Invent

Import Goods and Distribution


How Foreign Imports Improve Your Bottom Line

By Mark Alford

Of course, supporting our domestic economy and buying from local companies is preferable to allocating parts of our business operations overseas. However, the major benefits granted by certain aspects of foreign business affairs such as imports are often too great to ignore, especially for small-business owners and startup companies. Businesses can increase profits, grow faster and offer higher quality services and products by taking advantage of foreign imports. Among today’s top sources of imports are China, India, and Mexico. While the practice of trading and importing between these countries and our own isn’t new, it should be considered a brand-new endeavor for each business owner looking to set up imports for the first time. Yes, much of the groundwork has been laid out for you and you can start importing much quicker than what was once possible. However, there are still a number of important laws and regulations that must be obeyed to ensure a smooth process void of unnecessary penalties, fines, and other costly mistakes. Regardless of how well established the import operations are between different nations, the presence of international commerce equates to some very serious implications if necessary steps are mishandled or neglected.

Learning about just the fundamentals of getting started with the import process often proves to be a massive time-hog for small-business owners. And the amount of time spent on planning and execution necessary to ensure that all factors are accounted for is often enough to detract from other critical money making tasks. This is why growing numbers of startups and entrepreneurs are seeking out non-competing companies and fellow entrepreneurs with established import operations. Furthermore, incorporating import operations within your own system that have already been set up by another entrepreneur or business grants the massive benefit of an established relationship. This allows you to save a significant amount of time hunting for viable import sources. An extremely vital element of established relationships such as these is trustworthiness, which helps to ensure: all materials and services offered by the export company are completely legal and comply with international regulations; reliability of product delivery; consistency of order turnaround time; and dependable quality. Leveraging established relationships with import services also helps to protect your business against fly-by-night and financially unstable companies.

There are multiple ways to incorporate imports within your business model. What’s likely the most prevalent reason for using global imports is the access to significantly cheaper goods and materials. Businesses can choose to incorporate imports as part of their global supply chain sourcing or they can import finished products. Primarily, this grants businesses the ability to 1) maintain their existing product/service pricing and purchase greater quantities of goods to amass larger inventories and increase their sales potential or 2) purchase the same quantity of goods while raising their product/service rates to increase their profit margins. The best approach to be taken regarding these two primary options is typically determined by a business’ specific industry and the degree of its inherent product/service pricing flexibility as well as the level of competition. For example, a company selling basic notebook paper probably wouldn’t have much flexibility with the price at which they sold their product, so they would be better off taking advantage of import opportunities as a means of buying more materials for less money. And the less competition there is the greater the profit margin a business can exercise.

Other businesses use imports as a means of providing their customers with unique, rare, hard-to-find, and hard-to-get items. This grants business owners virtually exclusive access to niche markets and vertical markets and is therefore an excellent method of reducing one’s competition as well. Businesses can choose to import goods and materials to their own inventory facilities, rented warehouses or storage services, or directly to their customers via drop-ship (no handling of product).

Finally, for the fiercely patriotic business owners strongly against importing goods or services, it’s important to remember that few things are absolutely permanent in the business world. Many businesses have begun by making use of foreign imports when their capital was low and then switched back to domestic-only dealings when their positive cash flow reached sufficient levels. From this we can see that it helps to look at one’s business in segments or graduated goals, outlining top objectives with the specific steps necessary to reach each point.

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