Start Your Own Freight Forwarding Business

This guide intends to give you the overall information that you’ll need to know and understand to start up as a freight forwarder. It’s not intended to be a comprehensive guide.

As with any new import and export business venture, there’s a lot to learn and understand and you’ll be learning and improving your skill set as each week passes in the freight business. At the start, it can feel very overwhelming but this is completely normal. As your business plan develops and you start to understand the costs involved, everything will become clearer.

During my career I have dealt with many, many freight forwarding businesses and even setup as a freight forwarder myself, so learned much about the freight industry, shipping industry, customs clearance and supply chain.

After several years I was offered a good deal to sell my freight forwarding business and as it was a part of my business plan and exit strategy, I sold it.

Start up as a small business and you’ll find if you do things the right way, business grows, you’ll handle different types of freight, you’ll gain more and more knowledge and more control as be able to compete with other freight forwarders.

With that in mind, let’s get started. We’re going to address the following points:

How To Start a Freight Forwarding Business:

  1. Setup Your Business: Limited Company or Self Employed?
  2. Know the Tools of the Trade
  3. Have an Good Knowledge of Export Documentation
  4. Understand Freight Rates
  5. Understand Incoterms 2020
  6. Use Third Parties to Reduce Costs
  7. Understand Export Entries on CHIEF
  8. Be Aware of the Skills Required

Starting Freight Forwarding Businesses – On YouTube

The video below explains the the same content as below for those that prefer video:

Business Setup: Limited Company or Self Employed?

The first step to take is to decide how to structure any new freight forwarding businesses. To be clear, we are not experts in company formation and we can’t offer any advice on this, it’s best to speak to a qualified accountant and discuss your own personal situation.

There are pros and cons to each and we can only give you some of the basics, just to give you a very general idea.

Startup as Self Employed

One of the most important points to be aware of and understand as a self employed individual in freight forwarding, is that being self-employed means that you could be held responsible and personally liable for your company’s debts, so your personal assets are at risk. If you run into problems with your company finances, assess such as your house could be seized in order to cover the debts.

This is of course the worst case scenario but something that’s very important and must be understood and carefully considered.

As a limited company, you have limited liability which protects your personal assets. Your company assets and finances are completely separate from your personal.

You also cannot expense your salary whereas with a limited company you can, meaning any expenses you have as a business, you can offset against profits, reducing your tax liability.

Advantages are that you can pay yourself with minimal paperwork and you don’t have to adhere to the strict rules, upkeep of admin and legal obligations of a limited company.  

If your income is more than £1,000, you’ll need to register with HMRC and fill in a Self Assessment Tax Return each year.

Startup as a Limited Company

As mentioned above, as a limited company, your personal liability is protected from any company debts and company finance.

As your freight forwarding business incurs expenses you can claim these in your yearly accounts which help to offset and reduce profits, meaning your tax bill will hopefully be less.

Having a limited company does however mean you have to adhere to certain laws and strict regulations on how the company is run, file accounts each year and make sure all your admin and paperwork is kept in good order.

Another important point, in either case, if your turnover is more than £85,000 per year, you will need to register for VAT.

We strongly recommend that you discuss your situation with an accountant to understand the advantages and disadvantages to you personally.

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Always Minimise Your Startup Costs

When you start a freight forwarding business, keeping your start up costs as low as possible and knowing the tools of the trade are absolutely key to your success.

Your business idea is one thing, you may dream of plush offices, an expensive ultra-secure warehousing facility, your logo on the side of a fleet of trucks but the reality is such a business with this business models and huge start up costs is very likely to fail.

Remember, a freight forwarder sometimes has to operate on very small margins. You must be able to withstand the freight industry going through tough business cycles, which of course does happen.

We’ll come back to the subject of starting a freight forwarding business using third-parties at the end of this blog so read on.

Know The Important Tools of the Trade

So, let’s imagine you’ve setup your freight forwarding business and received your first lead.

As an example, let’s assume you get a call from a client that wants to move a full container load (FCL) from Mobassa, Kenya to Southampton in the UK and contacts your for a quote.

What do you do next?

Lloyds Loading List

For these cases, thankfully we have Lloyds Loading List. Lloyds Loading List has been around for longer than I have if you can believe that! It used to be a book that listed all the voyages of vessels around the world, their port of origin and port of destination.

Of course now it’s online and you can quickly search and find shipping lines that will sail the route you require. Using our example, from Mombassa to Southampton we see:

We can see that Kestrel Liner Agencies LTD trade this route so we can contact them for a quote.

I believe you can subscribe to Lloyds Loading list and you’ll receive weekly hard copies of their publication, providing you with sailing schedules, and a comprehensive export directory.

A must if you’re serious about starting a freight forwarding business.

Croners Reference Book for Exporters

Aside from knowing the sailing routes for vessels, you’re also going to need to know what documentation is required for cargo. Croners Reference Book is what it was called in my days as a freight forwarder but it’s become Croner-i and like everything else, moved online.

Croner-i will tell you what documentation you’ll need for the cargo you’re moving from the port of origin to the port of destination, which will save you a lot of time indeed.

Croner-i has been very helpful in offering ABTS® readers a free “lite” account which you can setup here. If you decide to subscribe you’ll have access to their full range of data and information which I would certainly consider as part of setting up a freight forwarding business.

A Good Solid Knowledge of Export Documentation

This may be stating the obvious but a very good knowledge and understanding of export documentation and procedure is not just important but it’s vital if you have any chance of starting your own successful freight forwarding business.

We’re not going to get into the details of the documentation here as we have written several other blogs and posted other YouTube videos on various export documentation but please know that at a minimum, you’ll need to know about:

Export Documentation and Procedure

To really gain the practical knowledge and understanding required of export documentation and procedure, we offer an online course teaching you exactly what you need to know. Click here for the full syllabus.

Understand Your Freight Rates

Freight rates isn’t something that is usually thought of as far as specialised knowledge when it comes to starting a freight forwarding business because it’s assumed that when you ask for a freight rate from a shipping line or airline, you’ll get a quote as you would any other type of industry.

Shipping freight is different. When you ask a shipping line for a sea freight rate, they may first ask, “FCL or LCL?”. What they’re asking is are you shipping a “Full Container Load” or “Less than a Container Load“? So in the very first instance, you’ve got to understand this.

Next, they may ask you what are the dimensions of the cargo, if less than a container load. That’s no problem and you give the dimensions as needed.

The reply you’ll get is something similar to, “$59 Weight Measure“. You’ve obviously got to know what to do with this and how to calculate it into a quotation for your client. Your shipping line may well charge you “BAF” and “CAF” too, you must be familiar with this.

It’s beyond the scope again of this blog to delve into the details of freight rates but if you want to know more about these terms and gain a basic understanding of freight rates, check out our video below:

Make Sure You Understand Incoterms 2020

Incoterms 2020 are the cornerstone of shipping and freight forwarders MUST understand these terms. Without understanding what Incoterms 2020 are and how to use them, you’ll fall at the first hurdle. We’ve written an extensive blog on the subject so again, we won’t go into much detail here other than to explain that Incoterms are there to make it absolutely clear to the buyer and seller, where each party’s responsibility lies as far as the place of delivery, costs and risk.

There are 11 Incoterms 2020, think of them as code words for shipping. You NEED to know what they mean and understand how to use them.

One of your first startup costs should be a small investment in Incoterms 2020 which you can by from the International Chamber of Commerce.

For more, check out our blog post on Incoterms 2020 or watch the video below:

Use Third Parties Whenever You Can

Starting your own business is exciting. It’s quite natural to want to have everything perfect, your logo, your brand, the right warehouse, trucks with your shiny new logo on the side. Many people when they start their own venture go down the road of massive outlay, fancy new offices with the latest computers and latest iPhone models.

DO NOT DO THIS! When starting your own business and indeed, at all times, KEEP YOUR COSTS AS LOW AS POSSIBLE.

If your current computer works, you can get email, have an internet connection and can create spreadsheets, keep it as it is. Don’t accumulate extra costs. If your phone makes calls, you can answer emails and texts and do what you need to do, do not upgrade it.

Do not go out and get into a lease agreement for a warehouse, until you need it. Enlisting the aid of third parties. Rent some space in a third party warehouse for a fixed amount each month. Find out of you can expand the space should you need more and when you start to outgrow this, then look to rent your own warehouse, when you have an established client base and cash flow to fund it.

Use third party haulage companies to move cargo locally, before you go and buy your own vehicles. Make sure you have enough demand, cash flow and that you’re profitable, before any large outlay of cash or investment.

Always keep your costs to a minimum. They are the key differences between successful freight forwarders and freight forwarders that fail.

The Two Skills You’re Going To Need

There are two major skills required that you’ll need for starting and running your own successful freight forwarding business.

Negotiating skills and presentation skill.

Negotiating really is a certain type of skill that improves over time and the more you practice. It’s a major part of business in general but running a freight business, you’ll be negotiating with customers, with shipping lines, with airlines, warehouses and trucking companies.

You’ve got to know how to negotiate and understand how to get the best deal possible, which may not actually always be what you’re demanding. There’s more to consider for successful negotiations. Our negotiating skills blog reveals more so check it out.

Presentation skills are needed as you’ll be presenting to companies and need to explain to them in a clear and concise way, why they should entrust their cargo to you.

You’ll need to make sure you have the answers to their questions, understand freight rates, understand exactly what you can offer that company, what makes you unique and why they should work with you.

Present confidently but not arrogantly.

Bringing It All Together

That brings us to the end of this short introduction on how to start your a freight forwarding business. I hope it’s useful and given you enough to think about and research.

I spent many many years in this industry, I started my a freight business many, many years ago, ran it successfully but learned many lessons along the way as if can be a very competitive market, so you have to be able to adapt.

I sold the business in the end and was rewarded financially for my efforts and if you would like to learn the best practices to run your own successful freight forwarding company, definitely consider our Export Documentation and Procedure course, where I teach you the practical lessons that you’ll need to know, not just what to do but also what not to do!

Starting a freight business, shipping freight can be very rewarding and I enjoyed my years in this area of import and export and gave me a great understanding of the whole supply chain.

Take advantage and learn from my mistakes so you don’t suffer the same stress and financial losses that I did. You’ll have less grey hair than I do now at my age! 🙂

Start a freight business with the right knowledge and you’ll have every chance of great success.

How To Get Clients For Your Freight Forwarding Business

Knowing how to get clients for any business is the million dollar question. There’s no quick answer to that, it’s going to take time, energy, some grit and hard work. Below is a YouTube video where I discuss some of the methods that worked for me in my career and I’m sure are still very relevant today.

Export Documentation and Procedure Online Course For £349

ABTS® offer an online Export Documentation and Procedure course that will teach you the practical knowledge you need to to understand and to trade successfully and confidently whilst maximising your profits when trading internationally.

Alan Bracken has over 35 years of commercial experience in logistics. He skips all the theory you’ll never need to know about the supply chain but teaches you the practical side of how to move goods around the world, preempting issued, being proactive, not reactive.

We were voted Best Trade Education Provider in 2017 by Trade Finance Global and our course has been validated by the London Institute of Shipping and Transport.

Check out our reviews on TrustPilot to see just how our courses have benefited our students.

Export Documentation and Procedure

Upgraded Online Course Now Available For 2022

Export Documentation and Procedure

Our upgraded “Export Documentation and Procedure” course teaches you practical lessons you need to know to move your goods around the world. Developed by Alan Bracken, with over 35+ years of commercial experience in international trade.

Alan setup and built his own freight forwarder business which he went on to sell, so has extensive commercial experience in logistics with a deep understanding of export documentation.

He explains what can be complicated subjects, in easy-to-understand ways, teaching you to be proactive, no reactive, giving you excellent foundation knowledge of export procedure.

Course cost is just £349, enroll now.

As a foreign buyer, it can be extremely confusing when you want to import goods from a particular country. Knowing what countries require, how things have changed for the UK after leaving the European Union, whether you need an EORI number and whether or not you need an export license are all common questions.

To have a deep understanding of shipping documents, common export documents, export regulations, customs duties and customs declarations, it takes an extensive level of study to understand the entire process so in this blog, we’re just going to introduce the basics of how to export goods and give you as much correct information as we can in plain English.

We’re actually going to address the the following questions as we’re asked these the most often.

Common Export Documents (The Basics):

  1. What is a Bill of Lading?
    1. A Document of Title
    2. Evidence of the Contract of Carriage
    3. Negotiable or Non-Negotiable?
    4. What is Clean and Claused?
  2. What is a Certificates of Origin?
    1. Why is a Certificate of Origin Needed?
  3. What is a Clean Report of Findings?
  4. What is a Letter of Credit?
    1. What is UCP 600?

Common Export Documents – Watch On YouTube

This video explains the the same content as below for those that prefer to learn about common export documents and shipping documents by video:

Required Shipping Documents: Bills of Lading

We’ll start with a bit of trivia in that Bills of Lading are actually the oldest commercial document in the world dating back to the Venetian days. So there’s quite a bit of history in the first document that we’re going to discuss.

So What is a Bill of Lading?

Well, it’s one of the most important shipping documents as it’s a document of title. Whoever’s name is written on it, legally owns the specific goods in question. The owner of the container of goods is of course going to need to prove they own them when they arrive at the port of the destination country in order to collect them.

This is done very simply by showing the port authority that you are the person or you represent the company on the bill of lading.

How is One Created?

Let’s start with an example and assume in this case, you’re the seller of some goods and you need to ship them to a buyer who’s international. He tells your that he wants them shipped under CFR subject to Incoterm 2020.

This means that you as the seller or the shipper, will have to negotiate freight rates with either a freight forwarder or a shipping line directly and once a that’s done, the shipping line will nominate a vessel for your goods to sail on.

At this point, the shipping line will ask, “May I have your bill of lading instructions please?”. So of course, you as the shipper, will have to tell the freight forwarder what you want. So this is just one of many shipping documents that you’ll need to know and understand. The document is then created as per your instructions and it then becomes an instrument of payment.

The freight forwarder will ask for payment in exchange for the Bills of Lading, which of course you need for customs clearance.

It’s a Contract of Carriage

When shipping goods, many contracts are and shipping documents are created. For example, there can be a contract for insurance, a contract of sale, a contract with a local haulage company, a clearing agent to clear the goods through the customs authority or a contract for a letter of credit to name a few. Many contracts can be created within this one transaction or sale and export documents need to be produced.

One of those contracts is with a shipping line to ship the goods form one port to another. A bill of lading doubles up as the “contract of carriage” as the terms and condition of carriage will be on the it as well. Should there be any disputes with your freight forwarders, those terms and conditions will become a big part of resolving that issue.

Without getting into the details, these terms and conditions are usually standardised, meaning shipping lines more or less all use the same terms and conditions and they are usually based on the “Hague Visby” rules. You can research that if you want to know more.

They Can Be Negotiable

A bill of lading can be sold to a third party. For example, you’ve you’ve bought a tanker of crude oil and it sets sail to a refinery in your destination country but as it’s sailing, you get a call from an oil broker that wants to buy your tanker. You can sell it to them while it’s still on the water by transferring the bill of lading.

Another example of a negotiable bill of lading is through the use of a bank loan to pay for the goods. Let’s assume in this example, you’ve agreed a lone with your bank in order to pay for the goods. Your bank may insist that the bill of lading is made out to them, so if for some reason you don’t pay your loan back, they already own the goods and can auction them off. It reduces their risk and they already have all the financial information in order.

How do you make it negotiable? Very simply, to make it negotiable just add “To the order of:”. For example, “To the order of: Barclays Bank”.

When the goods arrive and the loan repayment is made to the bank, the bank then writes on it, “To the order of: Mr John Smith” or your name/company.


A bill of lading should always be issued as a “clean“, opposed to a “dirty” one.

What’s clean? It’s one that is NOT “Claused“.

A claused bill of lading in simple terms indicates the container or the goods inside it are damaged. For example, a twenty foot container arrives at the port of discharge and is examined. Containers are examined to make sure there is no damage to the container, as if there was, it suggests that the cargo inside has shifted and there’s a higher chance the goods could be damage.

I remember once this happened to me. I was shipping barrels of liquid potassium permanganate, big forty five gallon drums of it. Before it was put onboard the vessel, the loading crew noticed liquid leaking out of the container.

They opened the container and found one of the drums had burst. If that container would have been shipped in that state, it would have shipped with a clause, “Apparent damage to contents of container, leaking drums”.

This protects the shipping line from issues later, once they arrive in the port of destination and being blamed for the damage which had already occurred before they received the cargo.

So that’s the essence of it. It’s surrendered at port of discharge in order to receive the goods. No bill of lading, no goods.

As you can see, it’s an incredibly important document and should be treated with the upmost respect.

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Export Documentation: Certificate of Origin

We all have birth certificates and/or passports which are identity documents that state where we were born. A certificate of origin is the equivalent of a passport or birth certificate for the cargo. It states where the goods were born and is essential for customs clearance.

Why is a Certificate of Origin Needed?

Quite simply, a certificate of origin is needed in order gain customs clearance in the importing country. This is especially true if your importing goods from a “Preferential Trading” country.

A preferential trading country is a particular country that has an agreement with the importing country of reduced customs duties. For example import duties on a specific imported items from this country will be charged at 2%, instead as the usual 8%.

For example, Turkey has a preferential trade agreement with the European Union and the UK for specific goods. Customs duties for these goods are reduced but to gain customs clearance from the customs authorities, importing countries will require a certificate of origin to verify the export shipments originated in Turkey.

In order to take advantage of this, all countries require a certificate of origin in order to prove that the goods came from this preferential trading country which will allow the customs authorities to perform their customs clearance.

Where Do You Get a Certificate of Origin?

Certificates of Origin is a document issued your local Chamber of Commerce. You can buy a blank one and complete it and as you submit it to your Chamber, they will likely ask you to prove where your goods came from.

This is simple enough to do as showing one of the commercial invoices from the company you bought the goods from is sufficient to show where the goods originated.

This being just one of many shipping documents required but allows your freight forwarder to complete the customs declaration and concentrate on the other shipping documents.

What’s A Clean Report of Findings?

As an importer, it’s of course essential to know that you’ll receive what it is that you’ve paid for. a buyer may need to know this for especially big orders or larger goods such as construction equipment.

A “clean report of findings” can be issued to anyone as an individual or as a company.

There are several internationally known and recognised inspection agencies such as SGS, Cotecna and Bureau Veritas, who act as an independent third party and inspect goods for you before they leave the sellers premises.

As a buyers you can contact one of these inspection agencies and ask them to go to the premises of the seller and give them detailed information on how you want them to inspect your consignment before it leaves.

You can set your own criteria for the inspection, for example, if you were buying a large order of shoes, you may want them inspected to the ISO 9001 standard. Every sixth pair of shoes or a random selection of shoes should be taken and inspected. You get the idea.

These agencies will inspect anything and have experts in every field, from a vet to examine a horse, right through to construction equipment.

If the test is passed the document issued by the inspection agency is a “clean report of findings” and the you as the buyer will know that you’re getting exactly what you’re paying for and to the agreed specifications.

If they don’t pass, the document issued is a “non-negotiable report of findings” is issued and the export shipment won’t be shipped.

The buyer usually pays for this service and as a note, some countries insist that export consignments must include a clean report of findings.

Obviously this isn’t part of the required shipping documents by customs authorities for customs clearance but it’s very valuable to the foreign buyer ensuring that the export transaction with the seller goes smoothly and that the buyer is going to receive the goods to the standard they expect.

Letter of Credit

A letter of credit is a method of payment and can be used as payment for an export shipment. It’s a document where a bank guarantees payment. Sellers like to be paid with them because they’re paid by a bank so it’s a secure, guaranteed payment. When a seller is paid with one, it matters not to the seller if the buyer goes bankrupt and out of business, they’ll still be paid as it’s a bank that will pay them.

It is however and this is a very important and crucial point to note, it’s a CONDITIONAL guarantee. It guarantees that a bank will pay a sum of money, within a time frame, if the stipulated documents in the letter of credit are presented to the bank.

A letter of credit does not “live” forever, it has a time limit, so it’s born and it dies. So another very important point to understand and take note of is that it does expire.

If you have one and it expires on 21st August 2022, on 22nd August, it’s worthless. The bank will pay you between the date it’s issued and the date it expires IF the stipulated documents are correctly submitted.

For example, let’s say you receive a big order of £85,000 from a buyer but you’re not sure the buyer can pay you. You could ask for the terms of payment to be a”Documentary letter of credit”. This would conditionally guarantee your payment if you provide stipulated documents.

For this example, let’s assume you’ve been asked to supply:

  1. One full set of Bills of Lading made out to the order of “The Bank”
  2. Certificate of Origin in duplicate
  3. Insurance Certificate (Clause A)

The paying bank gives you a list of the documents they want to be presented, which on correct presentation, before the expiry date, they’ll pay you as the seller or beneficiary.

To add to this, there is a set of rules that must adhere to which are called UCP 600. This is another level which we won’t touch on in this blog but if you want to know more, please see our video below.

When it comes to letters of credit, precision is key. Present the stipulated documents, within the time frame, subject to the relevant rules in UCP 600.

Where To Learn More?

If you would like to learn more for free, head over to our letters of credit blog post which includes a YouTube video going into more detail.

They are certainly not easy and this is most certainly not enough knowledge for anyone to venture to use them. They are a complex document and I strongly, strongly advise you to understand exactly how they work before attempting to use one.

We have an online course dedicated to letters of credit and exactly how to handle them. See our Letter of Credit course syllabus for full details.

Export Documentation and Procedure Online Course For £349

ABTS® offer an online Export Documentation and Procedure course that will teach you the practical knowledge you need to to understand and to trade successfully and confidently whilst maximising your profits when trading internationally.

Learn how to handle customs authorities, export regulations, shipping documents, import procedures, bonded warehousing and much more.

Alan Bracken has over 35 years of commercial experience in logistics. He skips all the theory you’ll never need to know but teaches you the practical side of how to move goods around the world, preempting issued, being proactive, not reactive.

We were voted Best Trade Education Provider in 2017 by Trade Finance Global and our course has been validated by the London Institute of Shipping and Transport.

Check out our reviews on TrustPilot to see just how our courses have benefited our students.

Free Croner-i Trade Lite Account

Back in March 2021, I published YouTube video, going into some detail on “How To Start Your Own Freight Forwarding Business“, which I’ve posted above as you can see.

For those of you that watch it, you’ll know that I talk about Croner’s Reference Book for Exporters and what a great resource it was for me in my commercial days.

It had been many, many years since I used the book so as I searched for links to the book for several students to buy, I discovered the book has stopped being published.  Obviously this goes to show my age!

I contacted Croners and I’m sure you won’t be surprised to learn that several years ago, Croner’s moved from printed book form to online and now all information is available via their website.

Free “Trade Lite” Account For ABTS® Training Students

ABTS® Training has now partnered with Croner-i to offer a free “Trade Lite” account to all our users, which I certainly recommend checking out.

Click Here To Sign Up For Your Free Croner-i Trade Account.

Free access to:

  • Information on import export markets
  • Upcoming trade events
  • Toolkits
  • Ready-to-use ‘How To’ guides
  • News, feature articles and weekly email alerts

Sign Up Now

Become An Import Export Agent

New Online Course Now Available For 2022

Our new “Start Your Own Import Agency Business” course teaches you practical lessons you need to know as an agent. Developed by Alan Bracken, with over 35+ years of experience in international trade.

Trading as an agent himself for many years, Alan teaches you how to be a successful agent in the real-world. He explains how to control costs and maximise profitability as well as how to choose the best type of agency for you, how to negotiate and sell and move your products.

Course cost is just £399, enroll now.

When looking to become an import export agent, it’s sold to many as a quick way to make money without having to do much work. Link up buyers and sellers, negotiate a deal and get paid, this is how easy some think it is. The reality is somewhat different and I’m going to give you the whole picture. Here’s what we’re going to cover.

How To Become An Import Export Agent:

  1. Find A Product You Want To Represent
  2. Build a Range of Products
  3. Make Sure Your Product Knowledge is 100%
  4. Do Your Competitor Research
  5. Make Sure You’re Aware of Any Safety Regulations
  6. Establish What Territory You Want To Represent (Local, National or International)
  7. Understand Circumvention Clauses
  8. Make Sure You Get Samples
  9. Make Sure You Have Promotional Material
  10. Know What Commission Rate You Want Going Into Negotiations

Become an Import Export Agent – The Basics

The following video explains the basics of how to become a SUCCESSFULL import export agent with down to earth, real-world advice.

Alan Bracken addresses what you need to know if you’re thinking about becoming an export agent by setting realistic expectations. With over 35 years of experience in international trade, Alan gives his advice on what you need to know and consider before diving into setting up an agency:

  1. Should you setup as a limited company or self employed?
  2. How much time will you need to dedicated to your new business?
  3. Identify your start up costs.
  4. Identify your products
  5. The importance of market research
Before we get into our top 10 tips, let me give you a little heads up about the the reality of your new import export business.

Two years ago I was in Dubai  lecturing at a local college and presenting our own import export training course at seminars and to various local trading companies.

I noticed in the hotel lobby, an advertisement for a course entitled “Become a Successful Import Export Agent”.  The title caught my attention and out of professional curiosity I purchased a ticket for $15.00.  The course was a half day course, from 9 am t to 2 PM with a 15 minute coffee break.

There were four very smartly dressed people, presenting the meeting and we were told in rapid succession by all four presenters there was a fortune to be made as an import export agent, with little or no financial investment and minimum knowledge of International trade. We were then told that once we enrolled in the course, we were on our way to success.  As one speaker put it “ The sooner you start the sooner you’ll be rich”.

Each of the four presenters in turn, told us that they were originally working dead end jobs making money for their boss, living the usual rat race, living week to week, hand to mouth.

Import Export Agents Needed

By becoming import export agents, this gave them  the financial freedom and lifestyle independence to do whatever they wanted.  All that was missing was the photos of each of them with a Ferrari.  As you may imagine, this went down very well with most of the paying audience.  Who doesn’t love the idea of making great money with no financial investment, little risk and you don’t have to study!

We were told it was so straight forward, a child could do it. All that was involved was find a buyer and seller, introduce them to each other and “hey presto” we get a big fat commission for little or no work.  For every buyer, there’s a seller and our job is just to match them and then wait for a chunk of money to hit our bank account.  Lovely!

An Import Export Agent Doesn’t Need Money

However…even though there was little to zero financial outlay, virtually no risk to setup our new wonder business there was one small initial outlay that we would have to pay up for.  You’ve probably guessed it, $800 for their course that would teach us the golden secrets of how to get rich quick as an import export agent.

To prove just how simple this process was, we were given a photo copied sheet of paper with a list of names who were apparently “buyers”, of course with all their contact details blanked out, with a corresponding list of sellers and the products they have to sell but again with their contact details omitted.

Once we paid the $800 fee, we would get the full list of names and addresses and even an example letter that we can copy introducing our buyers to our sellers. What an offer, all the work is done for us, we just have to copy a few letters and send them off and we should be in business, ready for our bank accounts to fill up.

I had visions of myself as a dragon on Dragon’s Den, with stacks of cash on my kitchen table as I eat my breakfast each morning, contemplating what I’m going to buy next.

The final clincher was that by paying out our hard earned $800, we would also receive a fabulous “HOT TIPS” guide! Although we were not enlightened as to what any of these hot tips may be.

The audience at this point was not a rush to join up but these four presenters worked their charm for the next couple of hours or so, telling us that it was the best investment they would ever make and if they didn’t do it today, they will miss out forever.

Can An Import Export Agent Be Cut Out?

In an effort to try and shed some light on how this get rich quick scheme may not be quite so easy, I offered a question, “How can I be sure the buyer and seller don’t just cut me out after the first deal and deal directly with one and other?”  In a dismissive tone, the presenter replied, “This very seldom happens, so don’t worry”, then moved on to the next question.  Fantastic, let’s pay the $800 then as it hardly ever happens.

At this point after several hours of being told how easy life as an import export agent is and the riches it will produce, the sentiment of the audience had changed and they were on board. Who doesn’t love the idea of making an “easy buck” as they say.

At 2pm the presenters let us know that this was their last seminar in Dubai for another year so, just for us, they would make a special offer of $600.00 to enroll in this super duper life changing course.  I managed to leave the room soon after 2pm but as I left there was a line of people signing  up for the “special offer”, eagerly anticipating all of the profit they were about to make.

Import Export Agent Training – Realistic Expectations and Honesty

I felt for those people queuing up to make their fortune but first having to spend $600 of their hard earned money.  Not because they’re signing up to the course itself or because being an import export agent can’t bring you excellent profits but because their expectations had been mismanaged.

If you want to become an import export agent, it will take some financial investment, it will take time and effort to build relationships with buyers and sellers, you’ll need to learn to negotiate with them, you’ll have to study and understand the implications of acting as a stockist or commission agent and you absolutely must understand in its totality how to trade on an International level.

You will encounter problems, as you will with any business and you must know how to solve these problems quickly and efficiently. You must know where your risks lie and once you grasp these concepts, then you can run a profitable business as an import export agent with a healthy profit margin.

Spending money on a course that promises you quick riches is probably never going to be a good thing. Sure, spend money on courses and educate yourself but also have realistic expectations.  Any business you setup is going to take some elbow grease, some investment, study and determination.  There is no way to get rich quickly or easily…or we’d all be doing it.

By the way, the correct answer to stopping a buyer and a seller from cutting you out as the commission agent is to include a “circumvention clause” in your contract, which is a fundamental clause in this sort of situation.

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Become An Import Export Agent The Right Way

Firstly, becoming a successful import export agent is what we need to be focused on and for this become a reality, like anything in life, it’s going to take some hard work, time and dedication.  As we all know, any new career or skill that we want to learn is always going to take effort and some form of dedication.  Nothing worth pursuing comes easy or for free.  It’s unfortunately not as simple as working from home for a few hours each evening.

Product knowledge is paramount, hard work and understanding international trade are all key parts of making a success of becoming an import export agent. Honing your negotiation skills, understanding international methods of payments and an understanding of international contract law are very wise.

Two Types of Import Agent

The good news is, there’s always companies looking for import export agents.  Below are the import export agent job description for the two types of role you can opt for. You’ll have to decide which one is appropriate for you with the products that you decide to represent.

Commission Agent

A commission agent introduces a buyer to a seller and receives a commission for sealing the deal and continues to receive a commission for any future sales from that same deal.  As a commission agent you’ll be dealing with buyers who want the product but likely don’t have much knowledge of international trade, which Incoterm to purchase under, best method of payment nor custom clearance procedures.  This is where your knowledge becomes invaluable and you’ll be able to hold their hand through to whole import export process and this is where you earn your import export agent commission with confidence, professionalism and the best possible terms for you.

Stockist Agent

As a stockist agent, you will actually buy the goods or products yourself, keep and store those goods, find buyers yourself and sell them to anyone you want.  You could sell regionally, nationally or internationally.  To become a stockist agent you must have an in depth understanding of international trade and the entire import export process from start to finish.

As an example, we had a student who completed our online course and has begun importing very modern home security cameras with motion detectors that record to the cloud.  These cameras are imported from Hong Kong where they are manufactured and being sold online and to various retail shops throughout the UK.  This young entrepreneur now has a small team of sales reps that pick up stock and sell throughout the UK for him once a month.

10 Golden Tips To Become An Import Export Agent

So, here’s our top 10 tips to becoming a successful import export agent:

Step 1: Search For A Product You Want To Represent

Establishing what you want to sell, finding a supplier, manufacturer or a source of products is obviously where you need to start in order to become  broker for them.

One effective method of sourcing is by contacting the embassy of the country you wish to source from.  For example, if you are sourcing products in China, contact the commercial section of the Chinese Embassy in your country and ask for a list of Chinese manufacturers and suppliers of the product you want to represent.  This is an effective way to source products internationally.

Another effective way to source products is to contact overseas trade fairs and ask for a list of companies exhibiting at the trade fair.  For example, if you were looking to become an agent for children’s clothing, try Google’ing “children’s clothing trade fairs in China”.  You’ll be able to put together a list of dates, locations and contacts.  If possible, visit the trade fairs that you can and get talking to people and start to build a network.

If you can’t attend the trade fairs, contact the organiser and ask for a contact a list of all exhibitors which they are usually more than willing to give you.  Then you have a pretty comprehensive list of manufacturers you can contact and add to your network.

I have personally used the methods over the years and they have thankfully brought me some great results.

Step 2:  A Range of Products

Develop a range of products from either your chosen supplier or consider finding a range products that fit well together, from multiple suppliers. The big advantage to this strategy is when you are in front of a potential client, pitching your main product, it can convince them to buy from you if you can back it up with a range as they may see more opportunity to sell the range, therefore earn more profit.  The other advantage is, should your potential client not be interested in your main product, you may find that they are interested in another in your range.  By having a range of products, you’re increasing your chances of a sale and expanding your sales network.

Step 3:  Product Knowledge

Do you have sufficient knowledge of your product? You’re not necessarily expected to know every single detail about your products and be able to answer every question but you do need to have a good understanding of the product, how it’s manufactured, cost of production, wholesale price, retail price, profit margins etc.

You must be able to pitch your product with confidence and a depth of knowledge. If you then don’t know an answer to a specific question, you can always reply “I’m not 100% sure of the answer, so I’d like to check that and come back to you.”  You can then make sure to get the correct answer and answer the question in a follow up email the next day, maintaining contact and dialogue.

However, this only works if you’re unsure of the odd question or two.  You won’t be able to give this answer for all the questions, or you’ll look completely unqualified and make your products look weak.

Establish what product education and knowledge you’re going to receive.  Training videos, webinars, video calls etc. are all great ways to get yourself up to speed.

Step 4. Research, Research, Research.

Know your market – this is so important.

  • Who else is importing and wholesaling your product(s)?
  • What’s the wholesale price of your competitors?
  • Who’s retailing your product(s)?
  • What is your product(s) retail price?
  • What can you do to make your pitch better or different from your competitors?
  • How can you make your service better that your competitors?

With this basic information, as yourself, “can I compete as a stockist or commission agent on price and delivery?”.

Run your numbers, do the numbers add up and is there a profit margin that you can work with?

Find your niche, find something that you can specialise in, become the leader, the expert, in that area and build a solid foundation from here.

Step 5:  Safety Regulations

This is an important step that many overlook and can be very costly if not considered.  Does your products comply with health and safety regulations in the country that you’re selling?

Imagine finding your products, pitching to clients, negotiating a deal and importing your products to find out they’re not compatible with health and safety regulations, can’t be sold and are held up at customs. This will likely add substantial cost and untold stress and there’s a decent chance that your profits will be wiped out or worse, you’ll make a loss on the deal.

Do not neglect this step, it’s not worth it.

Step 6:  Mark Your Territory

Establish what territory you want to represent, perhaps become a national import agent UK or maybe International. It depends on what your goals are, what capital you have and to a large extent, how big your network is.

If you’re starting out, have limited capital and a small network, just work within your region. As you grow in all aspects you could start to look at a national network.  Take it a step at a time but you may be surprised how fast your network grows.

Step 7: Circumvention Clause

Make sure a circumvention clause is included in your contract, which is a legal means of stopping the buyer or seller excluding you from future sales as the commission agent.

Step 8: Samples

You’ll likely need samples to promote and demo in your pitches and meetings.  It’s much harder to sell if you don’t have a working version of your products to demo.  So, establish if your supplier will provide samples to you free of charge, or at what cost.

Step 9:  Promotion Material

What promotional material, if any, does your supplier have?  Product images that can be emailed to you so you can add them to your website and advertise on Facebook.  Be sure these images are clear, professional and represent the product and your brand well.

Videos are an effective way to show your product if professionally produced so find out if there are any available to you.

Product brochures are good to leave with potential clients after a meeting, with a breakdown of costs, prices and profit margins.

Step 10:  Your Commission

Lastly and perhaps most importantly, what rate of commission will you negotiate? Your commission obviously has to make it worthwhile to you so it’s important that you know all your costs and what your bottom line is.  This is where knowing how to export is so important as if you get this part wrong, it can obliterate your profit margin.

Import Export Training Course For £399

Learn how to become a successful import export agent by enrolling in our brand new course.  Check out the course syllabus, a course that streamlines what you’ll need to know to be successful using practical, real-world knowledge, for just £399.

Our courses teach you the practical knowledge you’ll need to know to trade successfully, confidently whilst maximising your profits. Taught by Alan Bracken, with 35+ years of commercial experience in logistics, he skips all the theory you’ll never need to know but teaches you the practical side of how to move your goods around the world.

We were voted Best Trade Education Provider in 2017 by Trade Finance Global and our course has been validated by the London Institute of Shipping and Transport.

Check out our reviews on TrustPilot to see just how our courses have benefited our students.

Start Wine-ing And Get Exporting

Importing and exporting doesn’t have to be rocket science. Sometimes a simple idea can kick-off a successful career and doesn’t need to be over complicated.

In November 2017 a young lady, 23 years of age, enrolled on an online import export training course, which she completed and had  confidently learned how to export.

To Or From China?  Research Is Key

This young entrepreneur had been looking at China, as many do, to import goods to sell to Europe and on doing more and more research, came across an idea where she saw a gap in the market.  This gap however, was in the reverse direction, rather than import from China, she believed that exporting to China was more advantageous, in particular, exporting Spanish wine to China.

A simple product, a simple idea and something that can be relatively easily filled. Sometimes we don’t have to find some far out there, brand new product that no one has ever seen.  Keeping an open mind and let your research tell you what’s needed. Then trust your research and your gut feeling!

With alcohol sales increasing significantly year on year and China’s middle class expanding, finer wines are more in demand. Also the explosion of Chinese tourism across the globe means that Chinese are travelling further abroad and finding a taste for quality wine and spirits.

With further research, our entrepreneur selected 3 wine producers in Spain and was grounded in negotiation techniques, therefore able to negotiate a solid and successful contract with them.  The wine supplier as you may imagine, was  only too happy to help her penetrate the Chinese wine market and was very helpful.

Stockist Agents

In China, after talks with several potential stockist agents, she selected one that fit her personal criteria and potential future expansion plans.

The first deal was agreed and signed and the stockists agents terms of delivery were CFR  Chinese Port subject to Incoterms 2010.  Our entrepreneur was familiar with and understood these Incoterms and able to make the necessary arrangements for the delivery.

She promptly contacted a freight forwarder in the UK and negotiated a freight rate for collection from the Spanish wine supplier and delivery to the specified Chinese port.  Her knowledge of Incoterms 2010 and the research she had conducted ensured she accepted a fair price for this delivery therefore maximising her profits.

Method Of Payment

The final part of the contract was to negotiate with her Spanish wine supplier,  a 60 day payment against a Bill of Exchange, availed by her bank and a 30 day bill of exchange, availed with her stockist agent thus enhancing her cash flow, giving plenty of time to receive funds from her stockist agent and make the payment to the Spanish vineyard.

The initial trial order was for 4 pallets of wine by LCL service, with the bills of lading to be produced and forwarded to the stockist agent, together with other commercial documents as a Cash against Documents Transaction.

Bring in a Range

After this successful shipment, the first consignment was sold to one outlet by the selected Chinese stockist agent and a partnership has now been agreed and contracted to jointly finance and purchase a Full Container Load (FCL) of Spanish wine.

With the potential to supply a range of products, negotiations are underway to bring in more related products to maximise this business relationship as joint profit margins.

 Lesson Learned

You can turn a relatively simple idea into reality if you follow some simple rules:

  1. Identify the product(s) you wish to buy or sell through solid research.
  2. Research the market you intend to sell to.
  3. Research and find several suppliers. Just one is risky as if there are any issues or problems, you may find yourself with no stock to sell.
  4. Negotiate commercially and legally sound contracts.

No business and making profit, doesn’t come easy.  Be prepared to put in the hard work, stay focused and keep yourself driven. Once you’ve navigated your first deal and made your first delivery, you’ll continue to learn and it will get a little easier each time.

Above all don’t “wing it” get trained in the practical aspects of importing and exporting or the risks of losing money are significantly higher.

Photo by Terry Vlisidis on Unsplash