As an entrepreneur, it is essential that you go over every aspect of your industry before you actually start full force. This is even more important when you are deciding to start or add on an importing/ exporting company. Because you are dealing with things like international trade regulations, different currency and many other factors, you should really do your homework. Below is a quick reference to the major points of what you need to do when going into business as an importer and/or exporter.
Just because something is popular here in the U.S doesn’t necessarily mean it is popular elsewhere. Deciding on the types of items you will be exporting out to other countries, or importing here in the U.S is very important. You don’t want to invest a bunch of money on something that no one wants. Do your research and decide if the product will sell in other countries, or if importing, see if it will sell here in the U.S.
Talk to vendors in the countries you are planning on exporting to. See if they believe they can sell your product. Make sure you get everything backed up by hard facts and statistics. The more people you talk to, the more likely you will find accurate information.
Rules and Regulations:
Taking the time to study the rules and regulations of the country/countries you are exporting into is a must. Because trade laws can change, it is a good idea to have on hand different resources that can help keep you the most up to date on every rule and regulation. The following organizations will help you stay current on all information:
- U.S Small Business Administration (sba.gov) –This agency has a wealth of information for all small business owners. You can find many publications for different state requirements on importing, as well as beginner guides for exporters.
- export.gov – This website can set you up with everything from online courses that can teach you the basics of trade which are hosted by the U.S Commercial Service, to webinars that keep you up to date on new trade information.
- Foreign Agriculture Service (fas.usda.gov) — If you are interested in importing or exporting food products, this site will be very helpful. It will keep you up to date on the basics of food importing/exporting, any permits you will have to obtain, and polices you will need to know.
- The Federation of International Trade Associations or FITA (fita.org) — Besides providing even more links that can be helpful for a future importer/exporter, this site provides market research, tools, software, as well as trade leads.
The Internet has made trading much easier than ever before. One reason for this is because with a quick click of your mouse you can set up trade with anyone across the world. There are many software programs out there to not only get yourself more organized, but also set up e-commerce between yourself and other traders across the globe.
A quick search on Google will bring you to thousands of different software options for importing and exporting. Some software programs are to help keep yourself organized in your warehouse, others will help with the transaction process itself. If e-commerce is something you are looking into the FITA has links to the following software programs that they feel will aid you in this endeavor:
- OpenEntry International E-Commerce
- Oracle E-Business Suite
- Perfect Commerce
When looking at software programs, remember to decide ahead of time what you need. If you don’t need a software program with all the “bells and whistles”, then don’t spend the extra money on something you will never use. Also look at reviews of the software programs, and see if you can get in contact with current users. Ask them how they like the program, and also what they dislike. Getting all the information is half the battle.
What NOT TO DO when Importing and Exporting:
It is easy to find the things you should do when starting your own business, regardless of the industry you are in, but knowing what not to do can also be beneficial. When dealing with international trade laws, it is important to know much of the legal do’s and don’ts. Knowing what not to do can save you from a possible infraction with another country’s government.
When exporting, don’t forget to inform every person you hire the rules and regulations that the U.S. has for handling a certain product. You can actually get charged with miss handling of your goods, if one of your employee’s miss handles your product, even if they are in another country. Making it extremely important to not only stay up to date on all possible violations, but also keeping all staff informed.
When importing, don’t forget to study your products Harmonized Tariff Schedule or HTS number. This number will determine the duty rate you will be charged when bringing a product in to the U.S. Although this number is meant to keep order and help countries know what products are coming in and out much easier, there is a little wiggle room for which your number can be. Talk to customs and figure out a number that will work for both of you at a cost that is the best for your business.
Don’t forget to study up on insurance rates for your products when exporting them. You need to factor in all risk factors and decide what type of insurance coverage will be most beneficial. You need to protect your business and your product. Many times people overlook all aspects of this process and it could be harmful to a small business.
Don’t forget to find the country of origin for the product you are importing into the U.S. Just because you are buying the product in China for example, doesn’t mean it was manufactured there. The U.S. as around 20 different definitions of origin, so don’t make the mistake of stating the wrong origin. Aspects such as duty costs and certificate of origin can be affected if wrong origin is reported.
Starting an importing and/or exporting business is an exciting new adventure. The number one thing to remember is to research everything. There are so many different factors, it is important you as a business owner are knowledgeable on all aspects of the trade and keep up to date on all industry news. Once you lay the groundwork, keeping up to date on the news will be much easier and less overwhelming than when first starting.
Shannon Suetos is a writer based in San Diego, California. She writes extensively for an online resource that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs such as phone systems & VoIP service at Resource Nation.
Category: Startup Advice