Branching out into imports and exports can be extremely lucrative. However, it can also present numerous complications. Without adequate planning, research and preparation, you could end up losing money, breaking the law and in turn potentially even lose your business.
To avoid falling victim to the pitfalls of importing and exporting, below you’ll discover the most important things to consider.
You may have to spend money to make money
When importing manufactured goods, you’ll often find that suppliers want an upfront payment before they’re willing to ship your items. The customer may not pay until they receive their goods or they may require a certain amount of time to pay it off. Therefore, you’re going to need to have a good amount of short-term funding to bridge the gap between payments.
If you don’t have cash saved up, you’re going to need to have a line of credit open you can use to tide you over when needed.
Restrictions on exporting
One of the most important things you need to do before delving into the world of exports is to research the restrictions which may apply. Different countries have varying restrictions on the goods they will and won’t accept. So, if you’re thinking of exporting to China for example, you’ll need to be aware of the goods that are currently banned from being exported there.
You may also need an exporting license depending upon the type of goods you’re shipping. You can find out more about whether your business will require a license on the Gov.uk website.
Problems with shipping
Whether you’re importing or exporting, the main problems you’re likely to run into involve shipping. Delays, missing shipments and damaged items are a high risk. Customers these days want a shipping service they can rely on. When they order something, they expect it to arrive quickly and in perfect condition.
Obviously the longer the goods must travel, the more issues that can arise. Some shipping issues are to be expected, but you can limit the likelihood of experiencing frequent problems by choosing a well-known, reliable and respected international courier.
Lack of demand
As mentioned earlier, you’re going to have to research thoroughly before dealing with importing and exporting. Researching the market is particularly important to ensure there’s enough of a demand for the products you’re shipping. A great way to keep track of what’s being favoured in the investment markets right now is by keeping up with the Forex market. Services provided by the likes of FxPro, for example, provides up-to-date information on the leading trade markets.
Overall, it’s important to get as much information as possible before deciding whether importing and exporting is right for your business. If you take the time to research everything there is to know, you’ll avoid running into potentially costly problems.