Importing and exporting businesses can be relatively easy to run. On the end of imports, you don’t have to do much in your home country in order to turn a profit. On the export end, you’re maximizing the profits you generate on your goods.
Since China is such a popular country for these arrangements, a lot of people have questions about what it takes to make a business relationship based on imports and exports work.
Here are a few things you’ll want to think about when you’re looking into setting up your business.
1. UNDERSTAND THAT BUSINESS IS BUSINESS
Every country has their own rules for business etiquette. Some countries are less polite than others when it comes to business negotiations.
When you’re talking numbers with a Chinese company, you don’t need to be overtly polite. There will probably be a language barrier, but you don’t need to make up for that with formalities and special considerations. Cultural sensitivity isn’t a huge issue – treat them the same way you’d treat a company in your own country.
Appearing too soft or sensitive might harm your business relationship.
2. DECIDE EARLY HOW MUCH (OR HOW LITTLE) TO INVEST
A small scale importing business doesn’t require a lot of capital on your end. If you want to go big, consider how you’re going to fund the venture. Private investors (such as friends or family) may be easier to deal with, where bigger investors are going to require a thorough business plan and a lot of paperwork.
If you’re going to want (or need) to borrow someone else’s money to get started, remember that startups for Chinese based importing businesses are slightly lower. However, don’t assume the meager loan amount will allow you leeway to ask for money in a lazy way.
3. CONSIDER QUALITY CONTROL
Any global company will offer SGS inspection, which is exactly what you need to ascertain that the goods you are receiving are actually the goods that you paid for. Language barriers and budgetary restrictions can result in unusable imports, which is essentially throwing your money down the drain.
Make sure that the company you’re working with is providing the quality you agreed upon. The internet is full of people who misrepresent what they do, in China and every other country.
Quality control is your best protection.
4. WHAT ARE YOU GOING TO DO ABOUT CUSTOMS?
Both importers and exporters need to be well versed in the way that customs works. Duties are different for product classifications, and you need to understand exactly where you’ll fit in.
If you’re intimidated by the prospect of dealing with customs, you’ll need to hire a distributor or a clearing agent who is already experienced in dealing with the process. No matter which way you go, anticipate that dealing with customs is going to be a substantial and expensive part of your venture.
5. ALWAYS CONTINUE TO NETWORK
Don’t find a single business to work with and assume you’re doing the best you can. By continuing to network with other Chinese professionals, you’re likely to come across better opportunities.
A better factory or a better channel can make a world of difference in the success of your business, and even if you feel as though your existing relationships are going well, there’s always room for improvement.
Stay abreast with changes and innovations in your industry. The more research you do before you start, the better off you’ll be. In any international business dealings, it’s better to know too much than to know too little. Don’t rush the process – wait until you’re secure in your knowledge before you make any big moves.