HOW TO START & OPERATE YOUR OWN

HOW TO START & OPERATE YOUR OWN

PROFITABLE IMPORT/EXPORT BUSINESS AT

HOME

What is a good way to build up a successful business from nothing

and have fun doing it? The import/export business may be your

answer. Not only does it require little financial investment to

start, but it offers the prestige of working with clients from

all over the world.

You don't need previous experience in the field, but you should

have a good head for organizing. Fulfilling a successful

import/export business requires constant attention to little

details.

Do you know some local manufacturers looking for ways to increase

their market for the goods they make? Or are you planning a trip

abroad and want to make some contacts for setting up a business?

If you have the ability to sell, and an air of diplomacy, the

import/export business might be right for you. All you need is

the desire and determination to make it work.

As you progress in the business, many factors become obvious and

easy to handle. For example, you'll need to find a person to

handle shipments, called a freight forwarder. And you'll need to

create solid contacts and strong relationships with reliable

suppliers. But after a short time, you can be well on your way to

making a sizeable income, with a very low overhead.

Do you like the idea of running your own business? How would you

like a tax deductible trip to foreign places a couple times a

year? The advantage of an import/export business are great.

The biggest advantage is the money you'll make.. Once you get the

business underway,, the commission for setting up sales is very

profitable. And after you establish and maintain a number of

exclusive accounts, you'll find the time you spend is highly

rewarded with money.

Take a look into the import/export business. Consider the risks,

and consider the advantages. Talk to people in the business. Is

it for you?

HOW IT WORKS

Of all the manufacturers in the United States, only a small

percentage distribute goods outside of North America. The goods

that do find foreign markets are exports. On the other hand,

anything that is manufactured outside the country and brought in

for sale is imported.

Although it seems obvious that all manufacturers would want a

worldwide market, it is not easy for a company that is limited in

its scope and abilities. That's where you come in.

An import/export agent is a matchmaker. Manufacturers of domestic

goods seek foreign distribution; foreign manufacturers want a

United States market. You need to find them, make a solid

connection, and establish a business relationship with these

companies.

The agent's commission is generally about ten percent. Now, think

of ten percent of $500,000 or ten percent of a million. Although

that may seem like a large order, it wouldn't be, if you're

talking about machinery, raw materials, or computers.

The market is unlimited and there are hundreds of manufacturers

looking for foreign distribution. Sporting goods, clocks,

electronic games, radios, housewares, garments, tools-anything

can be readily imported or exported if there is a consumer demand

and if you can get the products.

The United States Government encourages exports. Indeed, it is

those sales that keep our balance of payments with the vast

amounts of goods are imported.. And you'll find government

agencies helpful in establishing your business.

THE BASICS

You can start your import/export business at home with a

telephone.. You'll need a file system, business cards, and a

machine to answer the phone calls. Once you get going, you'll

want a cable address or a telex hook-up.

And you'll need a classy letterhead. Until you establish personal

contacts, it is your letterhead that represents you. Make it look

professional, possibly embossed or two-color, or gold leafed.

Have it printed on light-weight paper for airmail correspondence,

but don't have airmail envelopes printed. You'll have a lot of

domestic correspondence too.

More than office equipment, you need the determination to make

it work. It will be slow at first, and you'll need to plan your

moves, make contacts and SELL YOURSELF. But once you make a

few sales and sign several exclusive contracts worth money, you'll

know your dedication was worthwhile.

MAKING CONTACTS

The most important step in setting up your business is finding

the contacts. You may have relatives in a foreign country;; you

may have frequently visited and established business

relationships in a country. Or, you might just have a feeling for

what will sell where. A person who keeps well-informed in the

business world can pick up and ride the crest of worldwide

trends.

Foreign consulates located in the United States have commercial

attaches who want to establish outlets in the U.S., and they're a

good place to start.. Sometimes these consulates can help find

indices of their own import/export enterprises.

The Unites States embassies abroad are another place to find

contacts for commercial distribution. They can help you find out

about a company's solvency and reputation.

Another way to establish contacts is through the Chambers of

Commerce of every city you are aiming for.

Start small-don't tackle the world.. Where do you want to sell

American goods you might have in mind? Which countries have the

merchandise you want to import? Find out about the countries,

what they have to offer, what is generally in demand.

Then prepare a massive mail campaign

The easiest way to mail hundreds of letters is to use a typing

service that has the equipment to produce the same letter with a

different address each time.. It's worth the money it will cost;

you'd go crazy typing so many identical letters.

To every possible contact, write a letter introducing your

company, requesting the names and address of appropriate firms to

contact. Ask to have the notice published in the monthly bulletin

or posted in an appropriate place.

From the names to get back, write another letter, again

introducing yourself, and asking information about their company.

You can use a questionaire, which is easy to fill out and invites

a response.

What goods do they want to import? What products are now imported

and how are they distributed?? Does the company have a certain

territory, does it have sales representatives, branches in other

cities? What are the basic details of operation--history, assets

and liabilities, plans for growth?

Request any information you need, to find out what they will buy

and what they have to sell. If the company is a manufacturer, ask

for samples or a catalog, the facts and figures of current

foreign distribution, and the product demand in their own

country.

ANALYZE THE MARKET

Keep informed. Read everything you can find about world trade.

Look at trade publications, international newspapers, news

magazines, and financial reports. Who is selling what to whom?

Although the market for American-made airplanes is sewn up, there

are thousands of medium to small sized manufacturers in every

state of the union.

You can get goods to sell, buy you have to be sure to study where

they are in demand and can get the price to make exportation

viable. Your questionaires will tell you what foreign importers

want. Take it a step further and read the journals published by

that country; many of them are available in English. Do these

publication confirm the desire for certain products?

The American market for imported products fluctuates with the

value of the dollar in comparison to the value of each other

country's currency. And, importation prices reflect that

directly. Can American consumers afford to pay the price of

certain imported goods? Or will they?

Finding the right market is as important as the actual

particulars of making deals and selling goods.. What do you think

will sell? If you do some careful studies and think about the

trends, you'll be able to come up with hundreds of products to

import and export.

The import/export business is actually smaller than you might

think.. There are only a few of these businesses; that's why

there's plenty of room for more.

WHERE TO FIND HELP

Establish a good business relationship with a local bank that

handles international business.. Your personal banker will follow

through on the actual foreign transactions, and will help you

keep your credit afloat, In fact, this is one of the best factors

about an import/export business. Aside from office suppliers and

correspondence, or possible business trips, you need a no

personal cash outlay. All you need is a good credit and good

reputation.

Your banker is your credit manager and will give you valuable

advice and references when you deal with both American and

foreign manufacturers and distributors.

The United States Government agencies are great places to find

help... These agencies promote the import/export business, and

publish many small booklets and pamphlets. They also distribute

continually updated reports on foreign markets, commerce and

financing.

Read these source of information and find out the particulars of

exports, global surveys and ocean freight guidelines. Become

familiar with the market share reports, current laws and

regulations, and government promotional facilities.

MAKING CONNECTIONS

As you continue your correspondence with foreign companies, build

up a good rapport with their representative.. Pin down a few

companies- perhaps in the same country or similar territory--to

their exact needs. What are the two or three products most in

demand?

Consider their methods of distribution. You may be able to work

directly with a wholesaler of an overseas importing company. Your

commission will be lower, but you won't need to handle as many

particulars , and they will take care of distribution.

Or, you may need to supply catalogs and samples, working with a

network of small companies or sales representatives from a larger

conglomerate.

The highest fees that you can collect are for raw materials taken

from the source and delivered directly to a manufacturer. But you

must be certain of a guaranteed quantity and the continued

ability to deliver.

If you are importing goods, you'll need to find U.S. distributors

that can handle the quantity of goods at a high enough price for

you to profit by. A single retail outlet or two is not enough to

make your time worthwhile. Look into how buyers work and make

contacts in the larger retail chains if you have retail

merchandise.

GETTING THE GOODS

There are hundreds of American manufacturers with limited

distribution looking for an overseas market. Exporting their

goods is the place to start your business.

You have many selling qualities for convincing the manufacturers

to engage you as the sole export agent. You have foreign contacts

and know the demand for specific goods.. You will handle the

sale,, the paperwork, the money, all shipping, customs, and

foreign distribution.

The manufacturers in return provide firm price quotations, and

you put your fees on top of that; you cost the manufacturer

nothing.

The manufacturer have everything to gain--an increase in sales, a

broader market, and more profit. And you have everything to

gain--establishing your business, and a commission on the cost of

the goods. That is the basis of firm business connections and a

mutually profitable arrangement.

Contact local manufacturers first and then move into larger

territories. You can make these contacts by phone, in person,, or

by personal introduction from contacts you may already have.. Or,

you can advertise in business publications and newspapers.

Before yo do get into a legal agreement, be sure to check the

reputation of the company. How long has it been in business?

Where are the products distributed domestically? What is the

solvency and reliability of the company and its goods? When you

make your sale, you'll want to be able to deliver.

MAKING AN AGREEMENT

ONce you have agreed to represent the manufacturer as the export

agent, you need to have a written and signed contract to bind

this agreement. Your attorney should be the one to draw up this

contract; later you can just use the same one, substituting names

of other manufacturers.

Basically, the contract is between the manufacturer and you as

the export representative. You are granted exclusive rights to

distribute goods to all countries except those they already

distribute in. The manufacturer will pay you the specific

commission quoted to the distribution on top of the price of

goods. The company will also provide catalogs and samples for

your use in distribution.

You, the export representative, in turn will promise to do

everything possible to make contacts and distribute

manufacturer's goods in foreign territories..

The terms of the contract should then be stated: how many years

the contract will be signed for, the terms of cancellation by

either party voluntarily or because of no sales action over a

certain period of time.

THE SALE

You've made your contacts with foreign distributors who will buy

the merchandise. You have a signed contract with an American

manufacturer that will deliver the goods.. Perhaps one of the

distributors now asks for a firm quotations on the price of a

certain amount of goods.

You go to the manufacturer and get a price quotation on the

quantity of goods. It should be valid for a certain stated

period... The manufacturer may agree to deliver the goods to the

ship,, handling the freight to that point, or you may need to

make arrangements from the factory.

You ass on the commission you want to the price of the goods.

Then you add on all the extra costs of getting the merchandise

from the factory to the warehouse of the distributor.

If you've made an agreement with a foreign import/export company,

their representatives may take over the shipping, paying you the

price of the goods and your commission. That;s the easiest, but

your commission will have to be reasonably lower.

If your sale is to a company that will distribute the goods

wholesale or retail from its premises, you have to arrange all

the transportation.

TERMS OF SHIPPING

You will become more familiar with the terms of shipping used in

quoting prices and delivering goods as you gain experience. Your

responsibilities vary with the terms of the agreements and

orders. Check with your freight forwarder to be clear about your

responsibilities.

A bill of lading is a receipt for goods shipped. It is signed by

the agent of a ship or common carrier and assures the buyer that

the goods were unloaded in the same condition as they were

accepted. These are the documents you'll need to produce for your

banker to release the letter of credit.

FOB means free on board. The seller delivers the goods to a

certain destination with no additional charges. The seller

insures and takes the responsibility until that point. The buyer

takes the responsibility and pays the charges after that. For

example, FOB New York means the seller's price quotation includes

full responsibility and shipping to New York.

FAS means free alongside. The seller delivers the goods to the

ship that will carry the merchandise. The buyer pays to load onto

the ship and takes responsibility from there. FAS New York, for

example, means that the seller will deliver and store the goods

until they are ready for loading onto the ship.

C & F means cost and freight. The seller pays the freight

charges. The buyer insures the merchandise and takes full

responsibility after the destination.

CIF means cost, insurance, freight. The seller is responsible for

the value and condition of the goods, and pays both insurance and

freight charges to a certain point.. The buyer is responsible

from there.

THE FREIGHT FORWARDER

A freight forwarder is a person who takes care of the important

steps of shipping the merchandise. This person quotes shipping

rates, provides routing information, and books cargo space.

Freight forwarders prepare documentation, contract shipping

insurance, route cargo with the lowest customs charges, and

arrange storage. They are valuable to you as an import/export

agent, and they are important in handling the steps from factory

to final destination.

They can be found by looking in the yellow pages or by personal

referrals. Find someone who can do a good job for you. You'll

need someone you can work with, since this may become a long term

business relationship.

You'll need the help of a freight forwarder when you make up the

total price quotation to the distributor. Not only do you

include the manufacturer's price and your commission-usually

added together, but you need to include dock and cartage fees,

the forwarders fees, ocean freight costs, marine insurance, duty

charges, and any consular invoice fees, packing charges, or other

hidden costs.

Be especially careful when you prepare this quotation It

certainly isn't professional to come back to the distributor with

a higher quote including fees you forgot... You might go over the

price quotation with your freight forwarder to be sure nothing is

overlooked.

Usually the quotation is itemized into three main categories of

cost of goods, which includes your commission, freight charges

from destination to destination, and insurance fees.

Give a date the quotation is valid to, which should be the same

as the date given on your quotes. You may also include

information about the products, including any new sales

literature.

A formal letter that accompanies the price quotation should push

for the sale. You can inform the distributor of the shipping date

as soon as the order is received and confirmed by a letter of

credit. Send the letter and price quotation by registered mail to

be certain of its delivery.

THE LETTER OF CREDIT

A letter of credit eliminates financial risks for you, the

manufacturer, and the distributor. When your distributor confirms

the order, a letter of credit is drawn from that company's bank

to a branch in the United States or to your bank.

This letter of credit confirms that funds are available from the

distributor to cover the same costs you quoted. An irrevocable

letter of credit assures you the order will not be cancelled at

any time... When that letter of credit is likewise confirmed by

your bank to deliver the goods, the distributor is assured of

delivery. Once the letter of credit is confirmed, so you don't

have to worry about the fluctuation in currency.

Basically, the bank holds the money until all shipping documents

are presented. The letter of credit states the terms and

conditions to make it legal and negotiable into money, usually

holding for proof of shipment of the goods. Your freight

forwarder helps you attain all those documents. When you hand

them to the banker, the letter of credit is turned into liquid

assets for you to pay the manufacturer and all other invoices

from the transaction.

Never work on promises. Not only do you take a gigantic risk, but

you create bad risks for everyone you are involved with. A letter

of credit is the only sure way to transfer these payments.

DELIVERING THE GOODS

There are many combinations of people and methods you can use to

deliver the goods that were ordered. When you produced a price

quotation for the goods, you had to go through all the steps the

merchandise will follow. Now, before you proceed, check again.

Do you have a confirmed order signed by the authorized

representatives of the distributing company?? Has your banker

approved the letter of credit from the company?

Compare the amount of the letter of credit to the amount quoted

for the goods. Be sure they match exactly. Or, if the distributor

chose a certain quantity of several offers, check the prices

again and confirm the quantity.

Confirm the quotation and sale with the manufacturer, and do the

same with the freight forwarder and any marine insurance agents

you are working with. Then follow through.

I order to assure the quality of merchandise, some manufacturers

prefer to handle freight to the loading docks,, which makes it

easier for you. If you handle overland shipping, follow through

to be sure the merchandise is picked up and arrives safely at its

destination.

Be informed of the date the goods are loaded onto the ship. The

factory should have them freighted in time to avoid costly dock

storage charges.

Since all conditions of the sale must be met to comply with the

terms of the letter of credit, you need all the signed documents.

Have your freight forwarder or other contacts get authorized

bills of lading for the merchandise each step of the way--from

destination to destination..

Once you have all the signed documents, present them to your

banker. If all the terms are met, the funds will be released.

Since your commission is part of the quoted price of the

merchandise, you'll usually collect your fees from the

manufacturer.

When it is totally complete, you collect your money--and make a

sizeable profit for simply making connections. Consider the

commissions when you have dozens of orders coming and going.

IMPORTING

Take a look at the household items and equipment you have in your

home. Made in West Germany, made in Japan, made in Korea. You

may have clothing from India, shoes from Brazil,,, a leather wallet

from Italy.. Your car may be an import; your stereo equipment may

be manufacturer elsewhere. There are hundreds and hundreds of

items manufactured all over the world, now being used by the

American consumer.

The market is huge. And there are many American firms looking for

foreign made merchandise to distribute. Some items are less

expensive;some are better made; some are imported because they

are made in a country now fashionable with the designers.

What can you tap into? Maybe you have contacts in the Unites

States, distributors looking for certain goods. And you've

already made contacts in the foreign countries that produce these

goods.. Follow through and get yourself an exclusive distribution

agreement with those manufacturers.

Importing requires the same diligence and follow up as exporting

does. You'll need a signed contract with the manufacturer to be a

sole agent distributor to North America, or even the world.

You'll also need to obtain firm price quotes from the

manufacturer in the quantities your distributor requests. These

quotes should be converted into the appropriate dollar figures

representing the currency exchange.

Investigate the reputation of the manufacturer and the

reliability of the goods. If you import something like electronic

components, check into other distribution market the manufacturer

has to assure the quality of merchandise.

Your commission will come through from the foreign manufacturer.

Have your bank investigate the solvency of that company and the

reputation of living up to agreements. Since it's on foreign

territory you'd have more trouble in any legal suits, even in

light of many international laws.

Prepare the price quotation. It is easiest if you request terms

of delivery to the port of that country. Your freight forwarder

can help you move the merchandise from port, overseas, and

through domestic customs.

Follow through with all the details of shipment. Be sure to

include any insurance, dock fees, storage rates, and shipping

overland. Overlook nothing so your price quotation to the

American distributor is accurate,

Itemize the quotation and give it to the American distributor..

Upon receipt of an authorized order, double check prices and

follow through on delivery.

The letter of credit will go from the American distributor to the

bank of the manufacturer. All terms and agreements regarding

prices, freight and insurance will be defined. The manufacturer's

representative will confirm receipt of the letter of credit,

which will release the goods for shipment.

Have your freight forwarder follow up on the shipment of goods.

They may have to be freighted from the factory to the docks..

Arrangements for shipping need to be carried out.. Customs duties

and unloading need to be followed through from the American port.

Then the goods may need to be freighted overland to the final

destination...

As soon as the goods have arrived at the proper assigned

destination, papers have to be documented and presented to the

bank that holds the letter of credit. Then, all carriers and

agents need to be paid, and you collect your commission.

PROMOTION

After you have completed a few sales transactions to establish

yourself, you'll need to promote your import/export business to

get more clients. The first transactions give you the experience

to learn the ropes of the business, and to establish contacts and

agents both here and abroad.

Join organizations of commerce and foreign trade associations to

develop more contracts and extend your territory. Talk to

everybody you contact about importing and exporting, learning

from their mistakes and successes.

Advertise in the print media for distributors and for goods.

Manufacturers don't know how to make the contacts for foreign

distributions. Show them your credentials and pick them up on

exclusive contracts. With a little experience, you can market

almost anything anywhere.

EXPANDING THE BUSINESS

THe profit of the import/export business is in the quantity of

the goods traded. The higher the cost of the merchandise, the

higher the profit from your percentage. Since you need to go

through all the steps for each transaction, having more sales on

a continual basis simply adds to profit.

Send constant mailings to your original list of contacts and

follow-up leads. You might develop a sales approach. As you

develop more clients, you can convince the bigger companies of

your reputation.

Contact as many manufacturers and distributors as you can on both

side of the ocean. And solidify these contacts. You may be able

to work out an arrangement with someone to work in certain

country for a commission. Or, you might want to take a business

trip there to personally meet with the various companies.

get in-depth information on the products now selling.. Why are

certain products successful?? Maybe you can get into the same

market with more competitive product. Investigate ways to sell

more.. Do the products need to be better made? Do they sell

better at a reduced price? Know what sells and where to get it.

MAKING IT WORK

The import/export is a high profit enterprise. Because of the low

overhead, most of the money you make on commission is yours.. But

building a truly profitable business requires dedication and a

good knowledge of the business.

You need numerous contacts who know you, respect you,, and can

recommend your work. You need to have good agents both here and

abroad to help follow through on the delivery of the goods... You

need a good working relationship with your own bank and possibly

the others that letters of credit come into as branch transfers

from foreign offices.

Don't be hasty for orders. Investigate the manufacturers and

distributors to be sure the products and sales methods are

reputable.. Check out the particulars of shipping and

manufacturers from the foreign country. Each culture works in a

specific manner... Get to know how to work with those people..

The import/export business is not for everyone.. But it is a

personal operation that you can run yourself-- you don't have to

answer to anybody. The rewards of negotiating in a foreign

country are excitement, a touch of the exotic and the great

profit potentials.

When you make the proper contacts and follow through completely

with reputable manufacturers, reliable shipping companies, and

responsible distributors, you have it made.

If you are ready to put in the time, sell yourself. Start making

inquiries and contacts. Try it on for size.. Does it feel good?

Then MAKE IT SUCCEED,

If you need specialized LEGAL advice or assistance on this

subject, the services of a professional person are recommended.