As the world becomes more and more technologically advanced, we shift in subtle and not so subtle ways toward one-world mode of thought. International trade becomes more and more rewarding, both in terms of profit and personal satisfaction.
International trade is one of the hot industries of the new millennium. Establishing an international trading business in the Philippines is a good idea for it allows you to take advantage of the most in-demand products from all over the world and earn above-average profit from it.
Setting up an import/export business can be quite simple and very profitable. Here are ways to make it happen:
- Learn the Types of the Export Business First
While you've got your importers and exporters, there are many variations on the main theme. There is the Export Management Company (EMC) who handles export operations for a domestic company that wants to sell its product overseas but doesn’t have the technical knowledge or doesn’t have the resources to conduct the operation in-house. There's also the Export Trading Company (ETC) who identifies the in-demand products in a foreign market and then hunts down domestic sources willing to export such products. Finally, there's the Import/export merchant. This international entrepreneur is a sort of free agent. They have no specific client base, and they don't specialize in any one industry or line of products.
- Find the Right Product
Every business needs consumers for its products and services. Finding the right product is a very important phase of a project. The proper market research can help boost your trading company into a true profit center, and the more research you do, the better prepared you are before you officially open your doors. When it comes to importing and exporting, you cannot be all things to all customers. You need to decide on something and stick with it.
- Then Find the Right Market
You’ve selected a product; now you must look for someplace to sell it! Any manufacturer, supplier, crafter, artisan, importer, exporter, or retailer is fair game. You can go after companies that deal in heavy construction equipment or delicate jewelry, gourmet goodies or pet food, telecommunications or toys. The only essential requirement is that they want to sell their merchandise or buy someone else's. You also need to check with local government officials to best determine sources for conducting market research.
- Know the Top Trading Partners
Now that you're familiar with the players, you'll need to take a swim in the trade channel, which means you need to know your top trading partners. For instance, in the Philippines, the top 5 countries of trade in order of largest import and export dollars to smallest are Japan, US, China, Hong Kong, Singapore. You don't necessarily have to secure trade deals with importers and exporters in these countries since there are other emerging markets in other countries within Europe and the Middle East. However, as a novice in the industry, you should familiarize yourself with the biggest trading partners and see what they have to offer.
- Make Your Business Legal - Set It Up
A comprehensive business plan is essential for every starting business. A business plan describes what you plan to do and how you plan to do it. After you developed it, you will need to register your new business with the Department of Trade and Industry if it’s a sole proprietorship, and to Securities and Exchange Commission (SEC) if it is a partnership or corporation. You will also need various types of licenses depending on the types of products you will be importing and/or exporting. Needless to say, you will also need to register with the city or the municipality where you intend to operate the business as well as with the Bureau of Internal Revenue (BIR). Making sure that the legalities of your business is airtight is of utmost importance.
- Create an Online Presence
Without a website or blog, you can't have a networked import/export business. Get yourself a platform that allows you to develop a presence online and grow your business. The goal is to balance the flow of communications, sell products online, and build your customer base to drive profits for your international business.
- Get a Supplier and Price the Product
Once you have a likely import or export product in mind, learn everything there is to know about it. Go to a manufacturer and suggest product improvements to turn a mediocre product into something slightly ahead of its time. The easiest access to reputable suppliers might be Alibaba, Global Sources, and Thomas Register. The business model for an import/export business is based on two critical elements within the international sales operation: volume or the number of units sold and commission on that volume. The goal is to price your product in such a way that your commission (markup on the product to customers) does not exceed what your customer is willing to pay and offers you a healthy profit. Hence, the more you sell, the more you make.
- Find Clients
A surprisingly small percentage of domestic producers exports their wares. Hence, your marketing goal is to convince the huge remainder that they can increase profits by exporting, with your guidance, to specific target countries. If you have done a good job with SEO on your website, customers will eventually find you. However, you should also definitely go hunting for customers. Trade organizations, embassies, and trade consulates, can offer contact lists specific to your industry and also suggest trade shows that are taking place locally and internationally that might help you connect with customers in a faster efficient manner. If you're desperate, you can always travel abroad on an import search mission than simply wait for foreign manufacturers to contact you.
- Transport Your Products
Your next step is to focus on logistics — transporting the product to where you will be selling it. At this point, you should have located a customer who loves your product, solidified the terms of the sale with them and established a means for getting paid. Now, you must move your product. You can hire a global freight forwarder who serves as an all-around transport agent for moving cargo, typically from a factory door to another warehouse. Based on information you provide, they take care of all shipping arrangements, which includes but is not limited to handling documentation, arranging insurance, if requested, and determining necessary licenses, permits, quotas, tariffs and restrictions (country regulations).
- Be Ready for This Industry
Unfortunately, not everybody is cut out to be an international trader. This is not a career for the organizationally challenged. If, on the other hand, you're an energetic salesperson, a natural at tracking things like invoices and shipping receipts, and you get excited seeing where new ideas and new products will take you and dealing with people from different cultures, then this is the career for you. Most of the traders we talked with were well-versed in the industry before launching their own businesses. Similarly, you can become an expert in International Trade by getting certified. Enroll now, and become a Certified International Trader. Click here
. We, at World Trade Center Metro Manila
, are always happy to help you succeed.