Importing and Exporting Overview
Where global trade may have once been the talk of large corporations, today the phrase has firmly entered the lexicon of most small businesses. Technology, for the most part, has enabled this shift, allowing small business entrepreneurs to enter the potentially lucrative world of import-export commerce.
Products coming into the United States far outnumber those going out. Reasons U.S. Consumers continue to buy across borders are many:
- Price: Products manufactured more cheaply at foreign factories sometimes cost less. Quality being the same, average consumers will most likely buy the less expensive option.
- Availability: Certain goods can’t be grown or produced in the U.S. - think some produce, textiles and luxury items.
- Image: High-end imported products often possess an air of the exotic, a quality not always found in domestic products. Consider German beer, French perfume and Egyptian cotton, for instance.
For small business owners wanting to explore the import business, these practical guidelines may help facilitate the process.
- Contact trade representatives - Trade representatives specialize in making introductions and helping establish trade relationships with foreign manufacturers. They usually work in conjunction with their respective embassies to promote the sale of merchandise to the U.S.
- Correspond with top prospects - Like doing business domestically, newbie importers should identify top prospect companies to approach and obtain product samples. Prices and terms should also be negotiated, in addition to acquiring all written policies. A reference from another importer who has worked with the company should also be obtained.
- Check with an attorney - Have an attorneyreview all paperwork and contracts, including items such as import tax and shipping procedures.
Small businesses interested in exporting goods or products to global markets should do so cautiously, with knowledge of both benefits and challenges.
Benefits of exporting include:
- Increased sales and profits
- Reduction of overstock
- Boost in sales potential of existing product lines
- Enhanced competitiveness
- Reduced dependence on domestic markets
- Insurance against seasonal market fluctuations
- Enhanced potential for corporate expansion
Challenges of exporting include:
- Obtaining special export licenses
- Incurring added administrative costs
- Applying for additional financing
- Subordinating short-term profits to long-term gains
- Allocating personnel for travel
- Waiting longer for payments
- Developing new promotional material
- Modifying your product or packaging
First-time import-export entrepreneurs will no doubt have many questions. Consider the following as you navigate the challenges of your new global endeavor:
- Will language be a barrier?
- Will I have to change my sales strategy?
- What U.S. government agencies lend assistance?
- What if my products don’t make it to market because of unforeseen circumstances?
- How do I move money between countries?
For more on import-export commerce and business operations, visit these links.
The International Trade Administration uses statistics and analysis to improve the global business environment and help U.S. organizations compete at home and abroad.
- Federation of International Trade Organizations
A directory of international trade web resources with thousands of links to international trade/import-export websites.
- U.S. Commercial Service
The trade promotion arm of the U.S. Department of Commerce’s International Trade Administration, the U.S. Commercial Service helps import-export entrepreneurs with business advice, market research and leads.
- U.S. SBA Office of International Trade
Offers information on SBA export finance programs, federal export programs, market-specific publications and trade regulations.
- U.S. Chamber of Commerce
Informs on policy issues affecting U.S. small businesses, including international trade and affairs, in addition to providing a directory of international chambers of commerce and links to their Web pages.
- U.S. Trade & Development Agency
Provides business leads in developing countries; offers training grants and workshops.
- Unz & Co
Provides international traders and dangerous goods transporters with compliance forms, references and training.
Information provider for individuals, corporations, government agencies, universities and other entities needing detailed news and information on countries of the world.
- American Translators Association
Contains a directory of U.S. companies and independent contractors that can translate, edit and proofread contracts and documents.