If you want to open up your potential profit market and live the life you’ve always dreamed of, then starting your own import export business may be the answer. However, most businesses fail within the first year and this field is no exception. There are many factors at play that lead to failure. Of the most common, all are bound by good old-fashioned laziness. Not having a business-savvy head on your shoulders will lead you down some pretty nasty paths and ensure the failure of your business. But which paths guarantee your derailment?
Committing to an untested product. Before you commit to things like price and inventory, you’d better make sure there’s a market you’re in for that product. If you export, you want to make sure that the destination area understands the product and, above all, that its over and under is financially favourable. Too many people get excited about the possibilities and venture into untested waters without any of the essential preparations.
Do not participate in respectable payment transactions. Online payment transactions, such as those supervised by PayPal, go a long way in protecting you from the dangers of fraud, but you’d better be prepared to forgo a significant portion of your earnings from transaction fees. If you are serious about running your business, it is much better to start and do the process through a financial institution through letters of credit. This ensures that the product purchased is the preferred product, and also ensures that payment is received and valid before final delivery can be made.
Refusing to research a potential business partner before working with them. Over-enthusiasm kills the small business owner every day. The Internet has made it easier to reach a global market, but don’t let that give you unrealistic ideals. Make sure you can verify the legitimacy of your partner before agreeing to transfer funds or products.
Not investigating the area where the export/import operation will be carried out. There may be no need for the product, no matter how good it is. There may also be risk factors at play, such as unusually high tariffs initiated by the government of that country, eating up or depleting their profit margins altogether.
Failure to comply with all government standards and regulations for the transfer of materials across borders and customs. It is not uncommon for materials to be seized and for your business to bear the brunt of the financial and legal ramifications. Please take this into account before agreeing to trade.
Fiscal failures. The fact that he is receiving money from abroad does not exempt him from internal taxes. Keep this in mind when determining a product and price, and avoid the unpleasant surprises that come with ignorance.