Have you ever thought, “Hey, wouldn’t it be great to start a business importing or exporting something?” For many years, I thought the same thing, until finally I got my chance. International trade can be one of the most exciting and rewarding fields that exist. The obvious reason that it remains elusive to so many is that such a business is complex and difficult to begin. There are so many things to overcome—different cultures, language barriers—and the added difficulty of finding trustworthy partners to work with overseas.
I import wine from South America through my company, Southern Wine Group, based in Bend and New York City. Through the company’s establishment and growth, I have learned some important lessons along the way.
Know your product. Select a product you have some experience with. If you choose a product you know nothing about, how do you know what are the critical points in its quality control? You should also realize that in terms of gaining good suppliers both inside the United States and internationally, your ability to demonstrate product knowledge is the easiest way to gain credibility during your initial meetings.
Manage your critical path. People have wasted tremendous amounts of money when an importer or exporter’s buyer is ready to buy but the goods are not ready to ship. To compensate and make up for lost time, many begin to pay rush charges for overnight shipping, rushed printing, etc. to get the goods ready for sale. Realize that careful planning and forcing yourself to allow extra time for the process of organizing an international sale will be always beneficial to you.
Understand shipping and logistics. Always negotiate your product shipping rates with at least three carriers. Also, begin to build relationships with these people. Time spent explaining your business and its prospects to a potential freight forwarder may get you a better rate than if you just discuss price right off the bat. Shipping lines have many big customers who started off small. You may be one of those. You should attempt to transmit this possibility to your audience.
Also, explore different ways to getting the goods to their final destination. Listen to suggestions and get quotes for alternatives. Only with full information can you make the intelligent choice.
Relationships are everything. The rest of the world doesn’t like to jump into business with just anyone. Take time to get to know the people you are proposing to work with. If it is a foreign supplier, fly over there and meet as many of them as possible. Also, make sure you have budgeted enough time to get to know your hosts thoroughly. Do not plan to discuss business right away. Instead, be well prepared and have ready all the items you wish to discuss. Let your hosts set the agenda and allow them to steer the initial conversations.
Choose your suppliers wisely. Last but not least, understand that those of us who buy goods from suppliers for resale depend on these people to sell us quality products. Our reputation is on the line, and it is we who must respond to our buyers if there is a complaint. Choosing great suppliers is not easy, but with a little homework—like checking local references and inspecting producing plants thoroughly—your chances will be improved. Finally, always attempt to buy with payment terms. Shipping the goods before you have paid for them creates a great incentive for your supplier to keep the quality high and the possibility for future complaints low. Best of luck!
Kirk Ermisch is a new business professor at Central Oregon Community College. He founded the first American winery in Argentina and brings a wealth of experience in international trade. Information: email@example.com.