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A Way to Make Big Money As an Importer/Exporter

A Way to Make Big Money As an Importer ExporterAn import business can be a very lucrative business. Both import and export agents, who are also referred to as international trade agents, are needed in import/export transactions. The import agents handle the importing of foreign goods, and the export agents work with exporting domestic products. According to documentation from the Office of the United States Trade Representative, 95 percent of the $2.5 trillion annual trading is made up of small businesses. This means that if you are an entrepreneur entering the international trade business, there is the opportunity to earn big money. It is a very detailed process. Here are some steps to help you begin.

 

Financing An Import Business To China

Financing An Import Business To ChinaIf you’re looking for a profitable small business venture, starting an import business could be the way to go. Finding the initial money to start one, however, is sometimes difficult.  This is true in all small business, including an import operation.  Special business finance skills are necessary to begin a global business.  Part of the success of the business is to find the right type of financing.

Imports are goods and services that cross into a foreign country for resale.    Import businesses are profitable because of the low-cost goods available for import from foreign countries like China.  The cost of these products is low and they can be resold for a good profit.

Imports can make the difference between success and failure of a small business, especially with today’s economy.  If you’re interested in joining the global market and are getting a traditional bank loan is difficult, you may have to turn to alternative methods for your small import business.  It may be necessary to use more than one method.   Here are a few to consider methods to consider:

  1. Factoring Accounts Receivable

    This is simply selling your credit accounts or accounts receivable to another factor.  The factor can be a commercial finance company, a bank, or an accounts receivable financing company.  These are usually sold at a discount of the face value of the credit accounts.  The factoring company gives you an advance payment, for a small fee of 2-3 percent.  This way, you have the money, and don’t have to wait on for payment. This is known as an asset-based loan.

  2. Financing Using Inventory

    You can use your current inventory to get a loan to finance your import business.  It can be expensive, but a very effective way of financing a new import business.  This uses your current inventory to secure a loan to allow you to buy the imported inventory that your customers desire.  Through this, you can increase your inventory and not impact your cash flow.  Blanket inventory lien, floor planning, or field warehousing are all types of inventory financing.  This makes it an asset-based loan.

  3. Purchase Order Financing

    This form of financing is similar to factoring your accounts receivables.  You just go further and take your invoices or purchase orders and assign or sell them to a commercial finance company.  The finance company has to assume the risk and the task of billing and collecting for these invoices.  The company pays you a profit after it collects the debt from the customer.  The cost is more expensive than a bank loan, but it is a way to get started if a bank loan is not an option. 

Starting an import business may be a bit time consuming, and you may have to use other than normal financing, but the rewards can be great.  If you want to add importing to your current business so you can diversify, don’t let failure to get a bank loan keep you from reaching your goals.  Try one or all of the above methods, and you might be on the road to success in the import business.

 

Getting The Best Wholesale Price

Getting The Best Wholesale PriceCompetition is a business fact of life.  Whatever you do, there’s someone out there who wants to do it equally well or better for less money.  Your goal as a business owner is to stay on top.  To do that, you’ll want to obtain the best wholesale price possible.  If you can do that, you can keep prices at a minimum, and your business will grow.

If, however, a competitor is selling the same items for a less expensive cost, then they’ve obtained a good wholesale price.   By obtaining a lower price, they can sell it at a discount and they will be at the top of customer’s lists.   Obtaining a low wholesale price is one strategy to insure that both sales and profits will increase.

Here are some tips to help you obtain a low wholesale price, and keep your company at the top of customer’s lists instead of your competitor.  This way, you can sell the same items at prices lower than theirs.

  1. Try to Place Massive Orders:  This may not seem like an advantage for new sellers, because they require large investments which often make new sellers hesitant.  If you can do it, however, it will probably be worth the effort.   Purchasing your product in massive amounts, will make the items cheaper per unit.  Once you find a good wholesaler, this should be your goal.  When referring to “massive orders,” it generally means purchasing in bulk and costing over $1,000.  For example, you may buy a single item that you can purchase for $4, your $1,000 order will be a bulk order, and will be a good investment.
  2. Make Connections:  Most top sellers didn’t obtain the best wholesale prices over night, they worked hard for it.  Top sellers take the time to connect with their suppliers.  A good relationship between the seller and supplier is crucial for the success of any business, and even more so when dealing with the Chinese.  You need to establish a good relationship, because the Chinese think this is most important in business dealings.  If you are a first-time seller, make sure to research the culture and style of business dealings in China.  This will give you a good start.  Connect with your supplier.  Contact them frequently by phone or email.  Let them know new business you may have in the future.  This helps them feel a part of your business, because they see that you are interested in building and upholding a good relationship with them. 

    No matter how small your business or the amount of your order may be, nearly all Chinese suppliers give high regard for your business.  Research shows that 99% of online retailers started out small and build from there. As their business grows, they retain loyal customers.   Because they expect your business to grow, suppliers will also try their best to know you and keep you happy as much as possible.  They want you to keep them as your supplier in the future.  Suppliers and sellers have to be able to rely on each other.  That’s where building the relationship and making the connections with the wholesaler is important.  When you have the chance, let the supplier see you as a person.  Tell them about yourself, family, and your future plans.  Getting to know each other is important, and will help insure a solid relationship for years to come. 

  3.  Go the Extra Mile When Dealing with Foreign Suppliers:  Foreign suppliers, especially Chinese suppliers, have different customs.  They can be a barrier when doing business.  Language can be a hindrance in forming a good relationship.  Don’t give up.   Keep trying to build the relationship.  You should always give them treatment which is above and beyond customary business dealings.  In China, one way is to send your supplier local treats that are unique only to your country.  Provide them written information about your business.  Some foreign businessmen can read the language better than they speak it.  By sending written information, you help to insure a better relationship.
    • Know Who to Deal With:  As much as possible, you should avoid dealing with middlemen.  Instead, you want to deal directly with the manufacturers.  This way, you will be more likely to get the best price.
    • Be Prepared:  If you really want to get a good manufacturer, it is imperative to be prepared.  Make sure you research to get a good, legitimate wholesaler, have the money you need to buy your product, have adequate storage for your product, and make sufficient transportation and shipping arrangements. 
  4. Negotiate a Good Price:  When you approach a supplier, you have to negotiate. Before you can do this, however, you must know the best possible price that you have to offer the manufacturer.  Remember that you need to give a price that still makes your business a profitable one.  Sometimes it’s better to have a partner do the actual negotiating, so you can still keep your good, personal relationship.

These are a few of the tips to get the best possible prices from your suppliers. If you follow them, you will find the best possible price, and stay ahead of the competition.

 

 
 
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