What do I need to know about opening an import business before I invest?
I want to start with a small import business and hope I could succeed and get bigger.
I have the storage place, $30,000 ready, and about 5 years experience in FMCG marketing and brand management.
Can I get your advice on what I need to know, before I start and after?
Is the amount of money put to invest sufficient?
Am I missing anything that I should look into before I commence ?
Thank you in advance for your help.
That's a good thought of opening a small business. I believe the rules and regulations and finance are the basic factors which need to be considered in importing and exporting business, but I would suggest you make good use of social media platforms to ensure your online presence. Also, your unique selling point which gives you an edge over competitors is something you should figure out. Thanks.
I think that you already have all necessary things for a good start :) The most important things for making every business successful are having clear goals and a competitive idea, also knowledge about your certain sphere, what you're planning to do, and about business in general. Analyzing general competition in your sphere before the start is necessary too, sometimes it's so great that there's no sense for a startup at all. Also, you need to create a good work team, develop an effective management system which will be the basis for profitable functioning of your whole company and a network for your future partners/clients. In my opinion, your start capital is ok but be careful with it for the first years because many new companies fail because of great costs in the very beginning.
A good customs broker is a must for it. I recommend you to use the help of such services like the one from https://clearit.ca/services/customs-brokerage for this purpose. I think they are really the best in it, you will like working with the guys there ;)
I think you should also find a good customs broker for your business. It will help a lot.
As in any other business, get customers first and then think about the supply chain. Do you know who your specific audience is?
Hi Serge, congratulations on your new venture! Imports has a lot of prospects (depending on the goods, quality and market demand/position). One of the foremost things you out to figure out is the import taxes and import regulations. Do you have an import license, or will you piggyback on an existing one (thru an agent, perhaps)? These massively affect your final pricing and profits. Add to that the cost of transit of goods and logistics. Are you in a wholesale model or thinking retail? Do you intend to create a supply-chain or be part of an existing one? Then again, are you going to sell online or off the shelf? I think these are important questions you should ask yourself These will govern the eventual importing and subsequent movement of your goods in the local market. But, mind the import costs, taxes and regulatory constraints first.
I would suggest you find a Score counselor in your area and develop a business plan under her / his guidance and make sure the counselor has experience with the import business
Are you going to handle the importing of the product or is there an import agent who is handling it for you? Are you going to buy goods fob delivered to you or fob the port of export or port of entry? The answers to these questions makes a big difference. If you are buying goods from a foreign manufacturer, ideally you want them delivered to your warehouse so all of the import duties (if any) and issues have been dealt with before you get the products. Depending on your role in importing the goods and the goods themselves you may need an import license for the goods. Likewise, if you are going to handle the matter as a customs agent that is an entirely different matter. It also depends if you are importing goods from Canada and Mexico or somewhere else. I would start by reviewing information on the US Customs website and speak with a Private Customs agent to discuss your options in dealing with imports.
It is hard for me to answer since you are in Lebanon and my knowledge of the food industry is rather limited. The capital you have is probably enough for a small start. Here import businesses need to buy in container loads to be competitive with freight but that should not be an issue there since most tings would be shipped by truck and you probably don't need to buy a truck load.
For payment you will most always either deal with an Irrevocable letter of credit or prepay by bank wire. You will need to check on your local laws and food products may have some specific laws related to safety.
Basically it is going to be like most any business. You will need to find customers, you will need to find suppliers and you will need to work out distribution. You need to set up a legal business structure and an accounting system. Good luck with your project. I think you can do it.
I am not sure if you are thinking about being an Agent or Principal Importer (also known as Master Distributor) hence buy and sell goods yourself. There is a world of difference.
As an Agent you work on commission and your job is to bring together the sales channels with the suppliers. This means you have to have a great deal of relationships with both suppliers and channels. The value and skill of an agent is to bring this 2 entities together. The real question is how extensive is your network.
To import yourself (Maser Distributor or Principal Importer) you need all of the above plus you also need finances to fund the inventory, sales, marketing, and logistics.
In any export/import business (your suppliers will be in export business whilst you are importing!), the goods are paid for in advance using LC (letters of credit) issued by banks. This means you (the importer) deposits the funds for full cost of the goods (FoB) or carriage paid (CIF or CFR), at a recognised bank which will then issue a conditional LC. The conditional LC is to protect you in case the supplier does not ship the goods as agreed and funds are only released when the conditions are met (the conditions are set in the contract and cannot be changed once the LC is issued).
So $30,000 is great start point if you want to be an Agent but I doubt it will buy you much in volume if you want to be principal importer.
Here is a good link for glossary of terms of export and import which is internationally recognised and accepted norms http://www.bizmove.com/export/m7q.htm
I hope this helps.
I read your profile, you are a marketing expert.
I suggest you to start with online selling system it will help you to reduce spending on door to door marketing of your imported FMCG products and helps you to capture wide geographical area. An app will be added advantage. I can help you with development of online system with minimum investment.