UNIT 1 - (READING 1) How to start an international trade business

International trade is one of the hot industries of the new millennium. But it's not new. Think Marco Polo. Think the great caravans of the biblical age with their cargoes of silks and spices. Think even further back to prehistoric man trading shells and salt with distant tribes. Trade exists because one group or country has a supply of some commodity or merchandise that is in demand by another. And as the world becomes more and more technologically advanced, as we shift in subtle and not so subtle ways toward holistic modes of thoughts, international trade becomes more and more rewarding, both in terms of profit and personal satisfaction.

Trading goods and services allows small businesses around the world to compete on a global basis with their larger competitors.

In the past, it was very costly to acquire the commercial intelligence needed to play in the global market place.

Now, equipped with the internet we can access valuable market information and find foreign buyers and local suppliers, anywhere, anytime.

What type of import/export business can are there?

First off, let's take a look at the players. While you've got your importers and your exporters, there are many variations on the main theme:

• Export management company (EMC): An EMC handles export operations for a domestic company that wants to sell its product overseas but doesn't know how (and perhaps doesn't want to know how). The EMC does it all--hiring dealers, distributors and representatives; handling advertising, marketing and promotions; overseeing marking and packaging; arranging shipping; and sometimes arranging financing. In some cases, the EMC even takes title to the goods, in essence becoming its own distributor. EMCs usually specialize by product, foreign market or both, and--unless they've taken title--are paid by commission, salary or retainer plus commission.
  

• Export trading company (ETC): While an EMC has merchandise to sell and is using its energies to seek out buyers, an ETC focuses on the other side of the trading coin. It identifies what foreign buyers want to spend their money on and then hunts down domestic sources willing to export. An ETC sometimes takes title to the goods and sometimes works on a commission basis.
  

• Import/export merchant: This international entrepreneur is a sort of free agent. He has no specific client base, and he doesn't specialize in any one industry or line of products. Instead, he purchases goods directly from a domestic or foreign manufacturer and then packs, ships and resells the goods on his own. This means, of course, that unlike the EMC, he assumes all the risks (as well as all the profits).

In all of the above cases, should you be in need of assistance when exporting or importing, it is recommended that you enlist the services of a freight forwarder and/or customs broker. These people are familiar with the details of importing and exporting and can help you with such matters as clearing your goods through customs, documentation procedures, shipping, export restrictions and regulations, and foreign import regulations.

• Manage your business from start to finish
  
  Careful planning is fundamental to success.
  
  Successfully managing a business requires specific management skills in addition to knowledge of key business practices.
  
  
• Asses your leadership traits, decision-making skills, and how to manage your employees.

• Be ready to execute marketing basics, setting prices, filing your business taxes, legal considerations, forecasting for future growth, and financing options.

• Write your business plan, which is a guide to starting and running your business. This plan will encourage loans, promote growth, and provide a map for you to follow.
  
  It explains
  – who you are,
  – why you’re in business,
  – what you do, how you do it,
  – where you operate,
  – how you will generate profits,
  – who your customers are, and
  – why your business is important.

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