Posted by: changholt | December 1, 2009

International Trade 1-2-3

International trade is more than just putting buyers and sellers together. It’s much more complex than one would guess.

Let’s look at a simple example.

If for example you have been to China several times, may have lived there before, and know the Chinese product(s), you can approach a retail buyer in the United States, in the city where you live or elsewhere, and offer to be his buyer, especially if he carries products from China. In this case the US-based retailer may hire you to place an order on a product he sells from China.

1. You will order the product in China,
2. put the shipment together,
3. pay for the product not with your money but with his money,
4. and ship the good to his store in the United States, with his store’s name as the consignee on the shipping documents.

For your services the US-base retailer-importer might pay you a commission.

The retailer will be the importer, he will pay not only for the goods but for the cost of preparation of the export documents, packing and actual international freight from country of origin, China, to destination, wherever may be his store or warehouse. Your commission may be a percentage of the total invoice value or a negotiated amount between the two of you. Under this scenario you are using other people’s money but your expertise. You can get started tomorrow. Obviously if you have never been to China you may not want to offer your services as import export agent of Chinese products.

From these two examples it is clear that you can work with other people’s money, not just your own, putting buyers and sellers together where commissions may be paid to you by either or both of the parties, the buyer as well as the seller and the method constitutes the easiest way to get started in import export business.

Unfortunately it can be more difficult than one might think. To understand a manufacturer you can’t just search on the web anymore… just too risky.

1. You need to visit the factory two to three times just to make sure the factory meets its minimum obligation.

2. In addition, you really need to help manage the entire supply chain so you add value to the aforementioned scenario.

3. Otherwise, the retailer will soon see your services as unnecessary. If you ever need help with international trade or supply chain management give us a call!


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