I had been in the import/export business for a few years now. It started when I saw how much my best friend earned from exporting clothes and toys from China and selling everything on Amazon. She already had an excellent job with an even better salary, but she became more well-off because of that. So, I asked how she did it and connected me to her suppliers. A week later, I was already waiting for the shipment of tiles and other construction materials that I wanted to sell in town.
My experience with this kind of business was pretty smooth, considering I was a new entrepreneur. It was all thanks to my best friend, who showed me the ropes immediately. She did not have a mentor when she started, so she incurred some losses and almost had a mental breakdown.
Here are some tips to safeguard your mental health when you become an import/export entrepreneur.
Find Out All The Fees From The Beginning
The first thing you need to learn about the import/export business is that it requires you to pay more fees than when you have a local business. After all, if you are the manufacturer, you have workers, machinery, and facilities to spend every month. If you have a supplier, they will undoubtedly add interest to their rates, regardless if they claim to offer the lowest prices. Advertising your business and setting up a website for it is not free of charge either. More importantly, the shipping rates increase depending on the distance between you and your clients and the products’ size and weight.
Now, not every fee may be disclosed to you, primarily if you deal with “wise” people who will try to milk as much money out of you as possible. They tend to mention an amount to make you feel like you have found an incredible price; however, upon checking out, you realize that tax is not a part of that rate, so you also need to pay for that.
The key is to ask suppliers about all their fees after-tax deliberately. That will make it easier for you to determine if you are genuinely getting an excellent deal or if someone wants to rip you off.
Avoid Sticking To A Single Product Or Source Of Products
One mistake that rookie importers make is that they only focus on one type of goods or buy products from a single source. Some assume that it is a wise move, considering they can save on shipping fees since everything comes from one manufacturer. Others aim to get the items at a wholesale price; that’s why they buy the same products in bulk.
The problem with placing bulk orders is that the goods may get spoiled in some way. After all, it is not only foods that have an expiration date – if you try to sell a product today, and an upgraded version of it comes out tomorrow, your items on-hand will technically be a thing of the past a day after that.
As for sticking to a single source of products, there will be times when your supplier cannot provide your orders. It is not always their fault, considering awful weather can delay shipments, and power outages can slow down the production process. Thus, you should have two or more backup suppliers to avoid issues with your clients.
Strike A Deal With Trustworthy Clients
Furthermore, entrepreneurs need to be a little pessimistic, mainly when you are exporting goods. Though it sounds awful, you cannot trust that someone will genuinely want to order thousands of pieces of your goods until they wire transfer the full amount to your bank account. Many newbies have been too eager to please their clients, so they agree to the order-now-pay-later scheme. In the end, some people back out even when the products are ready, causing the entrepreneurs to go bankrupt.
If you are wary of striking a deal with folks that you have never seen in your life, there are a couple of options for you. The first one is to sign up for Alibaba US or similar websites. This is where you can upload product details and photos for all the buyers to see. When someone takes an interest in your goods, you can safely communicate through their app and conduct the transaction.
As mentioned above, you may ask your potential customer to pay first before sending the products to them. It is possible to let them pay you half upfront if they want some leverage, too, but any amount below that may put you in a sticky situation.
Final Thoughts
Importing and exporting goods is a great way to generate income. You can practically find clients everywhere, call your suppliers for orders, and wait for the products to arrive at your doorstep. However, you need to make sure that you know the ins and outs of this industry and only transact with trustworthy folks. Otherwise, your efforts – and money – will go to waste.