Importing/Exporting

[gh05]

Does anyone know much about how hard it is to make money from importing/exporting products? I've heard the start up costs are low but would like to hear from someone who knows a bit more.

Thanks.

edit - I don't currently own a company or have any product to import/export.

 

[ADS-MARKETING]

No business is easy.

Your profit margins will depend on what product you are either importing or exporting.

 

[gh05]

No business is easy.

Yes, I know - I worded my question wrongly. I'm new to business and just at the stage of educating myself but would love to do something which is exciting, has potential to make me money if I work hard and also can help me develop as a person too. I read a guide recently (spam filter wont let me post link yet - not enough posts - see bottom of my post) and it makes it sound quite an attractive industry but I know it can't be easy.

Your profit margins will depend on what product you are either importing or exporting.

That's the thing though - besides learning about the organisational side of things, how do you find new products and know which ones will give you good margins/sell well. I'm going travelling around the world for four months very soon and this might be the best opportunity I have to learn about an international business.

Do you (or anyone else) have any experience in this area?

Thanks for the reply.

http : //w ww. howtoadvice.com /Import-this

 

[fz04]

from my experience the most successful business people are importers

its very profitable and you can make alot of money very quickly

but its not easy

most importers start off as small businesses/sole traders they see a gap in the market for something and start off by importing small quantities of that item and then the business builds from there

the only problem about importing is that to be really successful you need to have a cycle set up, where you have built up a trust worthy customer base, once your goods arrive in the uk they go straight out to customers

and usually your customers will pay you 30/60 days later

its a big credit cycle

but the rewards are huge for a successful importer

 

[gh05]

from my experience the most successful business people are importers

its very profitable and you can make alot of money very quickly

but its not easy

most importers start off as small businesses/sole traders they see a gap in the market for something and start off by importing small quantities of that item and then the business builds from there

the only problem about importing is that to be really successful you need to have a cycle set up, where you have built up a trust worthy customer base, once your goods arrive in the uk they go straight out to customers

and usually your customers will pay you 30/60 days later

its a big credit cycle

but the rewards are huge for a successful importer

fz, Have you done any importing/exporting yourself?

Can you recommend any good reading on the subject? I've come across a lot of rubbish from the brief searching I've done so far (people trying to sell import/export courses etc). The how to guide I posted was a good read but doesn't go into much depth on how to get started and I'm a bit confused about the different terminology/players involved (e.g. if I were to start doing this would it make me an import agent???)

When I was searching for info on import/export agents, Google autocomplete came up with 'import export agent jobs' and it made me wonder how many big companies who know it all inside out are already doing this and why are the salaries for jobs in this field relatively low if there are big opportunities out there?

Thanks.

 

[fz04]

all you need to do is find the right stuff to sell in the uk which would be the importing side and to sell abroad if you want to do that which would be the exporting side

you dont have to worry about all the technical issues and complications surrounding the actual importing and exporting because that is what freight forwarders do

once you find the right stuff to import or export you just phone a freight forwarder who will tell you how much it will cost to bring the stuff over or export to another country

the main costs you will have are as follows:

1) item cost this what you are paying the supplier in the other country

2) freight costs, the cost to send the stuff to the uk

3) vat/duties payable when the stuff arrives in the uk plus the costs to get the stuff delivered from the port to your premises/customers

these are your overheads, when you know what these are you have a final cost of the product and then work on your margins



sorry i forgot to mention that yes i do have experience with importing and a little with exporting too

 

[gh05]

all you need to do is find the right stuff to sell in the uk which would be the importing side and to sell abroad if you want to do that which would be the exporting side

you dont have to worry about all the technical issues and complications surrounding the actual importing and exporting because that is what freight forwarders do

once you find the right stuff to import or export you just phone a freight forwarder who will tell you how much it will cost to bring the stuff over or export to another country

the main costs you will have are as follows:

1) item cost this what you are paying the supplier in the other country

2) freight costs, the cost to send the stuff to the uk

3) vat/duties payable when the stuff arrives in the uk plus the costs to get the stuff delivered from the port to your premises/customers

these are your overheads, when you know what these are you have a final cost of the product and then work on your margins



sorry i forgot to mention that yes i do have experience with importing and a little with exporting too

great, cheers.

So, are you classed as an 'agent'? As in, is your money made in commission from all sales made of the product by the company you are importing to?

Do you know of any good reading on the subject where I can learn how to experiment with this? Obviously I know that choosing a product has to be my decision and nobody is going to give away secrets on what will make money but I'd like to have an idea about how to get things going/make contacts/legal obligations etc.

Also, if you don't mind answering, if you were in my shoes - i.e. going travelling to various counties around the world (US/Fiji/NZ/Aus/S.E.Asia) and wanted to get into this business - where would you focus your efforts on first?

Thanks

 

[fz04]

your not an agent!

what you want to be is the importer, you do not make a commision you make a profit

lets take shoes for an example, you buy shoes for $1 from country x and you sell them in the uk to customers for $2

so you are making a 100% profit margin

a buying agent on the otherhand and which i have seen many on this website source goods for customers in the uk for a percentage

so just say you have a buying agent in china they offer their services for a 5% commision

so if they sourced $100 goods for you, they would charge you $105

you dont need to read anything and i wouldnt suggest it, just experiment and the best way to do that would be to simply buy something from abroad and ask them to ship it over to you and in this small example you will learn all the basics first hand of what importing is about

you will learn how to negotiate a price and make sure you negotiate on the price even if you do not get a discount

you will learn how much the freight/delivery costs and how to work with a freight forwarder

you will learn what the procedures are for releasing the goods and arranging a delivery in the uk once they arrive here

you can read 100 books but they are not going to teach you anything about importing, you have to do it to learn it

firstly about your trip i would say enjoy it, secondly before you go, try and understand which countries specialise in what products

for example when you go in to your local supermarket or any retail store just remember 99% of everything you see is imported from abroad

the main thing is contacts, when you go abroad see if you can visit some wholesalers or even factories where items are produced, make sure your smart be polite and tell them your from the uk and on a business trip working for a company and looking to source products

ask them about prices, item quality, can they guarantee providing orders to time scales take pictures of the items, swap details get an email address where they can send you pictures of latest products etc

the first place i would concentrate would be asia, at the moment it is the manufacturing exporting hub of the world and they are very reliable people to do business with

you could start just by buying a couple of hundred pounds worth of stuff just as a try out/samples just to get a feel of everything you dont have to begin by importing thousands of pounds worth of stuff

 

[gh05]

fz, thanks again for such good advice. Am definitely going to at least experiment with this. Have already started some research on what Thailand, Malaysia, Singapore etc specialise in as these are places I will be going.

I get what you're saying now. The guide I posted seemed to be all about how to make your profits via commission but it does make a lot more sense to me just to sell it on and take all profits.

I just have another couple of questions if you get any chance to reply. That should then be it for a while.

- How important is it to meet people face to face? As in, is travel a big part of the job or can the initial contact be done over the net/phone? I'm in Asia for between 6-8 weeks and while I do want to enjoy the experience I would also like to be productive. I probably wont have the money to travel again for a while which is my reason for asking.

- Are trade fairs worth it or is going directly to wholesalers preferable?

- When you sell your product over here...would you generally sell to it to other companies or directly to the customer? As you recommend...it's best to do this while in employment to start with but would selling to customers be too time consuming or manageable while just experimenting?

I know this one could be a thread of its own so don't worry if you haven't got time as I'll just read up on it elsewhere - When experimenting (i.e. buying few hundred £ worth) and selling it on (either to customer directly/company), at what point do you register yourself as having a business? As I said, I have no previous experience with setting one up so don't know a great deal about what my obligations would be.

Thanks

 

[fz04]

hi gh,

you can do everything over the net and phone and the asian businesses are usually very reliable to deal with, they just want payment you just want the goods, for a rough idea of the types of companies you will be dealing with just google ali baba and have a look through the different companies

but saying that there is nothing which beats face to face to contact, and if you are going over then i would say definately go out there and meet the people

learn a bit of their language they will really appreciate it, and in asia especially learn a few customs like showing respect to the elderly and stuff like that

most of all give them your details and get details and email addresses off them you might have to hire an interpretor out there as most people in that region of the world can not speak english

i would definately recommend trade fares, go to trade fares go to wholesalers and try and even get to the factories

in terms of selling the stuff this is what you want to aspire to

start off by making a catalogue of items you think you can get at a very competitive price and sell

by customers i mean other companies and businesses, your customers will not be people buying one thing at a time such as the general public, you want to target the retailers and the suppliers to the retailers who are wholesalers and even supermarkets and large retail operations

these guys will be placing orders with you for hundreds if not thousands of items at a time, and you will not be making a big profit margin on one item, you will be making a very small margin on one item but because you are selling thousands at a time that small margin turns out to be big big profit due to the numbers you are selling

but start off small, import small quantities, make a brilliant catalogue of items, go around to other companies and pitch them your stuff, once your at your at a stage where you have guaranteed orders and money coming in you can think about getting a small warehouse and so on

when your selling stuff the most important factors are quality, being able to deliver to a time frame and price, if you can offer all three to a company why will they not buy the items your selling

once you set up a business i think you can have 3 months in which to notify hmrc this is if you want to be classified as a sole trader

there is no big obligations in this you just have to fill out a tax return at the end of the year which isnt difficult to do for someone who is good with figures

or you could set up a company which is also straight forward

one of the advantatges of setting up a company is that the company is liable for the business if anything should go wrong where as being a sole trader you yourself are liable

and secondly many people go for companies because you can pay lower tax

if you have any other questions just ask

 

[gh05]

Big thanks Fz, You've just saved me hours and hours of blind searching in that one post. I'm travelling tomorrow so wouldn't have had time to figure it out before I go. Really appreciate it.

I've had a look at the AliBaba site and it looks really useful.

One question that springs to mind though is this:

Given that such trade sites exist, why would my 'would be customers' buy from me when they can just visit these sites themselves and import in? For me to make a profit then I must sell to them at a price where they can also then sell on to consumers and make a decent profit themselves.

Given the costs which I already have such as time, international calls, production and distribution of magazines, storage (obviously once past the experimentation stage), I would surely have to sell at a very good margin for it to be profitable.

I'm not doubting the ability to make money with this but just trying to have a healthy scepticism as I've been naive before when looking at opportunities.

I've just sat with my partner and she's pointed out products which she believes would sell for a good margin (I have no idea as it's female stuff!) to consumers but obviously that would be a lot less to any wholesaler.

Another thing, am I right to say that it's best for your magazine to focus on a particular product area rather than mixed?

Thanks a lot. If I don't reply to anything then it's because I may be away from the internet for a few days but I am finding this very interesting and useful.

 

[fz04]

hi gh

well its like this why does someone go to the local corner shop and pay 70p for a pint of milk or £1.50 for a loaf of bread instead of going to the local supermarket and paying £0.45p for milk and £1 for a loaf and the simple answer is convenience

importing is not for everyone alot of the ratailers and wholesalers are just happy buying from importers to sell on and they still make good profits

alot of the retailers and wholesalers dont even do anything, the importers deliver stock right to their door

they dont want the actual headache of importing

on another thread one of the members talks about the programme around the world in 80 trades if you can get to see a few episodes from that it will really be a good insight in to what importing is about and the profit to be made

im not saying its easy or a piece of cake its actually very stressful but if you are willing to put in the hard work and have the drive and enthusiasm you can make it work, i know many importers who are very successful they are hard workers and shrewd businessmen

about profit margins, you dont need to make big margins you just need regular orders from good customers, let me give you an example

you think a 0.50p margin is nothing right, you want be making at least £10

so you price £10 on your base costs and you will get buyers for maybe 100 shoes so you have made

100 x £10 = £1000 profit

now lets say instead of £10 you add £0.50p to your base costs, because by adding only £0.50p to your base costs your item is now the cheapest by miles in the whole of the uk, your phone starts ringing like crazy for orders in a matter of days you have so many orders you dont know what to do

if you have 10 000 orders in one week you just made

0.50 x 10 0000 = £5000 profit

the figures im giving are just an example and in real margins vary for items and fields but its just an example to show how importers make profits

they dont deal with one or two items to the public they provide big orders to big customers

Big thanks Fz, You've just saved me hours and hours of blind searching in that one post.

dont mention it, im glad to be able to help, and if you need to know anything else just ask

 

[fz04]

sorry i forgot to mention,

yes you are right its best to make catalogues with similar products, but now a days you can have everything on a disk you dont even need to make a physical print

you can make as many catalogues as you want with as many product types you think would sell well

you can meet a customer open your laptop and go through products, prices, quality everything like that

worst comes to worst, import a few hundred pound worth of stuff, give it a try see if its your kind of thing, if not you will still be able your stuff to get your original investment back and have gained experience in international trade

 

[samuel zhao]

make a decision and just do it!

 

[fz04]

hi samuel

i have looked at your website and it looks very good can you supply promotional gifts like lighter pen t shirt bottle opener with company logo

make a decision and just do it!

 

[Alistair86]

Hi there gh and fz,

This is the first post I have read on this forum, and I found it very informative.

I am thinking of going to China as soon as I have enough funds, and I intend to buy goods for around £1k, to test the waters. I absoloutely agree with u fz, in that actually placing orders, and getting a first hand experience of what the costs, and the procedures involved are. I think of it as a checklist, and once this checklist is in place, then it will hopefully give an importer the confidence and peace of mind to place larger orders, and also to have a true value of what the product is actually costing.

 

[[email protected]]

sorry i forgot to mention,

yes you are right its best to make catalogues with similar products, but now a days you can have everything on a disk you dont even need to make a physical print

you can make as many catalogues as you want with as many product types you think would sell well

you can meet a customer open your laptop and go through products, prices, quality everything like that

worst comes to worst, import a few hundred pound worth of stuff, give it a try see if its your kind of thing, if not you will still be able your stuff to get your original investment back and have gained experience in international trade

hi, seems like you have experience of importing from China, I am about to take the plunge myself, I have been quoted by a few suppliers, order value around 2K UKP (delivery via sea freight), I was planning to pay by L/C until I saw the bank charges involved (about £150), any suggestions on payment terms for first order, I don't particularly want to send 2k to some scammer in his back bedroom!
thanks, Neil

 

[fz04]

hi

do you know the weight of the shipment and is it large items or just small items

 

[[email protected]]

Hi, it's around 4 ton

 

[[email protected]]

and probably about 5-8 pallets/crates

 

[Wavecrest Ltd]

Don't know if it's been mentioned on this thread already but if you are having goods shipped by sea from China, the golden rule is buy on FOB terms only.

If you allow your supplier to arrange the shipping themselves you will end up paying very high port charges when the goods land in the UK.

Glen

 

[[email protected]]

yes, would be FOB and will be using a freight forwarder (will get a quote off you once I have agreed terms with supplier), I just need to find payment method/terms that will suit me and the supplier-most seem to want t/t

 

[fz04]

im guessing its going to be sent in a part container

which will be a headache from alot of angles

as the previous poster said it is best to send it FOB which for a first time order is another can of worms because under FOB as soon as your stuffs been loaded on the ship your supplier is free from any come backs

it might be best to find a sourcing agent to handle all this for you

if you send a pm to kwilding he has a few contacts up in china, if you use them at least you will have peace of mind that your not going to be conned

ill just run down what type of costs your looking at:

£2000 for your stuff

freight costs, which will depend on how you ship the stuff over

FOB this will be a costlier option best to ask your supplier how much for FOB

Prepaid this might even be offered free but once your stuff lands in the UK you could be paying £700 - £800 for freight

You will also have to pay VAT + Duty

And also charges for having the stuff released from port and also delivery to where you want it delivered in the UK

I think the L/C cost will be the least thing you have to worry about

But for a first order even an L/C can be risky because it doesnt give guarantee of receiving goods

What might be your best bet is to look for a freight forwarder in the UK who has an office/links in China

And ask them how much they are going to charge for an all inclusive service to have to stuff picked up and delivered to the UK and ask them if they can arrange with the supplier to even pay for the cost of goods once it reaches you in the UK

 

[Wavecrest Ltd]

Coming back on some points raised previously. Whoever arranges the shipping, there is no guarantee of quality of the product.

I would ask for samples to be sent before you place your order so that you can check QC. You will probably have to pay for the samples but it is a worthwhile exercise.

With regard to payment arrangements, it is quite common for suppliers to request payment by TT especially for first orders.

Try and negotiate a stage payment - e.g. 30% in advance and the balance payable when goods are shipped.

Why not ask the supplier if they sell to anyone else in the UK already that you could approach for a reference?

Glen

 

[[email protected]]

FOB this will be a costlier option best to ask your supplier how much for FOB

I though FOB and then me sorting delivery via a freight forwarder would be the most cost effective option?

 

[[email protected]]

Coming back on some points raised previously. Whoever arranges the shipping, there is no guarantee of quality of the product.

I would ask for samples to be sent before you place your order so that you can check QC. You will probably have to pay for the samples but it is a worthwhile exercise.

With regard to payment arrangements, it is quite common for suppliers to request payment by TT especially for first orders.

Try and negotiate a stage payment - e.g. 30% in advance and the balance payable when goods are shipped.

Why not ask the supplier if they sell to anyone else in the UK already that you could approach for a reference?

Glen

yes I was thinking of something similar, I guess proof of shipping would be the Bill of Lading? Ideally I would like to pay 30% deposit the remainder once the goods have landed here and I can check quality but I doubt any supplier will accept this (I wouldn't!) Does the freight forwarder get a copy of the Bill of Lading to forward onto me so I would know when to pay the remainder?

 

[Wavecrest Ltd]

I though FOB and then me sorting delivery via a freight forwarder would be the most cost effective option?

It is your best and cheapest option in my experience. You will also know how much you will be paying for the shipping beforehand and not get any unexpected additional costs.

If you would like a quote, please feel free to send me a PM.

Best regards,
Glen

 

[fz04]

I though FOB and then me sorting delivery via a freight forwarder would be the most cost effective option?

hi neil

how it works is with fob you will pay a higher price for the freight in china but once your stuff arrives in the uk you can arrange everything yourself such as

release from port

vat/duty

delivery

by paying prepaid you usually pay a nominal fee in china to have it shipped over but once your stuff lands in the uk you have to usually pay a big charge to have it released which is usually much more then the FOB method

if the actual worth of the goods is only £2000 you should be able to work something out with the supplier

and if they are not being flexible it might be best to avoid

 

[Wavecrest Ltd]

hi neil

how it works is with fob you will pay a higher price for the freight in china but once your stuff arrives in the uk you can arrange everything yourself such as

release from port

vat/duty

delivery

by paying prepaid you usually pay a nominal fee in china to have it shipped over but once your stuff lands in the uk you have to usually pay a big charge to have it released which is usually much more then the FOB method

if the actual worth of the goods is only £2000 you should be able to work something out with the supplier

and if they are not being flexible it might be best to avoid

From our experience (nearly 30 years ), even if the freight charge is higher, the OVERALL cost (which is the most important thing after all) works out less.

Glen

 

[Wavecrest Ltd]

yes I was thinking of something similar, I guess proof of shipping would be the Bill of Lading? Ideally I would like to pay 30% deposit the remainder once the goods have landed here and I can check quality but I doubt any supplier will accept this (I wouldn't!) Does the freight forwarder get a copy of the Bill of Lading to forward onto me so I would know when to pay the remainder?

Yes. The bill of lading is evidence that the goods have been shipped. If you were to use our company for your shipping arrangements, we would be advised by our local agent in China when the goods had been shipped.

Glen

 

[fz04]

From our experience (nearly 30 years ), even if the freight charge is higher, the OVERALL cost (which is the most important thing after all) works out less.

Glen

that is exactly what i said i was just trying to explain how it works

by paying prepaid you usually pay a nominal fee in china to have it shipped over but once your stuff lands in the uk you have to usually pay a big charge to have it released which is usually much more then the FOB method

 

[spencer08]

Its not easy to start a business of import and export. It is a risky game and without doing your home work you might end up in big loss.
It will need proper research and hard effort before you get few items that are to be exported and imported to give you a reasonable profit margin.

 

[jinglong]

hello, we are export and import company, who deal in many things. and we have professional on paint tools, and solar products.

 

[Wowgiftchina]

It depands on the choice of product.You should know what the market needs first base on some investigate.

 

[getitstraight]

worst comes to worst, import a few hundred pound worth of stuff, give it a try see if its your kind of thing, if not you will still be able your stuff to get your original investment back and have gained experience in international trade

Can you recommend few random (not asking for your profitable ideas) things to try this out? Preferably something else than Chinese junk. Maybe even something from EU manufacturers (easier for the first time, less hassle, you can even visit for cheap etc)
Thanks

 

[gh05]

Well Fz, I don't know if you still frequent this board? I'm around 5 weeks into my trip now and up until now have had very limited access to the internet. Naively I assumed free internet would be easy to come by!

The experience so far has made it clear to me that I absolutely can't go back to an IT job long term and I am more keen to start a business than ever.

I'm still a month away from getting to Asia but am going to start considering the possibilities. I have a question for you though...

How do you go about researching what products will sell in the UK? Or is it mainly just instinct? I could for example easily search for 'Thailand top exports' in Google to find what they produce of use to other countries but isn't it about finding that one product which hasn't been exported yet?

Take Thai whisky as a (probably bad) example. It is already readily available in shops in the UK...is that a sign that there is money to be made from it or a bad sign of competition which is too tough?

Thanks mate.

 

[marvel_rich]

export-import are two businesses that quickly make money with a note should have a professional management and business is very exciting...Wonderfulll money

 

[haligihandicraft]

Does anyone know much about how hard it is to make money from importing/exporting products? I've heard the start up costs are low but would like to hear from someone who knows a bit more.

Thanks.

edit - I don't currently own a company or have any product to import/export.

Im working in a importing/exporting company and i see that it's not simple

 

[xinchenhardware]

Yes you are right.Do business need patiance,careful,and enthusiasm

 

[peterbirganza]

It depends on your product that you are going to import/export. There are many businesses, not working instead of high investment because the product offered by them is not valuable. So before starting any sort of business you must have to make a plan for that and specially judge the strength of product going to be offer.

Best Regards,

peter