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Many people who want to start an import export business already know what product they’d like to start importing, or at least they think they do. Fact is most would-be importers came up with the product to import typically when they were on a vacation in a Third World country. While there they bought a souvenir and as the product was so cheap, they imagined that their mother, another relative or a friend would pay three-times if not four or five-times the amount for such a product than they would and instantly concluded that this is the product they will start importing.

Is that a correct way to decide on what product to import? No! Most entrepreneurs usually fall in love with a product and think that everyone else will feel the same way about it they do. But that is hardly the case.

The other half of the newbie import export businessmen asks, “What product should I import?” That is indeed a better way to start your business venture than coming up with a preconceived idea of already having a product developed and then start looking for customers to sell it to, or worse, deciding to sell it to the customers that live the closest to you, for example those in your neighborhood, town or state.

Remember, you do not start marketing after the product is developed and ready to sell!

Better question may be, “What’s lucrative product to import?” although the same dilemma continues – who will be your customer!

While the success of your business certainly depends upon the decisions you make, it is a business plan that gives you a path to follow, outlines research you need to do, measures the results, allocates resources, and outlines step by step actions you need to take towards your goal.

To decide on a product to import you need to answer many questions, some of which will require you to conduct some kind of information-gathering process first, a research, may be survey.

The single most important question you will need to answer for yourself is: Who will be my customers? Where do they live? What are the wants and desires of my target market? How do they live? What type of products appeal to them and why?

Once you start answering these questions, more related questions will follow. Based on the results of your research you will come up with answers what may be the best product to import, or better, design and develop a new product for your target market.

Remember, people seldom fail in business because they have overanalyzed their customer!

How to start an import export business cannot be answered with once sentence. Of all the emails I continue to get from individuals as well as companies that are looking into import export business as viable alternative to buying wholesale from local suppliers in the United States or selling only in the US market, several questions come up most often.

Is there much to learn about import export? Is it difficult? Are there many problems one can experience?

When I start a conversation with some of these individuals I soon realize that they are not too clear on the concepts of import and importing, export and exporting. What is the difference? In theory not much. If you export a product from a country of origin you are exporting. If you’re bringing a product from another country you’re importing. Basically you are most likely going to do one or the other, and not both. Most of my American clients look into importing into the United States. Some feel they want to also get involved in exporting from the United States but don’t have a product. If you want to export you could also for example setup your own company in another country and become involved in exporting from there and at the same time be also an importer of your own products in the United States, or another country.

But here I am only hinting at the subject of how you can run your business these days – for example, do you want to run your business with your company being based in the US, or would you like to entertain a scenario where you would establish a permanent residency in another country and start and base your business over there? Obviously there can be many advantages to doing something like that. There may be new business opportunities with this kind of setup but specific pros and cons will differ depending on where, which country you locate your business in and discussing details here is beyond the scope of this post and best left for another time.

One of the most common questions is wanting to know where to find suppliers. Many feel if only they’d have a good supplier they would be assured of success. Many look for that magic “How to Start an Import Export Business” package offer priced for only $19.95 expecting it will include all those addresses of suppliers to whom they can write and bingo, 60 days later they’ll be up to 6-figure income. Believe me, if it were that easy, that magic How to Information Package would not be $19.95!

To learn how to start an import export business you first need to realize that this is a two-part business. First you need to find the right product, get it out of the country of origin, ship it to destination, a country you import the product into, clear the customs, and then what? You got it home, in your warehouse. Now you have to sell it, get money out of it so you can start the whole process all over again, perhaps on a larger scale and with ultimately more profit.

So how will you sell your imports? Retail or wholesale? On the Internet? If retail, will you open your own shop, have a cart at the mall, do weekend markets, sell at flea markets, door to door? If on the Internet, will you use your own website or will you do eBay, Craigslist? There are too many ways to go when it comes to selling your imports. Will you sell only in US or also in Canada? Mexico? Kenya? Germany? Argentina? Why not?

Yes, having those right suppliers is a key. And many find some great ones on the Internet. Some even get an invitation from the supplier they found and board a flight to China. They get a VIP welcome, a limo ride to a 5-start hotel their supplier is treating them to, at his expense. Impressive! And they get down to business, the supplier sends a plush car to bring them to a board room to discuss the product, the size of their order, they negotiate quantity discount, delivery times, things are moving right along. Our buyer gets more impressed as ravishing young girls serve them fresh fruit during the negotiations. They are ready to place an order and pay upfront to get the best price and fastest delivery time. They shake hands, see a bit of China on a one-day quickie tour, overeat in a fine Chinese restaurant and they get an impressive escort back to the airport to catch their flight back home.

Weeks pass and no product arrives. I won’t hold you in suspense. There was no factory. No production line. No order is coming. The buyer got burnt!

Can you avoid that kind of fiasco? Yes you can. There are financial instruments how to do it, and there are other ways to do it. Above all, there are ways how not to go about starting in import export business.

Many prospective Americans importers just naively believe that things work the same way overseas as they do back home. Even if they get the motivation to take a trip and visit the country they want to import from and meet their supplier or suppliers in person at the country of product’s origin they often make a quick trip to inspect the supply side, may be few days to a week, and feel that did it. Try that in Bali, Bangkok or Bombay (Mumbai), and you just may find a great recipe for getting ripped off. I used to travel overseas to buy months at a time, year after year, visiting, checking my prospective suppliers, scrutinizing the scene, who was new, who went under, again and again visiting the same destinations until it would get to a point where locals would greet me from across the street, even though many of them I did not even know. But they knew me, because I have been coming back, over and over again and they all knew I was a buyer, and when I’d stop by their shop, warehouse or factory, they would quote me the “right” price to start – well, maybe not quite the last price but that’s part of the game, part of the protocol, part of the negotiations, and knowing how business is done in whatever the country, their customs and culture would be absolutely imperative to getting things done the right way.

What I had established with my suppliers was a true working relationship. They would routinely invite me into their family for weddings, child birth, funerals, tooth-filing ceremonies and other auspicious celebrations. Although you may strike it rich with just an email, the likelihood of developing the right relationship, especially on a start up level and above all if you are but a small to medium size business, in particular if you wish to be importing from the Third World, are slim, miss and hit at best. On another hand, if you’re a big business, like Gap or Wal-Mart, no worries, should your orders get messed up, your problems will likely get handled by government-backed arbitration committees. But being a little guy, having a problem in China or India, Thailand or Indonesia, best you eat your losses, regroup and start from scratch, if you’ll still find the stamina to continue in this business.

Bottom line, best learn how to get started in import export business the right way rather than just be muddling through. Following are some of the subjects and issues that you need to consider and become well-versed in if you expect not only to get started right and to survive but to ultimately become successful in import export business:

Where to go and what to buy
Different levels of involvement in import export
Who will be your customer, how will you sell your imports
How to find overseas suppliers and whom to buy from
Product design and development
Sourcing
How much should you pay for the product you want to import
Product price in country of origin vs. landed price after customs clearance at destination
Customhouse Brokers, who are they, how they work and what information you can and need to get from them before you buy
Freight forwarders, your purchases and shipping logistics
Packing practices and shipping process
Shipping documents
Freight insurance
Import export financing and alternatives how to pay for your purchases
Letter of Credit
Documentary Draft for Collection
US Customs Entry process
Formal Entry and Informal Entry
Hand carrying your commercial purchases across international borders and into the US
Harmonized Tariff Schedule and the classification process
Marking requirements on goods
Liquidated entry
Tax issues

Each of the above categories can be subdivided into smaller units, so there is indeed a lot of material to cover. Over and above gaining an inherent understanding of how to start an import export business there is an issue of where really are the opportunities in this business, whether in the current economic situation, or any situation anywhere. To truly understand what the opportunities in this business are you need to realize that the entire world is your marketplace. You need to think globally, because once you understand how the process works, you can import your product into scores of different countries, not only into the United States. Provided you have the necessary knowledge of the culture and the business climate in whatever the country, your opportunities for success begin to grow. Get started in import export business by taking that first step knowing you took it in the right direction!

Most amateur would be importers very likely visited a particular country on a vacation and came across a product that was so cheap that they instantly felt inspired to import it into the United States. They concluded that almost anyone they knew would pay for the product three if not five times its purchase price at the country of origin, hence they immediately believed they had a great business idea to pursue.

While this is not entirely far-fetched approach to starting an import business, it is only the beginning to learning if your product may be a winner.

Obviously, the would be importer is in love with his product, assuming that everyone will feel the same way. But will they? No! Not unless you have done your homework.

To decide who will buy your imported product must be based on analysis of your target market. Knowing who your buyer is, what he wants and how much he may be willing to pay for it must proceed import shipment analysis that must follow next.

Being familiar with a country you wish to import from and ideally having some contacts there already, especially with product suppliers, the manufacturers – exporters themselves, are undeniably important factors, but before jumping to conclusions of how much money you will be able to make you need to calculate the landed cost of your product.

The landed cost of your product implies the sum total of your product cost after you have cleared the United States Customs, meaning after you have paid freight, US customs duty, the customhouse broker charges and any other charges you will have incurred in association with bringing the product from overseas.

Cost of freight, duty and broker charges need to be prorated and added to your product purchase price. Once you will know your total cost and divide it by the number of pieces of your shipment and add the prorated figure to each piece of your goods you may establish that the landed cost of your product is just too prohibitive to allow you to markup the product as much as you thought you would.

If you should chose to ignore what your calculations may suggest, you could discover that few if any customers are willing to buy the product at the price you marked it. Such approach to doing business is likely to lead to failure.

Although there may be a buyer there somewhere for your product at any asking price, remember you cannot run your business on hope of finding that specific customer whatever time it may take. You must run your business on a well-calculated product turnover ratio. Simply put, if the product does not sell fast, turn over fast enough, you either have a wrong product, wrong customer or you are selling it at a wrong price.

If you discover your product landed cost is too high you can’t just increase its price in order to maintain the same profit margin you wanted. You just may price the product out of the market.

In order to maintain the same profit margin you may very well realize can be done only if you decrease the prorate of your product landed costs. Provided you are buying from the right supplier at the best possible price, to lower your product landed cost can typically be done only by increasing the volume of your shipment.

If you bought 500 pieces and the size of the shipment is one cubic meter and the prorated landed cost is just too high the only way to bring the landed cost down per piece will be by bringing in a container load of the product, or similar solution of increasing your purchase order .

But to do that you will have to spend more money for purchases, more on freight, more on duty, more on broker charges etc. Do you have the necessary budget to buy to follow through? If not, that product you thought you will make so much money with is not for you! You have to forget importing it and look for another product.

There is more to import business than meets the eye.

These days, from government reports to newspapers and tv, everyone is beating the payday loan and cash advances down. It is simple to condemn something without identifying solutions or alternatives. Where are people in desperate, urgent demand for cash suppose to go and get the money in a short time. They have probably tried their banks and credit card companies, already with no luck.

There is a desire for providers of legal, fast cash loans. It is probably impossible, however, what would happen if online payday loans were banned from operation? The grounds would be left for loan sharks to operate how they want. Now, nobody wants that no matter how much they hate cash advance loans.

Payday loans might be expensive. Nevertheless, not getting personal loans has its own costs as well and it could be a prolonged cost. Missing a payment will result in fines and credit rating deductions. If a person keeps missing his or her payments, he or she will have to pay sizable late fees. And the credit score will deteriorate to a level that he will not be able to have any possibility of getting a loan for a while. Considering the alternatives, the fees payday company charges for a loan may not be the real issue.

The real trouble with them is that their payment term is far too short to solve any real problem as opposed to delaying cash shortness for a couple of weeks. They may have their reasons for demanding the money from the first wage pay. All things considered, some of these companies promise not to carry out credit check on their applicants. That is a considerable risk on their part to take. Unfortunately, most of their customers are in serious cash problem and if the borrowed funds is taken back from their wages right away, they could not meet their commitments again. Here is the bigger problem starts. They keep extending their loan and paying the charges over and over. So they can not really come up with the money, because any spare money that they might accumulate goes to pay the fees. What’s the solution? What other alternatives are offered to people needing urgent cash to pay for an emergency or unexpected bills?

These day there are few companies available to bring competition to payday loans. They’re ready to lend cash money for more than 3 months. That is a good enough period for most people to solve their cash troubles.