Today, businesses have unlimited scope for growth and market potential. Of the various avenues that bring multiple opportunities to entrepreneurs, one of the most attractive sectors today is the import and export market. The present year is also witnessing substantial growth in the commercial prospects of the same with overall imports in April-February being estimated to be USD 683.01 Billion in 2021-22. This also shows us an estimated positive growth of 51.51% as compared to the same period in 2020-2021.
As impressive as these numbers are, it is highly likely that the figures will only grow in the upcoming financial year. To take advantage of this upward curve, many business enthusiasts and seasoned entrepreneurs are looking to expand their work into import-export ventures. If you’re new to the industry and wish to do the same, finding reliable resources may be a task. The good news is, we’ve done the work so you don’t have to! Here are the steps that can improve your initial profits while starting an import-export business.
1. Have your basics in check:
The first step is to get your business specifics in order. This means that you collect all the required documentation and process them by the designated authorities. As an importer and exporter, having a license is one of the primary prerequisites, so apply for it well in advance to avoid any delays and hold-ups. If you haven’t registered your business yet, that’s the next step to take by approaching your state or regional commerce department. Once your business is registered, you can come up with a business plan and pitch to proceed with the operations without wasting capital.
2. Choose what you wish to import or export:
It is easy to start an import and export business. But if you haven’t decided upon what you wish to trade, you won’t be able to gain the profits that you want. There are several categories of goods and products that can be imported and exported, which may be subject to unique permissions. Goods like wine, alcohol, artifacts and restricted or scheduled products may have certain restrictions and licensing that you need to have in place before trading. Make sure that you zero down on your category as soon as you complete market research to have the best benefits based on your location and jurisdiction.
3. Reach out to good suppliers:
One of the most essential aspects of getting your import and export business running is linking with the right suppliers. There are huge margins involved when it comes to importing products, and if you wish to conduct long-term business in this industry, allying with the right suppliers can be a game-changer. Make sure that you discuss the specifics of your shipments, frequency, terms, and conditions based on the base tariff, discounts, and paperwork involved (including insurance). Also having multiple suppliers can help you mitigate the windfall on the occasion of a shortage.
4. Think about custom duty:
Import and export businesses are subject to international and cross-border customs duties. However, you can receive the benefit of duty drawback with the help of a clear understanding of your limits. Based on what products you choose to import or export, the value of your trade can be charged duty, increasing its saleable price. Since this may put you at a disadvantage in the market through hiked prices, take the help of highly specialized duty drawback experts. They will be able to assist you in claiming the duty paid by using the relaxations provided by the governing bodies.
5. Pay attention to product pricing:
As mentioned above, competitive pricing becomes a huge factor when it comes to selling imported and exported goods. However, the duties and taxes attached to it may change the prices, challenging you to rate them accordingly. Take a detailed survey from the market standards and price your products accordingly. A common strategy used is to provide competitive prices on fast-moving commodities while banking on rare goods to cover profits. This step will also help you figure out who your ideal customers are.
6. Figure out the logistics:
The last step involved is to create the most efficient and economical channel for logistics. Since shipping time and speeds vary, it is an entrepreneur’s responsibility to figure out the quickest delivery time at the cheapest possible prices. Reach out to renowned shippers and logistics experts and request a quotation based on your order volume.
As you can see in the points covered above, preparation is more than half of the work when it comes to expanding any business. However, when it comes to import-export, there is a lot more work involved behind the scenes. We hope they help you optimize your operations and streamline your income with ease.