Trade has existed for centuries. The import and export of goods have been a major part of the human experience. Exports are produced in a country for sale in foreign markets. In contrast, imports are any commodity brought into that country from another nation. In a more contemporary context, we can now purchase almost anything from all over the globe.
The new millennium has seen a booming international trade market. As a result, many new businesses are venturing into the EXIM business without fully weighing the pros and cons of doing so. Instead, they end up with a negative experience that can leave them frustrated, discouraged, or even hopeless.
Through this blog, NimbusPost aims to guide budding new exporters and Importers through the process of setting up their imports-exports business. Following the steps in this guide, you should be ready to start your journey into the world of international trade.
A Step-by-Step Manual to Start an Import-Export Business
Analyze The Market’s Viability
Research and market your product in the most efficient way possible to ensure it lands in the appropriate market. The country should be one where your product is in great demand and sells well.
It is necessary to use a marketing strategy since competition is very high, and you cannot expect that you will have different buyers for every product. Therefore, it is important to understand who you are selling to and how these customers are attracted to your products to tap their needs, wants, and desires successfully.
Because of the many risks involved in importing and exporting goods, new exporters and importers should be aware of several factors before setting up their businesses. These are:
- Demand for the product
- Trade Barriers
- Political environment
Based on these variables, the new exporters and importers must analyze the viability of each market and choose the best market for their products.
Get a Business Pan Card
PAN stands for Permanent Account Number. If you are going to import and export goods, you need to get a PAN Card for your import-export business. The purpose of PAN card registration for a business is to keep track of an organization or business’s taxes and financial transactions. The Income Tax Department issues the PAN Card that acts as proof of authority in imports and exports. The process to obtain a PAN for the business entity is similar to getting a PAN for yourself.
Register Your Business
When starting an import and export business, you must register your business. This involves selecting a business name to represent your company in the marketplace. Of course, whatever business structure you choose depends on your company’s structure of ownership.
You can register your business under any of the following categories:
- Sole Proprietorship
- Limited Liability Company (LLP)
- Partnership firm
- Public Limited Company
- Private Limited Company
Get a Business Bank Account
A current account of your business is one of the main components of the import-export business. It is the bank account where your business’ funds are deposited, withdrawn, and paid. It might be used to pay staff and suppliers, access money in an emergency, buy equipment and supplies, take payments from customers, and more. The documentation necessary to create a current account depends on what kind of business you are setting up; if you have a corporation or limited liability company, for example, you will need different underwriting documentation than if you were creating a sole proprietorship or partnership.
Obtain an Import-Export Code (IEC)
The IEC code (10-digit code) is a significant business identification number issued by the DGFT (Director General of Foreign Trade) with lifetime validity. The Director General of Foreign Trade requires you to submit supporting documents accompanying an IEC code application form.
Any foreign trade company must obtain an Import-Export Code (IEC), as a person/entity cannot export or import without obtaining an IEC unless specifically exempted. Neither may participate in the DGFT export scheme without one.
Select the Product You Want to Export
Your business strategy should be based on the right product selection. However, international markets are complicated, and staying caught up in the right product or region is important. It would be best if you also considered trends in exports and regulations and the current state of international markets.
When you start exporting, it can be tempting to settle on a product immediately—it’s what everyone else is doing! But don’t rush into anything: learn more about your competitors’ products and their prices before making a decision. Then factor in demand and profit margins to determine if this is the right product choice for your import-export business.
Also Read: Best eCommerce Pricing Strategies
Identify Buyers For Your Products
Many business owners make the mistake of thinking that they can find customers first and the market will follow. But instead, you usually need to find distributors and clients who will take on your product and sell it to others.
You can do various things to generate potential buyers for your products, such as developing an eCommerce website, registering on buyer-seller websites, taking part in trade fairs and exhibitions, and so on.
Establish Your Financial Projections
Having access to some initial funding is essential for the success of any business. Depending on the type of import-export business you plan to run, you may need to raise money while creating your business plan.
It is crucial to begin by estimating the financial needs of your company. After that, you need to determine what financing for imports & exports will best fit your particular import-export venture. Short-term and long-term finance options can be accessed through government subsidy programs, as well as private loans and other options available in India.
Hire an eCommerce Shipping Company
You may have the best products in the world, but if you can’t get them to your customers, it doesn’t matter.
Logistics companies are responsible for transporting goods from one country to another. If you’re selling your products globally, you need a logistics company that can handle the task safely and efficiently.
There are many different ways to find a good shipping company: look at an aggregator like NimbusPost or check out a reputable shipping company.
Contact a Customs Clearing Officer
Getting started with import-export can be daunting, but it’s not impossible. To get your goods imported and sold in another country, it’s important to know how to navigate the customs process so you don’t run into any snags along the way.
The best thing you can do is contact a customs clearing officer who will help you get acquainted with all the different steps involved in importing and exporting—from getting stuff cleared at ports, transportation charges, customs duty charges, and other things involved with the import-export business.
Which business is best for import in India?
India’s Top 10 Imports are :
- Mineral fuels, including oil, Gems, precious metals
- Electrical machinery, equipment
- Machinery including computers
- Organic chemicals
- Plastics, plastic articles
- Animal/vegetable fats, oils, waxes
- Iron, steel
- Optical, technical, and medical apparatus
- Inorganic chemicals
How much does it cost to start an import-export business in India?
When starting your import-export business, there are a few documents that you are required to obtain at first. These include an IE Code, RCMC, and an Export Promotion Council Membership Certificate. These will cost you only a few thousand rupees.
After that, contact the right freight forwarder and customs clearing agent to ease the transportation of materials from one country to another. The complete process of setting up an import-export company involves around Rs. 65,000 to Rs. 1 Lac as an initial investment as well as for other expenses like buying required equipment and materials, hiring personnel, getting permits, etc.
Which export business is most profitable in India?
There are thousands of items one can export to generate profit in India. But first, you must find the right business idea matching your skills and interests. Here is a list of some of the best exports for entrepreneurs:
- Mineral Fuels
- Raw Ingredients
- Leather Products
The extent of business potential in the global market shouldn’t be underestimated. The world is shrinking, and a simple import-export business model can create wealth for anyone with vision, perseverance, and acumen.
You must have all the ingredients for an effective business plan. For example, it is important to make confident decisions about what products to sell, where to sell them, and how much inventory is needed. It’s also important to find a manufacturer or partner you can trust, a shipping company you can depend on, and a reliable distributor or reseller to market your product.
Trading internationally is a challenge, but you can always make a lot of money if you’re smart about it. NimbusPost helps make cross-border trading a hassle-free experience for exporters and importers, as well as individuals wishing to ship products to and from international locations. Leverage our extensive international shipping network across 196+ countries to deliver cargo and couriers in the shortest duration. Pick the cross-border solution you need today.