possible to find buyers using a laptop, a few well written emails, some key negotiation techniques and importantly, your confidence.
Importing and selling products is an obvious business that many successful entrepreneurs begin with and build sizable companies as their experience and business network grows. As with anything, the more you do it, the more you learn and the easier it becomes. We are often asked, what’s out there so here’s 12 ideas from 6 different countries that we researched as far as some ideas for what you can import and sell.
So, the next question to answer becomes how to export, or import? This guide is going to touch on the basics that you’ll need to know. There’s a lot of content to cover if you want to import export as a career but this will get you started.
Direct Exporting Advantages and Disadvantages
As an example, Zappos in its early days entrusted its logistics operations to eLogistics, which took away the hassle of dealing with warehousing, scanning in their products when they arrived, dealing with customer orders, returns and shipping. The advantage was that they were able to focus on the business itself, marketing, growth and the many other things that are involved in running a business.
However as with everything in life, using export intermediaries had its problems. In short, eLogistics were not able to keep up with the level of shipments arriving at the warehouse nor customer orders. Customer service suffered and people became unhappy. Zappos took control themselves and went the route of direct export with their own warehouse and shipping operation using UPS. For the entire story, I recommend the book, “Delivering Happiness” which will clearly explain direct exporting pros and cons.
How To Export Direct
Even as a small business, learning the information about how to export and create a strategy to direct export to markets worldwide will give you some massive advantages. You’ll have control over your logistics operations which is important for your global market entry strategy.
Methods of Payment
Within international trade there are various methods of payment used. There’s obviously cold hard cash where banks and wiring transfers work well for “smaller” manageable budgets. However, what happens when contracts become larger, perhaps even into millions of dollars? How can you safeguard being paid and what if you have to buy stock or materials when you’re strapped for cash? The limitations of exporting is more often than not, cash!
One method for this is through the use of letters of credit. We have already written an in depth blog on this so we won’t repeat it all here but knowing what methods of payments are available to you and how to use them is very important. Letter of credit are one of the pros of exporting.
Other methods of payment are documentary collections or consignment but we will leave these to be discussed at a later date. One of the most important things to really consider when it comes to payments within international trade is that if you’re exporting products, a sale isn’t a sale until you get paid and for an importer, you haven’t bought the goods until the moment you receive them. Keep that in mind!
Your EORI Number
In the UK if you are going to trade internationally, you’ll need an EORI number. This is particularly relevant at this time as we are on the verge of leaving the EU, at the time of writing, without a deal. This means that while trading with the EU, before Brexit was relatively hassle free, it will adversely change and trading with any EU country post Brexit (as it stands) will be like trading with one outside the EU, for example Brazil.
Learn how to start your own import export business.
Direct Export Using Freight Forwarders
Eventually you’re going to need to the services of a freight forwarder. These guys will be the guys that actually move your goods from the source to your destination. Using the post office is only so good as it only works for smaller packages that you can take to the post office and send. You obviously won’t be able to drive forklift trucks there and leave them with your pallets of amazing products.
Insurance is never the most interesting subject and one that we would all like to skip over but it’s super important for direct export. If your goods don’t arrive at their destination, who’s fault is it? Who has to suffer the financial loss? How will it all be rectified? Being insured takes care of those issues, accidents happen and things get lost. Make sure you’re not on the wrong end of that scenario. As you’ve probably guessed, check out a recent blog on marine insurance to learn some of the details involved in covering yourself.
Pack It And Book It For Direct Export
Simple enough, when you’ve got your order, you’ve packaged up your products safely, got all your documentation together, it’s time to book it with your freight forwarder for direct export. Always best to get a few quotes as with anything, to make sure you’re paying a fair rate. By this time, you should have already nominated your freight forwarder and it’s time to get it booked in for shipping.
There’s a lot of documentation that’s required for moving goods internationally using direct export so make sure you know what you need and that it’s all correctly completed and processed. Airway bills, bills of lading, certificates of origin all need to be in order. It’s a little too much to go into detail here but we do offer an online course if you want to sign up and learn more about this important side of learning how to export.
Feel free to print out our handy guide as a reminder to these important 6 steps.
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Import And Export Top 10 Tips
Now we’ve got the basics, and they are just the basics, it’s a good idea for us to give you our 10 best tips for importing and exporting so you can become a direct export expert. This comes with years of experience and the pain of sometimes getting things wrong and having to suffer the financial loss of those mistakes so hopefully our top 10 will help you avoid doing the same:
1. The Tariff Book
If you’re importing any products, you must be aware of the tariff book and consult with this before you place any orders. The tariff book is the bible of international trade and tells you the rate of import duty, if you need a license to import the products you’re buying or if there are any restrictions on quantities that an enter the country. This is very important so don’t neglect to check the tariff book before you place any orders.
2. Get Written Quotations
It may seem obvious but it’s still worth stating, get written quotations from any third party that you’ll be doing business with. This can be freight forwarders, transport company’s or clearing agents for example. Once you’ve got a written quotation there can’t be any argument later on about what the cost was or what it was supposed to be. Make sure you have that written confirmation for a much more stress free direct export process.
3. Do NOT Estimate Costs
Estimating costs is painful lesson to learn in learning how to direct export. There is no place for estimating any costs for the simple reason that at times, you may find yourself working with very small profit margins. Deals can still be worth it and some good profit realised, even if the profit margin isn’t exactly what you want but by estimating the costs and getting it wrong, it can wipe out any profit and even leave you at a loss. Don’t do it.
Take the time to get quotations, get them in writing as mentioned in the previous point and open a spreadsheet and input all of your actual costs. From there you can do the numbers and see if the risk to reward is worth it.
4. Use Incoterms For Direct Export
When shipping your goods, it’s vital to use Incoterms 2010. If you’re not familiar with these, check out our blog on, “What are Incoterms and how are they used?” and it will hopefully become clearer to you.
Think of Incoterms as code words used within the shipping industry that let the parties involved know their exact responsibilities. We won’t go into it again, just check out the blog.
5. The Terms and Conditions
None of us really have any interest in reading the terms and conditions and the small print in anything. We’ve all got better things to do but a big lesson in learning how to export is to read the terms and conditions. In fact, read them and then re-read them.
You do not want to be caught out on something that you weren’t aware of that ends up taking a chunk out of you later. As boring as it is, read the terms and conditions!
6. Make Your Terms and Conditions Solid!
As boring as it is to read someone else’s terms and conditions, make sure your terms and conditions are solid and fulfill all the conditions that you need. You can always negotiate the terms with a particular client individually if they aren’t happy and it’s worth it but start off with everything in order and as you need.
If you can afford it, it’s worth consulting a lawyer just to make sure everything is legally water tight.
7. Understand Freight Rates
Understand the rates that you’re paying and shop around. In our blog discussing freight forwarders, we have an example of a client who was being heavily over charged for a long time by his freight forwarder. Had he have understood and done a little research he could have saved such a lot of money. Ignorance costs you, no one else.
8. Direct Export Costs
Understand all of the costs involved in sourcing, buying, shipping, duty, how long it will take, marketing and selling. You need to know your costs before you can figure out how much to sell your products for, whether anyone will buy them at that price and what your profit margin will be. Be precise.
9. Question Invoices
Don’t hesitate to question an invoice if it doesn’t look right. Don’t worry about coming across as rude, you can be polite but make sure you get an explanation if the invoice isn’t correct. This is where you can always fall back on your written quotation and show that the invoice amount is not in line with the amount you were quoted. If you got your quotation in writing there won’t be any arguments or problems and the invoice will be amended.
10. Don’t Be Blind
Knowing how to export is a fairly complicated process. There’s lots of parts and you must be aware of what you’re doing. Whatever you do, don’t wing it…it will cost you.
Keep this guide handy to remind you of our top 10 tips for importing and exporting:
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Direct Export Common and Costly Mistakes
So in this short journey of learning how to export, we’ve gone through the basics and you’ve got our top 10 best tips for importing and exporting. There’s much more to learn but this gives you a good foundation to spring board from.
Now it’s a good idea to run through the 9 most common and costly mistakes made by international traders, so you hopefully won’t!
1. Understand Sourcing
If you don’t know how to effectively find products you’re massively limiting your import business. You must know how to find the products you’re looking for, from price, build quality, working relationship with your supplier, reliability and credibility to name just a few of the aspects that are important. Knowing how to source goods internationally is huge.
Our blog goes into some ideas on how to do this to give you a head start so check it out. It’s going to be key to a successful importing business.
2. Not Identifying All Your Costs
Don’t cut corners, don’t guess, don’t estimate. Make sure you have the entire import or export process covered and you know your costs from start to finish, to the last penny. Keep track in a spreadsheet. If you don’t know your costs, you don’t know what you need to sell your goods for and you won’t have a clue what your profit margin is.
Include the products themselves, the shipping costs, the import duty, warehousing, cost for distributing to your customers, VAT and any other cost you can identify. You will lose money if you don’t do this.
3. Not Understanding Import Regimes And Correct Tariff Number
If you don’t understand how to correctly import your products, it’s likely to cost you more than you need to. You may end up paying more import duty than you should have for example. Take the necessary steps to ensure you understand the import regime and tariff number.
4. Not Understanding Air or Sea Freight Structure
Take the time to get to know how freight rates work and get a variety of quotes to make sure the company you want to use is competitive. Our blog on freight forwarders give you some good advice so make sure you check this out.
5. Not Understanding Methods of Payment
Whether you are paying your supplier or you are to be paid, make sure you understand the methods of payments available to you. A sale is not a sale until you’re paid and things can and will go wrong in between. Letters of credit is one such method of payment that all international traders should know how to use.
6. Not Doing Your Homework
We’ve all seen Dragon’s Den where the entrepreneur thinks he’s got a world changing product which is promptly shot down by the dragons after a little digging. You may think you’ve got a great product that’s going to sell like hot cakes but you need to know others think the same thing and want this product before you part with any cash.
If you don’t do your market research that container load of yo-yo’s that you were sure would be the next big thing may be stuck in your garage and spare bedroom for years to come.
Find your customer base for the products you’re selling and don’t limit that audience.
7. Not Identifying All Sales Channels
Not finding as many sales channels as you can is a waste. If you can sell your product directly to retail shops in the high street, wholesale to distributors or online globally, take advantage of all those opportunities.
Get out and make sure to meet people, go to meet ups and conferences and get your products out there.
8. Not Understanding Terms of Delivery
If you don’t understand the terms of delivery you could be charged for costs that you’re not actually liable for, further reducing any profit margins. Knowing exactly what your responsibilities are is important and can save you hard earned money.
9. Lack of Negotiation Skills
Negotiation skills are a massive part of international trade and business in general. You need to hone your skills and make sure that you are able to always get the best deal you possibly can. If you can crack this, you will very likely make it as a successful international trader and be able to run a very profitable business. Negotiation skills will increase with each deal that you seal and with that, your confidence will also grow.
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Be Proactive, Not Reactive
Obviously like any new business or career there’s a lot to learn and as you can see there are pros and cons of direct exporting but one of the best pieces of advice we can give is to be proactive, not reactive.
By being proactive, you will firstly make sure that you have gained the knowledge you need to import or export your products globally and really understand the issues that you’ll face. You’ll take all the necessary steps to have a streamlined import and export process, you’ll have done all your research and homework and your process will be organised, efficient and you will have all your costs to hand. You’ll be able to analyse your risk within the process and foresee any problems or issues and develop any contingency plans to handle these problems.
By being proactive it will save you a lot of time, stress and ultimately money, keeping your profit margins healthy and your work life relaxed.
Being reactive is usually the exact opposite. Not being fully prepared, not having a good understanding of what you’re doing, estimating costs and when there’s problems and issues, trying to deal with them at the time and figuring out how to handle on the fly. This obviously leads to hugely increased stress levels, valuable time been taking from you and of course, in many cases money being lost or wasted, which is critical, especially when working on on tight profit margins.
There are advantages and disadvantages of import and export and making sure you are aware of exactly what they are will be the difference.
The definition of sourcing is very simply, “Finding products to sell for your business.”
Sourcing products around the globe is obviously a very important factor in supply chain management and thankfully a much easier task than in years gone by. Jumping on to Google, makes the sourcing process much easier and quicker and is certainly the first port of call for global sourcing but there are still other avenues that shouldn’t be ignored when learning how to setup your import export business.
YouTube Live Global Sourcing
International purchasing and global sourcing of products of obviously the starting point of any import export business. In the recorded YouTube Live session below we discuss the difference between buying locally and international purchasing and identify the skill sets needed to be a successful buyer on the global stage.
As an example, we once helped an importer and retailer of pine furniture who had signed up to our online course as he wanted to learn other methods of sourcing and procurement and increase his options of suppliers and not be limited to his sole supplier in China.
This entrepreneur had seven furniture retail outlets throughout the UK and his business was growing. He felt he was vulnerable having just one supplier and for security needed to look at other options potentially in other parts of the world, building a more strategic sourcing plan. At the same time, he wanted to gain a competitive edge being that all his competitors were purchasing selling the same furniture designs as him, so all he could compete on was price which was squeezing profit margins.
After some consideration and research with his customer base and examination of his inventory compared to his competition, the data showed him that he needed to develop bespoke designed furniture, which he felt would give the needed edge and these designs would be marketed as exclusively his. After listening to his customers and establishing what products and services they wanted, he catered for their needs and desires and went about drawing up a range of furniture.
He approached his Chinese supplier and manufacturer and inquired about producing this range of bespoke pine furniture but they were unable to accommodate this request because of the large cost involved to them in retooling their machinery for a comparatively small order.
Supply Chain Sourcing
With this, we advised on product sourcing alternative manufactures and to look closer to home. On doing some initial research, we suggested Cyprus as a first point to finding new sources as we found it to be a pine furniture manufacturing base and pine wood was in abundance, lowering the price of the raw material.
The next step was of course to find a supplier and manufacturer there, one of the types of sourcing we decided to tap into was contacting the Cypriot embassy in London and ask them if they would be able to recommend any reputable and established companies. They were very helpful and of course, pleased with their sourcing involvement as they’re happy to promote the Cypriot manufacturing industry, in this case, furniture makers and we were pleased to receive credible recommendations.
The Embassy asked if we would like to be introduced to a local sourcing company but actually made several introductions to manufacturers that were fit for purpose and eager to win the contract. Our entrepreneur discussed his needs for his bespoke pine furniture to be manufactured and exported to the UK which were well received and two reputable and established companies submitted quotations, both within the same ball park figure.
Both companies invited our entrepreneur to visit and have a tour of their factories, see firsthand the quality and craftsmanship of the furniture and discuss his final requirements.
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After reviewing both proposals, further negotiations and being impressed with the manufacturing process of both companies, the order was actually split between the two companies giving our entrepreneur further security in having two reliable manufacturers but also being able to gain an air of competitiveness between them, ensuring that price would remain competitive.
The Chinese supplier was kept and continued to ship furniture and was offered to customers as a lower priced range, keeping this target market but putting our entrepreneur in a position to up-sell the bespoke range when possible.
All Your Eggs
The saying goes, “don’t keep all your eggs in one basket” and in this case it was great advice to follow. The result was an increase in customers, sales and profits due to people being unable to buy this range of furniture anywhere else and the retail business has gone from strength to strength.
The Internet is without doubt the easiest and fastest way to find suppliers and manufacturers but there are alternatives. In this case, it was beneficial to make contact with people that we were able to trust in the Embassy and use their knowledge and credibility to find these reputable manufacturers.
Chambers Of Commerce
Another option is to contact the Chamber of Commerce in the country or area that you’re looking to source products from. Like the embassies, the Chamber of Commerce also wants to promote their businesses and attract foreign trade, so making a contact within the Chamber can be a good move.
Contact and let them know what you’re trying to achieve and ask if they will send you a list of their registered businesses in the sector your looking at. They will only be too happy to help.
Another great way to source products is to go to trade fairs. Trade fairs happen all over the world and simply Googling trade fairs in your country/city will like bring up results that you won’t have to travel too far.
Check these out and subscribe to ones that are of interest to you so you’ll know when there are more upcoming. They’re usually free to attend and you’ll have a chance to check out some great products and in some interesting niche’s.
Facebook is a great tool to find suppliers offering their products. There’s hundreds of groups out there with particular niches that you can search and join. Get chatting to suppliers as well as other importers and exporters.
ABTS Training has a group recently setup which all are welcome to join.
Keep Thinking Outside the Box
When starting of growing your business, it’s worth keeping your options open and checking all avenues as well as continuing to ask yourself, how can I keep my edge?
Travel The Globe
So if you’re ready to start looking for products around the world, the best and most fun way to do it is to start travelling! We’ve done this ourselves so have a few tips for you as far as how to make your way around.
AirBNB is a global leader in accommodation and we’ve all heard of it. Very easy to use and you can find some great deals as you’re renting from individuals much of the time, not hotels. We’ve used Airbnb many times without any problems so sign up here.
Agoda appears to have cornered the market in South East Asia and offers the cheapest rooms between all the various booking and compare sites. If you’re heading to Asia, it’s certainly worth signing up and installing their app on your phone and signing up for an account. It could save you some good money.
If you’re planning on sourcing in Europe or the America’s, it’s worth comparing prices with Booking.com. These guys seem to have very reasonable rates so again, install and open an account and keep the app handy.
Ride sharing apps are a clever bit of software and are massive business in the travel sector now for good reason. They’re easy to use, you get a price before you ride and unlike taxi’s they can’t drive the longest possible route to your destination, raking up time on the meter. If you have a complaint you can file that with the ride sharing company and make a dispute.
Below are the three top ride sharing apps you’ll need to travel the world.
Grab is the ride sharing app in Asia. Download the app and create an account. Ride rates are very good and you can even get around on Grab Bike, which puts you on the back of a motorbike, gets you to where you have to quickly with a bit of a thrill!
Uber is in many countries worldwide and probably the biggest name in ride sharing. Wherever you’re going, sign up for an account with Uber and download the app. It’s good to compare prices with other ride sharing apps.
Lyft is available in the US and Uber’s main competition there. You won’t need any more than these three ride sharing apps to find your way around the world. Sign up and download Lyft here.
Once you’ve sourced your products and you’re ready to make your first order (and all subsequent orders for that matter), you’ll need to transfer money. Using your bank for this, will probably come with a hefty fee. By using Transfer Wise, you’ll save about 85% in fees and get a great exchange rate, adding to your profit margin.
You can register from most countries in the world so wherever you are, sign up here and start saving on international transfers.
Revolut is a fantastic credit card, giving you almost spot rates and low fees. It’s not a “credit card” as such, you top up your card in your home currency, then convert it to the currency of the country you’re travelling to and use as you would any normal credit card.
You don’t have to worry about going over your limits as you can’t spend more than you have on the card. It’s a super convenient way to handle your finances on the move.
At the moment it seems to be only available in Europe but keep an eye because they are going global soon.
Sign Up Here and get a free card (they’ll waive the sign up fee for you).
So there you have it, there’s nothing stopping you from getting out into the world and seeing what’s out there, find your niche and getting your own import export business off the ground.
Our online international trade course has been validated by The London Institute of Shipping and Transport since 2005, giving our students the confidence in the practical, hands-on way we teach you have to import and export. Our course is streamlined, excluding any logistics theory, getting to the point and showing you what you’ll need to know and understand in order to move your goods from source to destination. We do this with a series of entertaining animated videos, opposed to asking you to read pages and pages of text, or listen to a teach at a whiteboard for hours.
We’ve trained hundreds of students and helped further their careers as well as helped setup countless successful businesses, with many of our students now their own boss running their own successful companies.
With over 30 years of experience, we’re here to offer you one-to-one support and bring your career or business to the next level.
Best Trade Education Provider 2017
BEST TRADE EDUCATION PROVIDER 2017 by Trade Finance Global, a great honour to receive the award which recognises the high level of course presentation and content we deliver.
The judges comment, “We were impressed with the simple, straightforward and clear way that ABTS presents their course. The course covers vital introductory elements such as Transport types, Payment mechanisms and Incoterms.”