In continuation to our first installment which covered how to start and map out an import/export business, here we provide the sales and distribution aspects of establishing an import/export business.
• Price the product.
The business model for an import/export business is based on two critical elements within the international sales operation.
1. Volume (number of units sold).
2. 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. Typically, importers and exporters take a 10% to 15% markup over cost, which is the price a manufacturer charges you when you buy a product from them.
The more you sell, the more you make. Keep your product pricing separate from logistics because, at some point, you combine the two to determine a landed price per unit. A good transportation company can assist here. Don’t let this part intimidate you!
• Find customers.
Provided you have done a good job with search engine optimization on your blog or website, customers will find you. But don’t rely on it. You should also go hunting for customers! Check with local contacts, such as trade organizations, Chambers of Commerce, embassies and trade consulates. They generally have a good sense of who’s doing what in the international marketplace. They 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 and more efficient manner.
An excellent service on the exporting end is the U.S. Commercial Service (CS) Gold Key Matching Service. The U.S. CS can help you find potential overseas agents, customers, distributors, sales representatives and business partners.
At the same time, work your social media and networking platforms (your blog, Facebook, LinkedIn and Twitter) by posting information about your product or service and asking specific questions about your audience's needs. This gets the conversation going and keeps it going while making sure it's related to your business. The point is to keep your business on the minds of potential customers worldwide.
• Transport your products.
Your next step is to focus on logistics — transporting the product to where you will be selling it. By now, you 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.
Hire a global freight forwarder who serves as an all-round transport agent for moving cargo, typically from a factory door to another warehouse. Their service saves you a lot of time, effort and anxiety for a very reasonable fee. 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), which can be one of the most complicated aspects of importing/exporting for a newbie international trader.
You can find freight forwarders online under “transportation,” or check listings in trade magazines or other international handbooks. Pick two or three that seem like a good fit for your product or shipping destination.
Two well-known companies that are eager to work with brokers, consultants and small businesses are UPS and Fed Express. Either can also assist with getting paid, a critical part of the international sales process.
• Provide great global customer service!
The relationship between you and your overseas customer shouldn't end when a sale is made. If anything, it requires more of your attention.
Think of your after-sales follow-up on your import/export business as part of your product or service offering. The first step is to say, wholeheartedly — whether in person, via Skype, by email or telephone — "Thank you for your business!" For more on this, take a look at “How to Provide Great Global Customer Service”.Congratulations! You have officially learned the fundamentals on how to establish an import/export business. Now start booming and go make the world your business!