Friday, November 09, 2007

Import Export Business Question And Answer

It seems that in recent weeks and months, an increasing number
of people are looking into the import export business. Most likely
the fact the US dollar has dropped to historic lows against all other
world currencies is causing this increase in interest.

Here is an edited portion of an email request that reflects what
seems to be a common interest for those who are researching the
import export business:

Question: You have mentioned that for many items, NLR "No
License Required" is applicable on many shipments. My question
is, is a license required to be a trader of commodities such as
minerals or sugar/wheat or oils?

My "Edited" Answer: In regards to the import export
business, I am very blunt with people so please do not take
anything I say personally, but I think you are looking at the
wrong area for getting involved in import or export.

Selling in commodities is not something for beginners and if
you are serious about getting into this aspect of the business,
you should really try to partner with someone who is already
working in this field. Do so at a small salary in return for
their mentoring -- with that said, good luck on finding one.

The commodities markets are fairly sewn up with buyers
knowing who the sellers are and sellers knowing who the
buyers are. Because there is the sense of doing BIG
amounts or numbers, there is a misconception that one
can make a BIG hit $$ on their first deal. This opens
the door to many who are in the business of fraudulently
separating would be import export entrepreneurs from
their money.

Commodities are sold in large volumes but there are
very slim profit margins, so even if you were one of
the lucky few who ever succeeded at making a legitimate
deal, the profits would not be that great.

As I said earlier, the people in this particular business
usually know where every kernel of corn or wheat or
grain and drop of oil is located and that it is extremely
difficult to compete as a newcomer.

You apparently came upon the China trading program,
this is primarily for someone located in the USA and
involves contacting USA/Canadian manufacturers
about the founder's family connected Chinese
manufacturing capabilities.

The focus of our other import export business training
programs do not focus on commodities and basically
train a newcomer to this business that you are much
better working with small and mid-sized manufacturers.

Here is a our recommended resource for learning
how to start an import export business.

The only other resource that I recommend for a
beginner is a subscription to this Export Trade Leads
service.

One thing to understand before you make a decision
to proceed. It is going to take 3-6 months (in most
instances) or sometimes longer before you begin
seeing any money once you have a deal that comes
together.

One other factor that comes to mind after re-reading
your email - you are basically talking about working
as an export management company in the type of
goods and references to "licensing" etc..

Neither the publisher of the course we offer, nor I,
recommend you start out in this business by jumping
into that level of the business. Start out as an agent
or broker. You merely get paid for bringing the
buyer to the seller (after you have an agreement)
and getting paid a commission both now and for
any future sales made to the parties you bring
to the table.

Hope this has helped.

Regards,

Ron Coble
Business To Business Portal

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